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Since trading and experimenting various different methods over the years, I thought it time to share some of my knowledge and as some would kindly say "pearls of wisdom".
I will focus on various topics for different levels of expertise, but one thing that time has taught me in this trading world is that keeping it simple is the best policy.
I have put together and will demonstrate a simple technique, using moving averages, CCI's and Pivot Points only.
We will focus on 3 timeframes, the 60m, 15m and 5m.
The instruments we will be looking at early on in the thread during the lesson will be 4 x Major currency pairs.
GBPUSD EURUSD USDCHF USDJPY.
Crude oil & Gold.
I will come onto the indices later along with other currency pairs.
So, what can you expect from me?
I will post toward the back end of the thread, after the lessons, a play of the day for the New York session.
The morning play of the day can be found on YouTube (NEW).
My template will be available to anyone who wants it too.
I would like to limit most of the questions to those regarding my strategy so as not confuse, and more importantly would love to build a school of novice traders into an school of Pip Demons.
Let's work together to build a team of like minded, fun loving individuals from around the globe who we can all have a bit of a laugh with whilst making money.
You only need 50 pips a day to make the big time at this game. Many bank traders are targeted 100 a week at the moment, and you will see in a very short space of time that 50 a day is very realistic with this strategy.
NOTE : THIS IS A STRATEGY, NOT A SYSTEM. IT IS NOT FOOL-PROOF AND CANNOT BE PROGRAMMED INTO AN E.A. IT REQUIRES HARD WORK AND DEDICATION AND WILL NOT BE EASY TO MASTER. BUT AS CONFUCIOUS SAID "EVERY JOURNEY START WITH SINGLE STEP"
Happy Pimpin'
F$X$P
Since beginning this thread I have added a standalone 4hr strategy you can find from page 32, a 4hr with 5m entry from page 42 and a 5m scalping strategy on page 44.
UPDATE 28/08/2008 You will need to read all this thread to get a grasp of how the moving averages work with one another and the different CCI setting and so on, but once you have completed it, there is hope. I have managed to squeeze all three strategies on to one pretty fine template.
Don't worry too much about the alterations throughout the thread. These were done purely for visualisation purposes. The final template will reveal all.
UPDATE 22nd November. From Monday 24th I will be posting a play of the day VIDEO each morning with the best set up using this strategy. I will endeavour to give concise analysis of the pair (20 to choose from), along with suggested entry/exit points for both short term and long-term traders. This video, outlining the pimpalicious play of the day will be available on youtube at 5am UK time, 6am CET, Midnight EST and evening for the Asian, Australian and west coast massive. Click here to go to the page and subscribe. Yes it's Free too. Oooooh Exciting
UPDATE 26th November.
Just to let you know guys and girls, just to vary and to prevent me from repeating myself I am going to reschedule postings.
UPDATE - MARCH 2009 - Due to the size of this thread now I am in the process of putting together a more concise intensive training course for novices. It will consist of just 12 lessons and will arm you with all the tools you need to succeed
You can find it here. Pimpology Lives On - Intensive Care for Newbies
UPDATE: April 2009. This thread will now be reactivated and will focus on longer-term trading.
Since I have the 4hr strategy and our friend Strato made such a fine job of covering the longer-term here, I will endeavour to continue with this along with Daily and Weekly chart set-ups.
Everything on the 60m/5m will be found here
If you want a word document that breaks this thread down then please feel free to email me.
__________________ I'm now sending trading notes out twice a day with videos too. Have a look HERE.
There's one set at 6:30 UK time for London and one at 12:00 for U.S session, plus I will send a summary video after each session
Now we all know how difficult it can be to cover 10 currency pairs, 4 indices and 2 commodities over 4 different timeframes, so what we will do in a while is just tile 6 charts.
Firstly allow me to explain why I look at Gold and Crude and how these two beasts will eventually make you a lot of money.
The 4 major currency pairs are USD related. GBPUSD EURUSD USDCHF USDJPY.
Gold and Crude are also Dollar related.
If America's economy is performing very well then the Dollar is strong, but as we have seen over the last few years, with a weak economy the Dollar is weak.
This gives rise to buying of commodiites such as Crude and Gold.
