ukfitness trades & ideas

[ukfitness]

With the launch of the Candlestick Pro this week I thought I’d record some trades I’ve taken & also look at some trade ideas using the signals & explain my thinking. The CP has already proved to be an extremely powerful tool if used correctly. Although the CP gives out quite a few signals it would be very unwise to take every one but if you combine the signals with support & resistance levels & common sense then you can be very profitable.
I will be recording more in this journal but here is the main long EU trade from Friday.

Tip: Be selective in the signals you trade, use common sense & look at where price is in relation to S&R etc.

Tip: Over time I have noticed that if 2 or more pairs form the same signal at the same time, then the probability of the trade’s success is greatly increased. I use this filter to trade GU + EU & if AU develops the same formation at the same time as EU & GU then the probability is increased even further. The CP is brilliant for spotting these set ups because it shows all the pairs formations simultaneously. I'll be making some journal entries with examples later.

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The EU pair is in a strong mid-term uptrend so long trades have a higher probability of success.

This trade was taken using the 15m chart for entry signals as this is my preferred time frame to trade but 30m & 1h can be used as effectively.
Price opened above the Pivot (Bullish sign) & went nowhere during the Asian session & because of this combined with the fact that it was NFP release day, a breakout was highly probable. @10.30am (11.30 on my chart as it’s GMT+1) on the 15m chart price forms a Harami/Hammer combination at rising support which was also the 61 fib retracement level from the previous high & low.

A close up shows the formation:

Spot FX EUR_USD 2(06-AUG-10).png (10.66 KiB) Viewed 16695 times

In my opinion the a Hamari formation is a very strong signal & the CP confirms my entry on the next bar when price has formed a “Three inside up” signal @1.3165 @10.30GMT (the bottom signal in the CP screenshot). A check on the CP shows the forecast strength very strong (over 75%) & SL is recommended @ 8.6 pips with TP @+15.
Price doesn’t move either way for an hour & the CP signals another “3 bars up” Bullish signal @ 11.45am with forecast reading over 75%. A check of the history in th CP for this signal on this time frame is favourable.

The CP does kick out 2 counter-trend Bearish signals on the 15m chart (top of the screenshot) @ 11.45 & 12.15 but both are very weak on the CP strength-o-meter (as seen on the screen). The bias is long & the long trade is still open, price is above the rising support,the recommended 8 pip stop loss (tucked under the rising support) has not been hit & the CP has signalled 4 consecutive longs on the 30m time frame (see screenshot below) so the bearish signals are ignored.

[ukfitness]

Continued.....

To add to the confidence in the trade, the CP has been signalling (4 consecutive) long entries on the 30m chart since 8.30am (over 50% strength), 9.30 (over 75% strength), 11.00 (over 75% strength), 11.30am (over 25% strength),

The CP also signalled long entries on the 1h chart @9am with an over 75% strenght Hammer & then another long signal at 12pm with a "3 inside up" signal registering over 75% strength.

So now this long trade is looking a very high success probability for multiple reasons:
1: The trade is the direction of the main trend
2: Price has rejected the rising support
3: Price has rejected the 61 fib level
4: The Candlestick Pro has signalled long entries on the 15m 30m & 1h time frames.
5: GU has completed Bullish formations on the CP 15m, 30m & 1h chart at the same time (More about that later).
Price is just below the Pivot so a breach of it should produce a nice run up.

Price did break out & admittedly the trade was helped by the NFP results (forecast & actual were very different) but technical’s had already positioned us in our long trade. Price broke out & shot straight up to R1, made a sustained break of R1 on the15m chart & carried on up past R2. There was no reason to close the trade for 4 hours & the CP gave out 2 more long signals while the trade was still open.

The first warning that the Bull-run was over was the shooting star that the CP signalled (top signal on screenshot) @14.15 & price had already done over 100% of the daily ATR so a correction was very probable.

