Forex Profit Monster - 4H TF

[Ingot54]

Calling all Profit Monster Enthusiasts

Hey Ingot54 !

I'll have a look through this thread when i get time and see if I can add anything constructively to the party......I have bought a few systems in the past as part of my trading education and find I outgrow them fairly quickly (boredom?) albeit some still deliver more profits probably than I ever will due to my Human frailities !

Neil

HI Neil and other interested contributors.

I intend to get back to developing the FPM thread here as time permits.

Just now there is an alert to SELL the USDJPY on the 4H chart.
It is just an ALERT not a TRIGGER so do not go jumping in until the method gives us the appropriate message.

Dropping down to the 1H TF the SELL alert was given about 5 hours ago, but the TRIGGER to sell happend one hour ago at 91.02.

Currently it is at 90.94 and looking OK. But the pair is ranging sideways, and I do not expect this to trigger on the 4H TF without a significant breakout in the next 8 hours.

Will be watching.

I have modified my charts slightly to suit my eyes, and I have deleted features that assist with trade management, so this is NOT a recommendation of the FPM trading method - it is just a heads-up to have a look at what the system can do.

I have also deleted info for the purposes of the screen shot, because it was cluttering the areas of interest when I shrank the chart for the screen shot.

As tme goes by I WILL be using the full money management setup.
Just for now ... hope some interest remains out there.

Cheers

Ivan

 

[Ingot54]

Gbpcad

I intend to get back to developing the FPM thread here as time permits.

It is just an ALERT not a TRIGGER so do not go jumping in until the method gives us the appropriate message.

Will be watching.

I have modified my charts slightly to suit my eyes, and I have deleted features that assist with trade management, so this is NOT a recommendation of the FPM trading method - it is just a heads-up to have a look at what the system can do.

Similar setup on the GBPCAD - there was a buy ALERT 4 days ago, which was TRIGGERED today. No one has made or lost anything on this trade, because the doji is a spinning top - the open 8 hrs ago at 1.7666 is the same as the current close - 1.7666.

Another reason not to get excited by possible missed opportunity, is the fact that the ALERT was in a counter-trend direction. Although the trend of the past couple of weeks has been UP for the GBPCAD, the long term trend is DOWN.

Given that this is close to the end of the week, I wouldn't bother trying to chase a trade in this pair. Next week may be different though.

Cheers

Ivan

 

[gangsta1]

I took that UJ and got stopped out.. Likewise with the GBP/JPY, twice this week!

 

[Ingot54]

Know thy trades!

I took that UJ and got stopped out.. Likewise with the GBP/JPY, twice this week!

Hi Gangsta1

If you were trading this - and I did not encourage anyone to take these trades - the attached 1H shows you should have remained in the trade with a SL of more than 30.5 pips. I have said I do not trade the 1H, though I do frequently refer to it on this thread, and in practice, because it is an alert concening the higher TF.

We could have gone short USDJPY (1H chart) on the tall green candle at 90.987. The trade rallied against us to 91.292, before dropping to the support at 90.237 where we could/should have taken profits of 75 pips. Had we remained in that trade, we would still be enjoying a profit of 91 pips. But the trade can still run against us on 1H - trend is down - but "noise" can be a robber.

I encourage you to read the entire thread, or ask questions before trading live at all. I am still not trading this live myself, for personal time-management reasons.

However, when we look at the 4H chart of UJ, we would not/should not have entered until the close of that long red 4H candle that closed at 89.996. That was the "significant breakout" I was referring to in my previous post in response to NVP - post #41.

Had we entered at the open of the next 4H candle, (89.991) we would be showing a small loss of 8.6 pips. But to be truthful, the 4H trade has not been triggered yet, and we have to wait until the FMP Slow Trend turns RED. So far it is borderline ... but has NOT technically triggered, so we stay OUT!

And on the DAILY chart we are still quite a way from an entry, though this can change in a day or two. I am showing the 4H and Daily charts as well, to give some perspective to the state of the UJ right now.

I didn't discuss the GBPJPY so cannot comment on what may have happened there, except to say they are closely correlated, and I would only trade one of these pairs, not both. To do so is doubling risk due to the correlation.

In my next post I will have a look at the GBPCAD.

 

[Ingot54]

Gbpcad

I took that UJ and got stopped out.. Likewise with the GBP/JPY, twice this week!

Gangsta1 -
I meant to ask - are you running the FPM yourself, or did you just look at the post above and decide to take the trade anyway?

Concerning the GBPCAD:

There are current legitimate trades running in the 1H and 4h TF, but no entry available from FPM at this time, to get into those. The 1H trade is losing 16 pips and the 4H is ahead by about 1000 pips. However to be fair, the 4H trade suffered a drawdown of about 440 pips after the 21/10/09. I think the rules called for a close before that, because of the upper resistance being touched. In this case, we could have claimed the method made around 640 pips on that 4H, stopping out at the peak on that day.