To term an analogy, which you'll come accross quite a bit over time reading this thread as it develops, let us for simplicity's sake see the whole financial market as a huge Football Club
Crude oil at the moment is the Chairman of the club, the ultimate decision maker, the boss of all bosses. He gives orders to the coach/manager, who is Gold, and this manager then screams instruction to the players, who are.........yes, you guessed it, the four major currency pairs.
As an example, is EURUSD going to rally strongly if Crude is falling heavily?
Well the simple answer to that is 'probably not'
Why? Both EURUSD and GBPUSD are Dollar suffix pairs. Euro before Dollar and Pound before Dollar. These 2 pairs will generally move in the same direction as Gold.
Remember, strong Gold = weak Dollar.
USDCHF & USDJPY are Dollar prefix pairs. Dollar before Swissie & Dollar before Yen. These will tend to move in the opposite direction of Gold.
So why isn't EURUSD going to move up if Crude is dumping.
In a nutshell if Crude is falling heavily like we've seen the last few days, then it's highly likely that the manager of our club, Gold will also be falling. This in turn will add weight to the strength of the Dollar overall and thus EURUSD would fall also. GBPUSD would probably also fall, whilst USDJPY & USDCHF would most likely go up.
Tile a daily chart for EURUSD and Gold horizontally and you will see what I mean (attached now)
Now tile a chart with USDCHF and Gold and you'll see that they are almost perfectly opposite.
So you can already begin to save some valuable pips by not going short on EURUSD & USDJPY at the same time as generally they travel in opposite directions.
There are times when EURUSD & USDJPY will seem to be moving in the same direction for a while. In these cases we look at EURJPY. Why?
Back to the football. If Man UTD can beat Liverpool and Liverpool can beat Real Madrid, then Manchester UTD should be able to beat Real Madrid......
The same is true for currencies. If Euro can beat Dollar (EURUSD bid) but Dollar can beat Yen (USDJPY bid) then Euro can surely beat Yen. This will see EURJPY move aggressively to the upside.
I'll talk more about these other correlations another time and to save confusion lets stick with the Majors for now.
UPDATE 28/10 The JPY has become really strong lately against all currencies, The correlation of this pair, and to a certain extent, the Gold and Crude, so although these are good indicators. They are not completely what this strategy is about.
UPDATE - The chairman has been fired. Crude is no longer the daddy of the firm, and the new boss is Dow Jones.
Euro and Cable are still following Gold to a certain extent but all the currencies are being pulled around now by Wall St.
If you play London hours then get wall street futures charts up, they are open 24hrs.
If you want to follow crude then do so but very limited amounts of people outside u.k have the capacity to do so and it could be outed.
__________________ I'm now sending trading notes out twice a day with videos too. Have a look HERE.
There's one set at 6:30 UK time for London and one at 12:00 for U.S session, plus I will send a summary video after each session
For the benefit of those not using Metaquote's excellent MT4 platform I will try to list the settings of the moving averages I use here.
Later I will add some charts.
As we are dealing with just 3 timeframes I use moving averages and CCI's from higher timeframes in order to see the bigger picture.
On my 60m Chart I will use a 20&50 moving average from my 4hrly chart to save me looking at my 4hr chart, on my 15m I have my 60m settings and so on.
Remember the keeping it simple !
Each of the 3 charts will have 6 moving averages and 2 CCI's
OK, so onto the 60m chart first.
(I'll put my colours in brackets so you can easily translate my charts)
I want a 20 exponential (faint pink) and a 50 simple (faint blue) moving average.
These are to be displayed on ALL timeframes.
I also want an 80 exponential (red) and a 200 simple (blue) These are my 4 hr m.a's and are to be displayed on the 60m chart AND 15m chart only. On the 15m chart these are my 60m averages.
I then want my daily m.a's, so it's an 80x6 (4hrx6=24hrs) 480 exponential in thicker red or crimson and a 1200 simple in thick blue.
These are to be displayed only on the 60m too.
Now I have my 60m/4hr/daily 20&50 m.a's on my 60m chart, 6 in total.
The 20&50 should also now be showing on the 15m and 5m also.
Also add a 21CCI to be visable ONLY on the 60m chart, and an 84CCI to be visable on both the 60m and 15m.
