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4e8e0309-31ae-4fad-a18a-f316340fce4c

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Daily Forex Signal

Thu, Jan 8 2009, 20:21 GMT
by Jordan Lindsey

JCL Capital

[20:08:23] jordan: I am going over the guppy (gbp/jpy) entry w/ andreas and will talk in here so others can learn too
[20:08:26] bink: 15M USDCAD didn't even wait
[20:08:37] bink: absolutely
[20:08:40] jordan [»] andreas: i recommend opening a demo w/ Oanda
[20:08:46] bink: welcome aboard, andreas
[20:08:58] andreas [»] jordan: Thanks bro
[20:09:30] jordan: we just took a short entry off of the 4 hour time frame on the guppy; drop in entry
[20:09:54] jordan: now in order for a short drop in trade to occur we need to criteria to be met first.
[20:10:03] jordan: know what they are?
[20:10:36] andreas [»] jordan: not really
[20:11:26] andreas [»] jordan: like certain indicators
[20:11:51] andreas [»] jordan: want me to go there to that link now?
[20:13:17] jordan [»] andreas: yes, I am going to teach you this
[20:13:42] jordan: we need two things to happen in order for us to be able to take a short trade on the Conquer drop in.
[20:13:57] jordan: both are from the indicators we use (true trend & stoch)
[20:14:20] jordan: first the true trend must be negative (below the zero line)
[20:14:36] jordan: second the stoch must be ABOVE the 70 level.
[20:14:55] andreas [»] jordan: Its working now
[20:15:23] jordan: this creates a rubber band like effect (think rubber band being pulled apart waiting to snap back) as we have the stoch overbought (pulled back) against the trend which is down
[20:15:27] andreas [»] jordan: Does it always work like this when those parameters are met
[20:16:02] jordan: whenever these parameters are met we have our criteria for setup and begin entering orders
[20:16:34] jordan: (now this is for SELL trades only) when we buy the true trend must be positive & the stoch must be BELOW the 30 level).
[20:16:43] jordan: let me post a pic to help before I explain how we enter
[20:16:51] andreas [»] jordan: ok

[20:20:07] jordan: are you with me or do you have any questions?
[20:24:37] andreas [»] jordan: shOk for now
[20:24:45] andreas [»] jordan: ok
[20:25:28] andreas [»] jordan: when should I pull out of trade?
[20:25:39] jordan: now we look at the section: Once Criteria is Reached
[20:25:52] jordan: Sell: We place our limit order 1 pip below the low of the previous candle. If the trade does not trigger on the open of the new price bar we again adjust the order to the low of the previous candle minus 1 pip. Tip: The entry moves with each new candle until entry or the entry criteria is no longer met.
[20:26:23] jordan: so as you can see from the chart we placed our order (green line) where the low of the previous price bar was minus 1 pip
[20:26:34] jordan: that is the entry level, see?
[20:28:23] andreas [»] jordan: Isnt the trade in minus right now?
[20:29:14] andreas [»] jordan: Or shouldn't that be a concern?
[20:30:01] jordan [»] andreas: no, it is positive 15 pips. Yes, most importantly that is not a concern, understanding the trade is!
[20:30:09] jordan [»] andreas: very good
[20:30:46] andreas [»] jordan: should I come back in ?
[20:30:47] jordan: do you see two things? the criteria we need for a short drop in and where and how the entry takes place?
[20:31:10] jordan [»] andreas: no, forget about the trade right now and focus on learning how & why
[20:31:37] andreas [»] jordan: ha ha ok
[20:33:00] andreas [»] jordan: so you follow it manually or just put in parameters and wait?
[20:33:53] andreas [»] jordan: I see you have a system that seems to work quite well
[20:34:33] jordan [»] andreas: do you mean are these market or limit orders?
[20:34:59] andreas [»] jordan: yes
[20:35:44] jordan [»] andreas: indeed and it will get better. so let's work on getting you to achieve your goal, you need to start with me even though you are ready to run! this is all important
[20:36:10] jordan [»] andreas: do you see two things? the criteria we need for a short drop in and where and how the entry takes place?
20:38:01] andreas [»] jordan: I appreciate your instruction
[20:38:16] jordan [»] andreas: should I wait a bit before we go over the stop loss and target for this trade?
[20:38:39] jordan [»] andreas: or maybe just let you ask rather than me guide right now
[20:39:16] andreas [»] jordan: no go ahead please
[20:40:35] jordan: so we we see that first we need the true trend to be negative and for the stoch to be above the 70 level in order for us to have the criteria met for the short drop in entry.
[20:41:12] andreas [»] jordan: Do u normally place 1 trade a day?
[20:42:26] jordan [»] andreas: one spec order is placed a day. We trade 8 pairs on two different time frames (15min/4hour) so we can have up to several trades in a day.
[20:43:21] andreas [»] jordan: spec order? (special)
[20:43:45] jordan [»] andreas: speculative. each day I show the orders on the update.
[20:44:40] qjzheng: so the limit is around 137.8 since ATR is 2.21
[20:44:53] jordan: we wait to this point because it shows us we have a high percentage trade of price being (hopefully) temporally overbought (stoch above 70) in a down trend (true trend negative) creating a rubber band effect with price dropping back toward the trend (reversion to the mean).
[20:45:32] jordan: that is right. I used 110 (220 divided by 2 = 110).
[20:46:35] andreas [»] jordan: do we place trades on our own or together as a group as long as they meet the criteria I guess people don't mind sharing info
[20:47:14] andreas [»] jordan: I know i don't mind.
[20:47:50] jordan: sorry that is the stop qjzheng (half daily ATR) the target is the full ATR on the 4 hour drop in or 221 pips
[20:48:40] qjzheng: ok
[20:48:46] jordan: now we need to place the target & stop. The target is the full ATR (average true range - 14 period (daily time frame)
[20:49:24] jordan: and the stop is one of two things; the high of the previous move (the highest price point while the stoch was above the 70 level) or half the ATR. Which ever is less.
[20:49:44] jordan: in this current trade on the gbp/jpy it was the half ATR or 110 pips

Published on  Thu, Jan 8 2009, 20:37 GMT