Each trader has different money management methods of taking profit etc. But if you had taken entry at the first 15m CP signal @ 1.3165 with 9 pip stop loss, used common sense during the trade & closed at the shooting star signal, then you would be +154 pips in profit......a very nice trade & very nice risk reward ratio.
All the recommended targets that the CP issued were hit.
(Indecently the Shooting star signal went on to yield a possible +45 pips....but that’s another trade)

[ukfitness]

Here is another example of using the signals combined with other information.

This trade on EU was on Friday morning (before the main long trade) & was taken using Marks primary trade signal on the main forum which was short from 1.3200. Price didn’t manage to break that level through the Asian session & the CP gave a hanging man short signal @7.45am on the 15m time frame (bottom signal on the screenshot) with target +16 & SL-6.

The strength-o-meter was under 50% on the signal but a quick check of the CP showed that GU had formed a hanging man (which was then followed by a Bearish engulfing & then 3 inside down bear signals) & AU had formed a three inside down (that had rejected R1).

EU hit both the CP target for +16 & Marks Target 1 for +25 before finding support at the rising trendline where the CP gave strong Bullish signals, so if you were still in the trade that was a good indicator to close in profit.

[ukfitness]

Continued....

GU & AU also both hit the CP targets from the simultaneous short signals (AU +14 possible +22 & GU +14 possible +60) & the CP then signalled long for these 2 pairs at the same time as the EU long signal.

CP signal at the red arrow & price dropped to the 76 fib level where the CP gave Bull signal.

CP signal at the red arrow & price dropped to the Pivot where the CP gave Bull signal.

[ukfitness]

Another example of using the pairs lining up as a trade opportunity came on Friday afternoon . After EU’s long run up, the CP signalled a Shooting star @14.15.

A quick check of the CP shows AU displaying a Bearish engulfing signal at the same time (that was preceded by a shooting star that the CP didn’t signal).

The CP didn’t signal a short for GU at that time but a check showed GU had formed a Bearish Harami. @ 14.30 the CP did signal a weak GU short 3 outside bars signal now all 3 pairs have given a short signal.

As the CP shows, all pairs hit & exceeded CP targets. Targets were: GU +14, EU +19 & AU +13. Possible results were: GU +23, EU +52 & AU +63.

[ukfitness]

Continued....
Here are the charts from the above trades:
EU CP entry signal at red arrow:

Spot FX EUR_USD 1840(06-AUG-10).png (11.69 KiB) Viewed 16691 times

AU CP entry signal at red arrow:

Spot FX AUD_USD 1840(06-AUG-10).png (11 KiB) Viewed 16691 times

GU CP entry signal just past Harami SS on chart:

[ukfitness]

The very first 15m signal from the CP.

The first signal from the Candlestick Pro was on the launch day @ 5.45am the membership email was sent around 5.45 so if you were quick enough to apply you would have received these signals.

This is another example of using all 3 pairs lining up as confirmation for a trade.

EU, AU & GU all formed hanging men at the same time on the 15m chart & although the strength-o-meter was not very strong on any of them, the fact that all 3 signalled the same formation at the same time was a good indication.

CP targets were GU +14, AU +17 & EU +16. As the screenshots show, after 10 bars the trades went a possible GU+82, AU +26 & EU +44.
What a great start the CP.

When the 3 pairs line up like this I would recommend taking the pair with the strongest reading on the CP strength-o-meter or the pair that has rejected a significant level & in this case the GU reading was the strongest & yielded the highest potential pip gain.

This may sound obvious but for the newbie’s: I would advise against trading all 3 pairs from the same signal because if the trade does go against you then you have tripled your exposure.

[markelshark]

This is a fantastic write-up, Neil. I'm sure your got a lot out of writing it too. Great work.

[ukfitness]

Thank you for your comments Mark, I’m honoured.
You’re right, I did get a lot out of writing this & always find that keeping the journal helps.

[ukfitness]

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