The 15m chart should come next and you should already have the standard 20&50 from before, along with the 80 & 200, which on the 15m chart are our 60m 20&50's
Now add a 320 exponential in thick dark red and a 800 in thick dark blue, visable only on the 15m chart and you have your 4hr 20&50 moving averages on your 15m chart.
The 200 doubles up as not only your 200sma but also the 50sma from the 60m chart, whereas the 800 doubles up as the 50sma from the 4hr as well as the 200sma from the hourly chart.
The CCI settings for the 15m chart are 84 (which you sould already have on there) and a 336. This is our 4hr 21 CCI (21x4x4=336....15mx4x4=4hrs)
So thats 2 timeframes, each with 20&50's from 3 timeframes (6 in total) along with 2 x CCI on each, yes?............Brilliant.
Under normal market conditions we would need just this set-up to get going, but with sentiment changing daily at present, with not one single currency looking especially strong we need to nip in and out of the market with 20,30,40,50 pips. It's pretty tough for everyone right now, but by introducing this little baby, we can get a bit of an advantage by using the 5m entry.
We should already have the standard 20&50 on here, now we need to add 4 more moving averages and two CCI's which are to be visable ONLY on the 5m chart.
We need a 60 exponential in red and a 150 simple in blue. these are our 15m 20&50.
We also want a 240 exponential in thick red and a 600 simple in thick blue, our 60m 20&50.
CCI's on here are a 7 and a 63. 63 being 3x21 (3x5m=15m), our 15m 21CCI.
Finally, we add the Pivot points indicator, which I will post next time.
So to re-cap. Each timeframe should have 6 moving averages and 2 CCI's
Save this template as 'Pimpology' and we're ready to move on to some analysis.
This might seem a little confusing at first but it will come, I promise. It's essential you set this up for yourself so you know what is what and become more familiar with what I am going to talk about later.
All you need to do now is open the 6 charts, Crude Oil, Gold, GBPUSD EURUSD USDCHF USDJPY and tile these.
Next we'll talk about analysis.
UPDATE: FOR VISUALISATION PURPOSES SOME OF THE SETTINGS HAVE BEEN CHANGED. THEY ARE ALL THE SAME AVERAGES AND 21CCI, BUT THE NUMBERS WILL BE DIFFERENT ON DIFFERENT CHARTS. PLEASE EMAIL ME FOR ALL UPDATES. thefxpimp@hotmail.com
__________________ I'm now sending trading notes out twice a day with videos too. Have a look HERE.
There's one set at 6:30 UK time for London and one at 12:00 for U.S session, plus I will send a summary video after each session
We now have the template saved and are ready to move along.
I have tiled the 6 charts in this order for easy reference.
Top - EURUSD GOLD USDCHF
Bottom - GBPUSD CRUDE USDJPY
Notice the 84 CCI on the Gold and the Crude, they are both down.
What does this tell us? We are looking at down trends in Gold & Crude which means a stronger Dollar.
With a stronger Dollar We are looking for Long positions on USDCHF and/or USDJPY. We are looking for short positions on EURUSD and/or GBPUSD.
Notice the 84 CCI's on GBPUSD & EURUSD are also down with Gold and Crude, whilst they are up on USDCHF & USDJPY.
That completes the set-up procedure. I attach the colour CCI and Pivot point indicator for you to add to your Pimpology template.
Don't forget to re-save the template once you have added both to one chart.
Ohhhhh, I almost forgot.
2 things. Firstly I don't use regular candlesticks, I use Heiken Ashi averaging candles (I have attached this thim bodied one which is nice. It's MTF so you'll need to change the timeframe to 0)
Secondly I use a lower timeframe 20ema too on each of the charts.
On the 60m its a 5, on the 15m it's a 7 and on the 5m its a 4.
60m 5ema = 15m 20
15m 7ema = 5m 20
5m 4ema = 1m 20.
These averages will run through the Heiken Ashi candles and we'll see later in the set-ups why I really like to use them.
OK, we now know IF crude is going up and Gold is following suit that we don't want to be shorting EURUSD or GBPUSD. We also know that if Crude is dumping and Gold following suit that we don't want to be shorting USDJPY or USDCHF.
What do we do when Gold and Crude are moving in OPPOSITE directions?
Well for me, I never know how much longer the anti correlation will last. If Crude is falling yet Gold is going up, do I really want to be long EURUSD?
Not really. This is the time when I sit on my hands and do nothing.
