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Trading method #3 (Trend Backstabbing system)

Submitted by Deo

Hi Edward.
Since lots of people are also entered in position against trend which might earn some good trades, I would like to take you thru one system, just opposite of your system with some addition and modification.
If it make sense please let me know.

Name: Friend (Trend) Backstabbing system .
Requirement:
Down Trend (Price below SMA 150) for long entry.( Less better success than shorts in up trend)
Up Trend (Price above SMA 150) for Short entry.(better success for shorts in up trend)

Objective: Quick Profit taking with tight stop loss by trading anti trend.

Target:
1. Mid way of Bollinger band
2. Upper Bollinger band

Do exactly opposite for going short in up trend.

Setup.
4H chart
ADX (14,1) had made recent mountain of hight of at least 45 and just started down hill.
RSI(3) had touched and recovered from line at 10.
Stoch(6,3,3) had crossed below 20.
Price had just departed from lower Bollinger band.
Upper bollinger band is at least 300 pip away
Stop loss 100 pip.

Regards,
Deo


As I've promised, I've highlighted the system on a separate page, so that we could gather more opinions from traders.
As for me, I find it interesting and in theory it should even do some nice trades, but it contradicts my trading personality, as I'm not as aggressive as this system requires traders to be.
Even then, thank you for the fresh idea, such things help us to think in a new way and see the opportunities which we never considered before.
(For example, this method can be easily used for exits when trading with the trend).

Kind regards,
Edward

For which pair this trading strategy ? Regards: Manus168

Mostly EUR USD.
Not tested others.
Reg.
Deo.

using settings of 14 3 3 with stochastics is much smoother,,the rest of this system/method seems like crossing your fingers and praying, the RSI i find has no use atall'

i'm going to try to keep this simple yet explain what was taught to me and what i do to "trade" with high probability and not be guessing.

Use Bill Williams "fractals" ,good for locating the channels on a longer time frame (1hr) and then adding your trend lines or "wedges" within that channel in the 5 minute and 1 minute, combine this along with his Gator Oscilator (the second set of settings should be all set to -1, not to the default setting 0 and the indicator then lines up perfectly with price action on all time frames,..)

just one rule : never open a trade unless you are within 5 pips of a channel line or trendline , try to let it bounce or touch first,,and use the stochastics for over bought /over sold signals. this will save you any major losses becasue you can use very tight stops (12-15)

i only anticipate and trade break outs of the channel "Long" because of the pair i trade which is in a long term up trend
my EMA's (NOT SMA's)are 20 50 and 200

i also use the CCI,so i have 3 indicators below the MT4 chart and on the chart are the fractals with channels and trend line/wedges and sometimes mini channels., and the moving averages.

Keep the same chart running from day to day, throughout the trading day as you add more trend lines on your chart as the market moves you can also delete older trend lines that are no longer in play, but keep the channels up until you are sure they are no loner usefull somewhere in the prices future ...

if you want me to post my chart from today let me know and i will so you can see what it looks like. I trade only one pair Aud/Usd.
As far as the CCI, stochastics and the Gator indicators look them up on the web and read up and learn how to use them before you decide they dont work, they do! the fractals alone will help your trading, connect at least 3 fractals to establish a line. they are really accurate once you start getting the hang of using them. I use dark blue for the channels and an orange for the trendlines /and or wedges within that channel, that works well if your candle sticks are green and red.

A chart would be great!

Thomas

what happend to your chart with the system you said you gonne put on ?

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