Chronicle of a Death Foretold ?

Hi everyone,

In a couple of weeks I’m going to start trading with this system in a small live account. Before that I decided to post some trades for any comments, suggestions, etc. I will try to explain each trade in detail. Any constructive feedback is welcome !!!

(Sorry for any mistakes in my English (it’s not my 1st language)

General Rules:

1. Small consistent profits.
a. Less time in the market = less risk = small losses

2. A trend only changes because of its fundamentals
a. I don’t trade the news in the short term. I let economic reports tell me if the trend will continue or reverse in the medium an long term.

3. Short term trading demands a lot of concentration. Limited trades per day. If I reach my optimistic goal (10 pips) in 1 trade or two consecutive bad trades I stop.

4. Try to use a simple system avoiding fancy indicators.

“The Project”

I will start trading the 6EU7 (EUR FX Currencies Future) when the 6EH7 expires in two weeks.

Contracts: 1
Hours: 9:30 (GMT) till 22:00 (GMT) (Belgium time)
Time: 8 weeks
Goal: $2000 to $2500 Profit

Scenarios:
a. Pessimistic: -$500
b. Conservative: +5 Pips a day (+/- $2500 in 8 weeks)
c. Optimistic: +10 Pips a day (+/- $5000 in 8 weeks)

jjrvat

 

Technical:

1. Chart M10 for direction
a. SMA36
b. MACD (12,9,26) for divergences
c. Daily Pivots for S/R levels

2. Chart M2 for entry
a. Bollinger Bands (22)
b. RSI 7 for oversold or overbought

3. Chart M2 for exit (optional)
a. WMA 8
b. WMA 5

CDF System:
1. When price is below SMA 36 in the M10 I look for shorts
a. Entry point when price hit M2 BB (RSI overbought for additional confirmation) and pivot point.
b. Free Exit. I usually go for 3 - 8 pips or when the WMA 5 crosses back the WMA 8.

2. If M10 MACD divergence (usually confirmed with news)
a. Entry point when price break the BB and touch the closer pivot point.
b. Free exit I usually go for 5 pips or when the WMA 5 crosses back the WMA 8

3. Reverse for longs

4. Stop loss 6 pips in all cases.

 

To explain the system in detail I will use today chart to point exists and entry points. In the future I will try to call the trades live.

 

Today European Session:

Trade 1
1. 9:30 AM. Price Below 36 SMA? (yes) Short? (Yes)

2. 10:00 AM EUR German Services PMI (57.2) and EUR Services PMI (57.5) Both less than expected. Stronger dollar? (Yes) Short? Yes. Wait for entry setup.

3. 10:52. Price 131.48. Entry
M2 BB hit? (yes).
M2 RSI overbought? (yes)
Daily pivot hit? (yes).
Sell 1 contract

4. 11:02. Price hit 131.41. Exit
Buy 1 contract. 8 pips profit.


jjrvat

 

Or you could have waited for 5 wma to cross back 8wma at 11:14 (131.33 with 15 pips profit)

 

European Session:

Trade 2

1. 13:30. Price Below 36 SMA? (yes) Short? (Yes)

2. 13:34. Price 131.11. Entry

M2 BB hit? (yes).
M2 RSI overbought? (yes)
Daily pivot hit? (Yes**) Below S3
Sell 1 contract

4. 13:44. Price 131.03 Exit
Buy 1 contract. 8 pips profit.


jjrvat

 

Or you could have waited for 5 wma to cross back 8wma at 13:58 (130.95 with 16 pips profit)

 

Today US Session:

1. 14:30. Price Below 36 SMA? (yes) Long? (Yes). MACD divergence.

2. Wait for news to confirm continuation or reversal

3. 16:00. ISM Non-Manufacturing Index (54.3) and ISM Non-Manufacturing Prices (53.8). Both less than expected. Stronger Euro? (Yes) Long? Yes. Wait for entry setup.

3. 16:54. Price 131.09. Entry
M2 BB hit? (yes).
M2 RSI oversold? (yes)
Daily pivot hit? (yes*).
Buy 1 contract

4. 17:04. Price hit 131.17. Exit
Sell 1 contract. 8 pips profit

 

Exact Entry M2 Trade 3

 

M2. 5 WMA cross back 8 wma at 17:16 at 131.17 also 8 pips profit