The Chairman of the Club will eventually always have his way with the Manager.
We're clear on correlation now then? ...........Good. lets move on to the Entries and Set-ups.
__________________ I'm now sending trading notes out twice a day with videos too. Have a look HERE.
There's one set at 6:30 UK time for London and one at 12:00 for U.S session, plus I will send a summary video after each session
Attachment 65388
Before we get going on entries it's been brought to my attention that many novice traders are having some problems with keeping up with all the charts that I cover and are finding it even more difficult actually following the trades.
It's all well & good when you have 3,4 or 5 screens, but as some of you are working from a single laptop I'm going to make a little suggestion that will pretty much ensure that you never miss another trade again.
Why do we miss trades? We're looking at something else.
Why were we looking at something else? Because we are looking at too much.
Why are we looking at too much? Because we don't want to miss a trade !!
The neverending circle of viciousnessnessnessnessness........ ..
Well most markets move at the same time so unless you have an unlimited account, the chances are you are going to take on one trade anyway. The problem is finding the best one.
How do you identify the best one?
You need to spend some months studying correlation and ascertain the strongest and weakest currency pair at any given moment.
This lesson is going to be a good foundation from which to begin your quest on the correlation highway and I hope it helps you make more successful trades and helps cut down on your mistakes.
Once you've mastered this you may want to look further afield, or you may wish to stick with this.
This is how it works.
Gold, as many of you know is one of the main driving forces at the moment of the FX pairs. It's a great representation of USD strength or weakness. Yes it's driven by the Chairman of the club, Crude, but if its falling heavily you probablr know WHY without looking at Crude.
So, by assessing in which direction USD pairs are likely to go, we follow Gold.
Gold goes up, USD is weak, Gold goes down, USD is strong. How am I doing?
Now a pair with USD as the prefix, or first three letters of the pair as already discussed - USDJPY, USDCHF etc move up with a strong Dollar and down with a weak Dollar, opposite to Gold.
A pair with USD as the suffix, or last 3 letters of the pair as discussed previously - GBPUSD EURUSD etc move up with a weak Dollar and down with a strong Dollar, the same as Gold.
Take a look yourself at a daily chart for EURUSD and Gold in a previous post. Now take a look at the same Gold daily chart with a USDCHF daily chart tiled horizontally. Almost indentially opposite.
So what we're aiming to do here is take one position at a time on either USDCHF or EURUSD. Easy.
The problem lies in identifying which is the best trade to take when Gold is strong. Is it EURUSD long or USDCHF short?
Introcducing ladies and gentlemenn, flown in tonight espcially, all the way from the Alps, the one and only........ EURCHF.
We can see which is strongest between the Euro and the Swssie by looking at this chart.
When its above ma's and moving up it's Euro that's the strongest. When it's below m.a's and moving down it's Swissie that's strongest.
As an example, let's assume we are looking at a weaker Dollar with Gold moving up. We know this means a weak Dollar and therefor we are looking EURUSD long OR USDCHF short
We also see the EURCHF chart down. This means the Euro is weaker than Swiss so we opt for USDCHF short as the Swiss is likely to be the better mover.
If we see the EURCHF chart moving up, we can safely say that Swiss is weaker so we'd opt for the long EURUSD.
Start by tiling 4 charts. EURCHF in the top left Gold in the bottom left.
EURUSD in the bottom right, USDCHF in the top right as in the attached picture.
Having established the direction of Gold and which is stronger or weaker of the Swiss or the Euro we are ready to look for possible plays.
It's nice and simple, and in this example. with Gold moving up and EURCHF moving down, we know that Swiss was stronger than Euro so USDCHF short was a better option than EURUSD long. It moved 200 pips from the cross of the 84 CCI, opposed to EURUSD's 160. Only 40 pips I hear you say !
Well if I could get an extra 20% or more out of a trade I most certainly wouldn't turn it down.
May this serve you well.
__________________ I'm now sending trading notes out twice a day with videos too. Have a look HERE.
There's one set at 6:30 UK time for London and one at 12:00 for U.S session, plus I will send a summary video after each session
Once we've established Dollar strength or weakness on our 60m charts we move on to our set-up & entry.