Will need to check - but at this point it is not what we are about. I acknowledge we need to be very astute with trade management, and will need to know this stuff.

Re the DAILY:

There is an indisputable LONG entry triggered at the close of the last daily candle, signalling an entry is due at the open on Monday. In order to get this entry right, I suggest you check the 1 H and 4H charts. These sometimes show pullbacks that save us many pips at entry - limiting drawdown and risk.

Again - this is NOT a trade recommendation - just a heads-up for the method.

This is learning ... not trading ... unless you are following along on demo of course.

Footnote: A lot of people object to the large drawdowns in the higher TF. That is normal to be wary of. That's why the method needs to be followed with precision, and unwaveringly. Entry timing is very important - many candles retrace a significant part of the previous candle before moving ahead, and for this reason we look to the lower TF to limit the extent of the drawdown.

Be patient - I am sure there is a lot to be learned here.

 

[coolpixel1]

Glad to see you re-activating the thread and great to see you back! Just to strengthen what you wrote above - Jim in his book accompanying the Forex Profit Monster system, does state the probability of a drawdown at entry - the point he was making about a qualified entry was that the stop loss being so big would absorb a drawdown (money management again key here) but many times the trades reverse and go the right way - many times also, there is no way of knowing that there will be a pullback, and potential pips could be lost. And a very valid point Ivan regarding the correlation: Jim does in fact give tables demonstrating the correlation between pairs (obviously the higher you go the more reliable they are!) and in fact suggests treating trade signals which have strong correlation (e.g. USD/JPY GBP/JPY) by splitting your stake 50/50 between the two to reduce the risk... or omitting the trade altogether!
This is a great strategy and even though I've not had time over the last 2 months to involve myself in Forex I am getting back into it - so extremely glad to see this thread re-appear. Good luck all and very best wishes Ivan

 

[gangsta1]

Ingot,

The trades I lost on the UJ are the two previous to the one you show. I use the 4hr chart and there were two entries last week (before the potential entry at the mo) and they both got stopped out.

 

[NVP]

Hey Ivan........

looks like the train is rolling again and fans will gradually return to the thread

Quality threads are few and far between on T2W so glad to see it back !

N

 

[coolpixel1]

Jim has just posted profits for October at 1047 pips. Also, as pairs vary and this was mentioned (correlation) I quote from his blog which, by the way, is worth reading:

"You also have to learn that different currency pairs have different volatility and you can't trade the same lot size on every pair. This is a key principle in proper money management and until you implement it you will never be consistently profitable if trading pairs with different volatilities."

And something about the systems out there which, sadly fall into the scam pile:

"Forex scammers will try to appeal to your greed by telling you how much money you'll make when you trade their system. They'll cherry pick a good trade that gained a couple of hundred pips and tell you that you "could've made $2,000!!!". What they don't tell you is that you'd have to trade a standard contract and that this is crazy (not to mention pretty much impossible) for a new retail trader to do. If I wanted to operate this way I'd be posting dollar results based on some unrealistic value for most people. Instead of posting a 1,047 pip gain for October I'd tout "FPM generates over $52,000 in profits for the month of October!!!"

Anyone reading his blog on a regular basis would have already have read what I've pasted here - this is for total newcomers to the systems but also returning to a couple of very valid points. This system can, and will produce losing trades. If the profits don't surpass the losses, then it's me that's at fault, not FPM!! Have a good day everyone

 

[forexsniper]

HI Neil and other interested contributors.

I intend to get back to developing the FPM thread here as time permits.

Just now there is an alert to SELL the USDJPY on the 4H chart.
It is just an ALERT not a TRIGGER so do not go jumping in until the method gives us the appropriate message.

Dropping down to the 1H TF the SELL alert was given about 5 hours ago, but the TRIGGER to sell happend one hour ago at 91.02.

Currently it is at 90.94 and looking OK. But the pair is ranging sideways, and I do not expect this to trigger on the 4H TF without a significant breakout in the next 8 hours.

Will be watching.

I have modified my charts slightly to suit my eyes, and I have deleted features that assist with trade management, so this is NOT a recommendation of the FPM trading method - it is just a heads-up to have a look at what the system can do.

I have also deleted info for the purposes of the screen shot, because it was cluttering the areas of interest when I shrank the chart for the screen shot.

As tme goes by I WILL be using the full money management setup.
Just for now ... hope some interest remains out there.

Cheers

Ivan

Ivan - I'm in, for sharing experiences with FPM. And thanks for re-starting the thread again.

I started very recently with FPM...after chasing the holy grail for about 6 months - and finding it doesn't exist. From Jim's blog, FPM might just well be the holy grail, but I will need to learn to be patient and follow the rules exactly first.

