Advanced system #3 (Neat entry: RSI + Full Stochastic)

Hello,

Thanks for this one Edward it does look very profitable! I'm not sure I have fully got it working however. There seems to be very few opportunities that this gives a buy/sell signal, is that right? I am looking at 8 currency pairs (usual suspects) and over the last 2 days have had no entry signals. Is this normal? I am using a daily chart so think I have understood the set up right. Hopefully someone can shed some light on this thanks. Should I be looking to enter at day end or any time?

Daniel

This is a great thread Edward. Thank you.
On previous pages Heiken Ashi was mentioned as confirmation of trend. I note that both smoothed Heiken Ashi and Gann HiLo activator give almost same signals. The Gann one is easier to use.
Live long and profit!!

Hi Mani,

I use midnight to midnight EST pivots.

Regards,
Edward

Dear Mr. Edward,

Thanks for your answer.

One more question,

You suggested to use Pivot Points, to calculate the same
any particular time (eg. EST 17) we should follow ?

Thanks in advance.

Best Regards,
Mani.

Hi Indrek,

As per strategy rules, once all signals are present, we enter the next day. Of course instead of going in blindly it is suggested to try to find the best entry point. I like to see the momentum going in my favor (using Stoch indicator on hourly charts), I also look at 9 EMA (see 9 EMA trading method #1) to time my entries. Anything like Pivot or Fibonacci, if you are able to interpret them, can suggest possible levels for market retracements, where we can place our orders.

Regarding distant stops, it is unfortunately the part of trading. To keep your position open on daily charts, your stops in many cases will be hundreds of pips away. You can try to place stops based on daily range average or any other numbers. Whatever your stop or trailing stop will be it should answer the following question: "At which point you'll assume that you've entered a wrong trade/the market is really going to reverse?" This is the point, where you should place your stop.

Best regards,
Edward

Thank you, Edward,
Still some more questions:
1. When it is time to enter, do you open your position authomatically at the start of next day or you try to catch the best moment for entry during the day using other indicators?
2. About setting stop losses... While trading the daily charts the last swing high/low is sometimes awfully far away for me (150, 200, maybe even 300 pips). How could I find the best stop loss in situations like these? Calculating on the basis of average daily range, maybe? Do you happen to have any formula or suggestion about that?
Indrek

Hi Indrek,

"Shortly after" in this case means within 2-3, maximum 5 days.
Since this is going to be a pullback against the main trend, it should not take long for the market to rebound and continue its course, which means that RSI and Stoch would briefly visit oversold/bought areas and quickly move out.

Regards,
Edward

Hello Edward,
I read all the posts under this topic but did not find answer to one important (to my mind) question. - In the general rules it is said that:
"when the price is below 150 SMA wait for the RSI to go above 80. Then if shortly after you see a Stochastic lines crossover above 70 - enter Short."
How should we interpret the words "shortly after" if we use only daily charts? Does it mean next day or within next 2-3 days or what? For me, "shortly" usually means in 10-15 minutes but here it seems to be something different :)
Regards,
Indrek

Hi Mani,

Thank you for asking.
New Year celebration went so well with traders contributing their strategies, that I decided to wait with my methods and keep it simple, dropping out the promotion point.
One of the systems or rather a method you can find here: 9 EMA Entry. I like it a lot and use it a lot.
The other one, again I called it a system before, but it is rather a method, is still waiting to be published. All this time I was looking to improve the second method, to be able to finally call it a system, but it still refuses to become one :)
It appeared it needs more work before it can be published.

Best regards,
Edward

Dear Mr. Edward,

First of all thanks for your excellent site.

On Dec 13th you had mentioned that

"Should I give away a secret..?
There is a small exciting promotion coming in about 10 days time. I will be sharing 2 of my trading systems here... Well, shall we wait and see what my Team is preparing for this New Year holidays?"

Any Update ? Thanks in advance.

Regards,
Mani.

Hi Salem,

I'm not sure, what SMA to suggest, since I haven't traded this strategy on hourly charts.
You can probably try 100 SMA or 80 SMA.

Regards,
Edward

Hi Edward,

Thanks for your reply. What would you suggest an SMA value for one hour time frame chart?

Regards,
Salem

Hi Andy,

The requirement for RSI is to register in oversold zone, e.g. just to get there, after this event we "set a checkpoint on our list" that RSI has reached an oversold zone, at which point we forget about RSI and move on to the next checkpoint - we wait till Stochastic lines cross.
I hope this answers your question. If I missed something, please let me know.

Regards,
Edward

Hi Edward,
regarding your comments made on April 30th re the RSI and Stochastic timings, I looked at the link you provided and fully understand and agree with your observations. However, I would still beg to differ that the four trades highlighted on the very first page of this thread would have been valid signals as, in my opinion, in all except the first case the RSI has moved out of the relevant zone before the stochastic crossover occurs. Am I missing something here or am I being too critical of the timing of these two events. It could be that I am misreading the chart on the first page but I don't think so. What do you think??
thanks
Andy

Hi Salem,

Of course, if you expect an entry on daily chart at certain level, it would be very beneficial to explore hourly charts to see what support/resistance levels and patterns are emerging there.
At that point use whichever profit/stop levels seem reasonable for you.

Happy trading!

Edward