The beautiful thing about this strategy is that you only trade when the criteria are right for you, and as a safety precaution this particular entry is based on trading WITH the main 4hr trend (CCI 336 down)
Look for most of the the moving averages to stack up neatly in correct order.
The leading 7 (5m 20 green ema running through the candle) on this 15m chart is close to the pink 20 which is below the red 80 (medium red) which is below the 320 (thick red).
Or in English, the 5m 20 is below the 15m 20 which is below the 60m 20 which is below the 4hr 20.
Perfection doesn't come along every day but you can see that when it does it's a very powerful weapon indeed.
We sell after green Heiken Ashi on the 1st red when all other criteria are met.
The opposite is true for Longs.
Just these 3 trades on just ONE pair could have netted you 300 pips on the way down.
a word of caution though. the further your 80 moves from your 320 (last trade in particular) notice the 4hr (336) CCI. Both that and the 84 are crossing the -150 levels I use indicating oversold and possible reversal coming soon.
I'll go into more detail about this later.
Next we will look at getting in a bit quicker with our 5m chart.
12/09/2008 -PLEASE NOTE : the CCI in this Chart are 60m and 4hr with no signal. The new twmplate has a 15m and 60m CCI WITH a signal. Don't worry, just understand it. . I was only for convenience that it's since been changed. The results are still the same, maybe a bit better.
__________________ I'm now sending trading notes out twice a day with videos too. Have a look HERE.
There's one set at 6:30 UK time for London and one at 12:00 for U.S session, plus I will send a summary video after each session
Continuing from last time we now know about the correlation and the 15m entry, but what about scrounging a few extra valuable pips?
This is possible with a 5m entry.
We establish the longer trend from the 60m chart (far right), we ensure all m.a's are in correct order from the 15m chart (middle), then we look at the 5m for a closer look.
The 63CCi (15m 21) is up, all we need now is a retracement back to the m.a's, for them to support and then we enter.
This is where our 7CCI comes in very useful.
The 63CCI crossess from negative to positive, then the 7CCI recrosses to the negative -100 level. As that then powers back through the 0.0 line with the green Heiken Ashi we pull the trigger.
This particular move on Gold went 200 pips
Tomorrow we'll talk about exit strategies, but this should keep you going for now.
I'll be back later with some more on entries, both with the trend and against the trend.
UPDATE 12/9/08 Please note that the 10CCI signal you witness on the 5m chart here has been replaced by a 4CCI (1m 20) for more speed and accuracy.
Continure reading as before but Ignore numbers, just rememebr 4hr CCI or 15m CCI or Signal.
__________________ I'm now sending trading notes out twice a day with videos too. Have a look HERE.
There's one set at 6:30 UK time for London and one at 12:00 for U.S session, plus I will send a summary video after each session
The importance of Pivot Points.
We use these as support and resistance levels.
See how the 5m picture with just the purple pivot looked on yesterdays USDJPY.
We were only looking for long positions with Crude and Gold falling remember.
Now look at the second snap-shot with our moving averages.
The entry point on the second picture was later, granted, but with all m.a's stacked on top of one another and supporting price action there was still 50-60 pips available, and safer too
__________________ I'm now sending trading notes out twice a day with videos too. Have a look HERE.
There's one set at 6:30 UK time for London and one at 12:00 for U.S session, plus I will send a summary video after each session
A few people have asked me about my thoughts on correlation between USDJPY and the Dow Jones.
As mentioned in previous posts I consider Crude Oil to be the Chairman of the Club, with Gold the Manager who controls the players being the Major Currency pairs including USDJPY
I also like to visualise this 'Chairman' as having his sticky fingers in many a pie including the Stockmarkets.
See how the stronger Dollar on the back of weaker Crude gives impetus to the Dow Jones, who coincidentally is the CEO and driving force of the rest of the major Indices. Frankfurts XetraDax, Paris's CAC40, London's FTSE100, Tokyo's Nikkei225 and so on are all bossed about by the Dow, who I like to see driven by the opposing directiojn of Crude Oil at the moment.
Naturally this is not always the case and it won't last forever, but it's a very good benchmark to use right now as the snap-shot clearly demonstates.
__________________ I'm now sending trading notes out twice a day with videos too. Have a look HERE.
There's one set at 6:30 UK time for London and one at 12:00 for U.S session, plus I will send a summary video after each session
Linear Mode