I'm trading just 4 pairs initially. Want to master the system (and my emotions) before I commit to doing much more. The 4 pairs I'm looking at:

• GBPUSD
• GBPJPY
• EURUSD
• USDJPY

I'm sticking to the 4H time frame, as I know I cannot sustain the 1H time frame with my family commitments, etc. I am looking at mastering one thing and just keep repeating it to make my long terms profits. I am fine to grow my account slowly...but surely.

And I want to stick to the system. No deviations. I don't need maximum pips...I just need to be positive at the end of the month (for most months anyway).

I'm currently in the short for GBPJPY and it looks like its going side ways at present. Who knows where this will end up...but I'm fine either way. Need to stick to the system...so I'm not going to second guess this thing. I'll let you know how this trade pans out.

 

[forexsniper]

i just exited the short on GBPJPY for a loss!

Anyone else take this one?

 

[forexsniper]

i just exited the short on GBPJPY for a loss!

Anyone else take this one?

i'm long cable. entry arrow and the lining up of the fast and slow trends all happened within 2 candles on 4H.

hope this is a good one!

 

[coolpixel1]

It's certainly qualified so thumbs up (and fingers crossed), but I have to say I don't like this pair - tends to be unpredictable!

 

[davewooldridge]

trade exits

How are you guys esiting? Spt res,arrows or fast trend or whichever happens first? Or a different method?

 

[coolpixel1]

Personally I try to be consistent with the entry rules set out i.e. Slow Trend, Fast Trend and arrow together after close of (4H) candle signals a trade - the faster they come together the better. You could at a push go in when the Fast Trend is in the right place above or below the line (depending on if its a Sell or Buy) but not yet the correct colour. It is more risky though. My problem is occasionally trying to set the Take Profit if it's near the support or resistance, particularly if it's been ranging a while. However, having said that, and even though there is an element of doubt when entering a trade near S or R, I've noticed that second guessing the strategy does no good, as you can miss out on some great breakouts. Still learning

 

[jaspertrademaster]

good luck Ivan!

 

[forexsniper]

i'm personally exiting on either fast trend going the opposite side of zero or an exit arrow. not using support/resistance levels on the 4H.

i'm looking into FDM and will probably chose support/resistance to exit for that if i decide to go ahead and trade it.

 

[coolpixel1]

Yes, different ways work for different people. I find the FPM S& R fantastic overall, and use them always as a guide, sometimes as a take profit (within 10-20 pips of it anyway). I'm watching too many pairs at the moment and need to get my money management under control. Also, an exit arrow I find sometimes arrives too late, so learning a few candlestick patterns def helps, especially something like the pinocchio pinbar as per the James16 method to indicate a strong possibility of reversal. Perhaps the S&R should be used only with certain pairs as well? For example, I think it's more consistent and less risky on EUR/JPY than, say, GBP/USD.

 

[coolpixel1]

forexsniper, FDM is pretty good, though can get quite intense and requires you to monitor all the time - less time too for decision-making so a bit of general experience is required. Jim (the author) if I remember correctly, favours M15 for FDM and states you should make 150-200 pips per week average trading in the US/European session (especially the overlap) but avoid the close of the NY session

 

[Ingot54]

Hi folks

Sorry I have been awol, but simply cannot chase 2 rabbits!

I appreciate the time and information you guys are posting, and hope you keep going with it.

I think Davewooldridge's question on exits deserves further exploration, as well as the question of entry. Welcome Dave (again) ... and I hope you can find a bit of time to contribute of you own knowledge here. Personally I am angling to make the FPM my only system, and want to grow the ability to trade it well.

One of the things that I have been considering, is Jim's (the author of Forex Profit Monster) system fundamentals. For him to post results, he HAS to be consistent with the rules. If the rules do not result in a trade, (either profit or loss) then he does not (and can not) claim the profit or loss.

But I want traders of FPM to consider a question that has been deeply troubling me:

How many trades on the 4H have you seen missed because the SLOW TREND was so far behind the FAST TREND, that the trade did not qualify?

So many pips could have been made had the entry been taken when the FAST TREND crossed above the zero line, yet because the SLOW TREND was not quite in place until the close of that 4H candle, the huge rally did not attract our entry.

This has been very frustrating for me for another associated reason:

After the SLOW TREND finally crosses, the major part of that move has been completed.

So finally the trade has all three signals agreeing, and the trade is entered at the opening of the next candle. But then, the trend reverses, stopping us out.

Has this been noticed by anyone?

I am tight for time as usual, but will post a series of charts to illustrate what I am meaning here.

I suspect Jim understands exactly what I am saying here, and I wonder if he has another (personal) trigger he uses in his own trading on these 4H trades.

For the sake of consistency and rule-keeping, FPM system MUST have the 3 matching criteria before an entry is valid. But I can feeling in my bones that there is another way to grab these big pip moves that occur before the SLOW TREND moves over the zero line to confirm entry.

Not trying to rewrite the rules, just trying to optimise the entry for times that the SLOW trend is just ONE candle behind triggering these great trades for us. I want to remain a "purist", yet I am certain we can do better ... cautiously.