Advanced system #6 (Picking Tops and Bottoms)

Submitted by Edward Revy on July 15, 2007 - 07:29.

Were you told not to hunt for tops and bottoms when trading..?
Why not break the rules when you can tell with an astonishing precision where the next top or bottom will be?
Here is one very nice and accurate trading system that could make your Forex trading entirely about hitting the right spots.

Trading setup:
Time frames: 5, 15, 30 minutes, 1 hour, 3 hour and 1 day – just one chart at the time will be used.
In case you do not have the exact time frames, simply substitute them with the closest ones. For example, 15 min can be changed to 10 min, 3 hour can be changed to 4 hour etc.

Read entire post >>>

Submitted by Edward Revy on March 22, 2008 - 10:43.

That's right, if daily time frame has ADX above 30, we do not check further upon lower time frames, no matter what they suggest.

Now I understand your point. According to your comments we will be more confident entering upon ADX suggestion if it remained above 30 level some extended period of time. On 5 min chart this period is usually short.
Once we've checked all time frames from highest to the lowest and found no ADX above 30 except for 5 min chart, there is no considerable opportunities for us except to scalp Forex with 5 min frame. Therefore, you may easily exclude 5 min charts from your trading analysis if you prefer to and use only larger time frames for trading.

Please let me know if some aspects of your question are left uncovered.

Regards,
Edward

Submitted by muhammad b salleh on March 22, 2008 - 14:48.

hi,

ok now i am looking at gbp/jpy, adx now is :

daily - 46,
4 hr - 10,
1 hr - 12,
30 min - 21,
15 min - 31.

my understanding is : i stick to 15 min chart and monitor for sometime before it reverses. i will use this chart to enter trade. correct ?

i will not use daily chart coz it is already 46 and from my readings, 45 is already weakening trend and if it is 50 and above, stay aside. do not trade. correct ?

i will only trade, to be on the safe side, adx is between 30 to 35 ? for any time frame. in any situation, there will NOT be same adx point, say 32 for daily chart and 32 for 15 min chart. am i right ?

this one looks promising. will demo.

regards,

muhammad b salleh

Submitted by Edward Revy on March 22, 2008 - 19:53.

Hi Muhammad,

According to rules you have described, that when ADX is above 45 the trend will weaken and it is better to stay aside, your choice then is right - 15 min chart is the one you should stay with.
Your observation about ADX readings close to 45-50 levels is correct, however, it is not known if weakness of the trend will be temporary or not. Hence you would have to look for additional clues by performing further analysis of the market.

Regarding your last question about ADX readings on daily = 32 and ADX readings on 15 min charts = 32, it may happen, then we choose daily charts.

Regards,
Edward

Submitted by User on March 22, 2008 - 21:50.

better to use rsi gt 50 rather than adx

Submitted by Jimmypippy on May 23, 2008 - 11:23.

Hi Edward

Is the EMAs and ADX is set applied to close right?

Regards
Jimmypippy

Submitted by Edward Revy on May 23, 2008 - 14:49.

Yes, EMAs and ADX are applied to close.

Regards,
Edward

Submitted by User on August 8, 2008 - 06:17.

Hi again Edward.

Firstly i must say, i have read two of your posts, this tops and bottom and the trend line breakout. I absolutely love them both.

What i noticed today, trading the GBP/JPY, had i used the trend line strategy, i would of entered long to be stopped out then re-entered short for a profit. I applied ADX strategy and I noticed something very interesting.
I saw the ADX was trading above the 30 mark, and noticed the 20 and 40 EMAS trending down, hence did not want to long. Instead of looking for the most recent high, i went back some more, found two highs and drew a trendline. I then did not enter the break out for the long trade as it was trading just above the 20EMA, instead i looked to short trade at the longer trend line. The results were excellent.

What im trying to get at is, i am using the trendline breakout together with the ADX strategy and that works brilliantly. That alone will filter out the wrong direction trades, at least i hope so. I used the same strategies on others pairs to and all was successful.

I have one problem though, i am with fxcm, and use there market scope charts, nice to trade of charts, but i can only get the 1hour downwards time frames, and the daily. No 4hour chart or 3hour. I hope it will still work for me. I start at hourly time frames working down.

Thanks again for an excellent site, god bless!

Submitted by Edward Revy on August 10, 2008 - 06:41.

Thank you!
Your contribution and detailed insight are greatly appreciated!
I'm looking forward to testing it myself.

Happy trading,
Regards,
Edward