I mentioned on the CP forum this morning that the CP signals are much more relevant when they are in the direction of the trend. You can use whatever method you like to determine the trend but I find a reliable filter is the 21ma.The CP is a very powerful tool & I’ve written this 21ma guide to try to help people get the most out of the signals. It is my interpretation & should be used for education only. You may be able to add/improve it & if you can then please share your ideas.
Any system's success is dependent on proper money management which is down to the individual trader. Before you start to trade for the day you must have a plan & know exactly where your targets & sl's are on every trade before you make an entry. When the CP gives a signal, use common sense along with support & resistnce to assess your entries, targets etc.
I am not a great lover of indicators but I have developed a system for newbies to filter out a lot of the irrelevant CP signals that should be ignored. Obviously this system does not work 100% of the time & must be used with common sense.
My preferred trading times are from 5.30 GMT up to around 10.00am & then from around 12pm to around 3pm (my charts are all GMT+1)
Here are the charts for today, the red arrows are the CP short signals & the green arrows are the CP long signals.
You will notice that the CP signals on the corresponding side of the 21ma (the blue line) offer the higher probability of success. I also have a couple of other filters on the charts which are CCI (histogram) & RSI & if you use the indicators......along with common sense, you should be on the right side of the market the majority of the time.
The easy ones first.....here is UJ, price was below the Pivot, so bias is short but point 1 shows 3 long signals from the CP, the trade only went 6 pips into profit, found resistance at the 84ma & reversed so would have resulted in a 15 pip loss. Point 2 shows the CP short trigger (our preferred direction as price is under the Pivot) & you’ll see the price also closed under the 21ma. CCI was under zero & RSI was below 50. All traders take their profits & use money management differently but this trade went down to S2 (a good place to cash out) for around +60 pips.
You’ll notice that all the short CP signals were tradable using scalping techniques (except the last one but that would not be taken as it was on DS2) . All of the long signals could all be ignored as they were all under the 21ma.
Here is USD/CHF, the first short signal at point 1 was below the pivot & price closed below 21ma, RSI was under 50 & CCI was below zero so there was good reason to take the trade. That entry yielded a possible +140 pips down to weekly support 1. As you can see again all the long entries could be ignored as none of them met long entry criteria & the short entries close to support should also be ignored