Kolachi Method 2 of Trading

kolachi · #1 (**permalink**) 03-21-2007, 05:30 AM

Name:This Method be called as "Kolachi Method 2"©
Method:Place wma5,ema21,ema100,ema200 on your chart based on median price.Place median fibo lines 72,116.5,188.5 around the axis.

Signals:When wma5 changes its slope beyond a median fibo line and returns for pull back, place entry.When wma5 changes slope beyond the median fibo line exit from trade.

Whipsaws:Unlike other crosses this method has very few possiblilites of whipsaws.The reason being the difference in the period of two MAs.Moreover our entry is not the cross itself but the change of slope of wma5.In case of whipsaw you will see the repulsion of wma5 from ema21 but you have already break even or locked few pips.
Comments:
1)Median fibo lines are average of two fibo numbers.
2)Axis of the system and median fibo lines is 200 ema.
3)This method is designed for 30M and 1H charts.
4)Use of any indicator is not necessary.
5)It works both in Trending and Ranging markets.
6)Strategy in ranging market is to place entry as per method and exit as per method.
7)In trending market,place entry as per method but exit on 100ema or 200 ema as per situation.
8)In trending market as soon as wma5 is repulsed by higher emas, place entry and exit as per method.
9)Highly trending market is recognized by steep slope of higher emas which are parallel to each other.
10)Ranging Market is recognized by frequent crosses of higher emas.
11)ema55 in not used in this Kolachi Method 2.
12)For volatile currencies 116.5 and 188.5 are mostly used.
13)For less volatile currencies 72,116.5 median fibo lines are used.
14)Proper Money Management and proper use of Kolachi Method 2 guarrantees success.

Legal Info:
1)I have used this system with live account and is very successful.I am not convincing anyone to use it.My intent is to share my knowledge and experience.Decisions in Trading are ones own responsibility.sometimes you need your discretion about deciding entry and exit.
2)Any use, copy, or reproduction must contain and mention the title of "Kolachi Method2"©.

kolachi · #2 (**permalink**) 03-21-2007, 05:32 AM

Down is the 1h chart of euro which shows medain lines of 72,116.5 and 188.5.You can see how well they contain the price reversal and slope of wma5.

kolachi

kolachi · #3 (**permalink**) 03-21-2007, 05:34 AM

Plz see the 1H chart of Eurodollar below.
You can see that wma5 breached the first meadian line while price touched the second median line.As soon as wma5 shows signs of slope change we can place entry.
Smart traders can place entry well above as top red candle has long wick and small body which shows price was unstable up and has been rejected from up.But entry on pressumption is never safe.
Kolachi Methods always emphasize entry after the slope change of wma5.

kolachi
N.B. Please note that Kolachi Method 2 is copyrigheted (2006) under law.

fxcruiser · #4 (**permalink**) 03-21-2007, 05:36 AM

hmmmmmm! the Kolachi Traders move to TSD. very interesting. Anyhow, welcome. I hope you find this a friendlier environment.

ENJOY!

fxcruiser

kolachi · #5 (**permalink**) 03-21-2007, 05:38 AM

Quote:

Rule#8 In trending market as soon as wma5 is repulsed by higher emas, place entry and exit as per method.

Explanation:
What does we mean exit as per method.
See the chart below of Eur/Jpy which is highly trending pair.
We can see that after touching axis at around 148.20 it went up and wma changed slope after repulsion at 148.35 and price shooted to second median line.
Entry was at repulsion of axis and exit is at change of slope beyond medain, that is at 149.60.
Again we see that at per rules of Kolachi Method 2, here lies another entry for pull back too.So enter and and exit as per your wish and psychology at ema100 or ema200.
Process continues till you are tired.

kolachi

kolachi · #6 (**permalink**) 03-21-2007, 05:42 AM

fxcruiser,
Thanks for the welcome.I hope we will have friendly and cooperative environment here.The reason for the move is that FF has deleted all three threads of Kolachi Methods which were available to traders for free of any cost.They had banned me under the allegation of spamming but i dont object that.However, destroying any free and valuable material because it contains name of Kolachi is not fair.

kind regards,

kolachi

Quote:

Originally Posted by fxcruiser

hmmmmmm! the Kolachi Traders move to TSD. very interesting. Anyhow, welcome. I hope you find this a friendlier environment.

ENJOY!

fxcruiser

kolachi · #7 (**permalink**) 03-21-2007, 05:46 AM

Title:Kolachi Dispersion©
The moving averages of price make certain visual patterns on charts of currecnecis and comodities.Recognizing these patterns makes the process of decision making easily and helps in trading.I would here try to elaborate certain such patterns.
Definition:
When price suddently changes direction with a swift move and the emas (exponential moving averages) and weighted moving average as mentioned in Kolachi Method make a pattern as shown in chart below.It is called Kolachi Dispersion.The gap between the emas increases with each emerging candle.
Use of Kolachi Dispersion:
As soon as we recognize this pattern, we place the entry as close to focal point as possible.The price contiues till the dispersion is complete and convegence starts taking place

kolachi · #8 (**permalink**) 03-21-2007, 05:47 AM

Here find another example of Kolachi Dispersion.
Gradually I will teach what is its best use but first you should try to familiarize yourself with it.

kolachi

kolachi · #9 (**permalink**) 03-21-2007, 05:49 AM

In Kolachi Dispersion, the focal point is is an imaginary point which is seldom present in its ideal position.Usually it is in the form of strectched focal point.The formation of focal point starts when wma5 ripps the ema21 and ends when it breaches axis.
In ideal focal point you will see wm5 breaching all emas in the proximity of an imaginary point, while in stretched focal point you can see that it takes little time to complete it.
The entry of Kolachi Methods( Kolachi Method 1 and 2 are collectively called Kolachi Methods) is preferabbly at change of slope of wma5.
But we know sometimes it is not possible to place entry at change of slope as no one is sitting infront of charts all the time.The entry at focal pint is for those who just entered the market when focal point is in formation stage.
Those who entered earlier at change of slope can relax when they see the focal point because they know a big move is under way and they just need to keep riding on it.

kolachi

kolachi · #10 (**permalink**) 03-21-2007, 05:53 AM

Quote:

Question:Kolachi, isn't your "dispersion point" most likely to be a news event, thereby suffering from the same trading problems inherent in any major news event (ie. slippage). Divergance of MAs is well recognised, for example in Guppy's.

Infact, Kolachi Method is designed to focuss on effects rather than on causes.I am not concerned what caused the market to behave like this.I am concerned with grabbing few pips from moving market.
Definitely news may be the cause of it, but Kolachi Method in interested in tapping this opportunity.

Regarding your question about slippage, I would say that it might affect the trades, but Kolachi trader will either place trade when wma5 turned slope so it wont affect him much as market will move enough pips for him to lock some profit.
If a Kolachi Trader places a deal after focal point is emerging or has emerged then he will save enough pips by following rules of Kolachi Methods for exit.
Problem is with a news trader who has no system and is shooting blindly in the hysteric market.
Lastly,I would compare Kolachi Method with Guppys by an example.
I have Honda Accord and my friend has Toyota Land cruiser.Both have four tyres.Both have one steering wheel and both run on the same roads.But still there is a huge difference between them if one understands.
Similarly, Guppys uses emas and Kolachi Methods also use emas.Both are for Trading on charts.But there is a great difference in analysis, entry, exit, and the periods of emas used.

I hope it answers your queries.
Thanks for your interest in Kolachi Methods.

kolachi