I have been a forex trader since more years. From time to time I still trade, but my trading times have increasingly dropped since I feel its more and more boring waiting for the market to give you a proper signal all day. The main reason why I am writing this article is because I do not like to sit behind my desk all day. So I have decided to give it to all of you who want to benefit from it. Price for my system was three hundred dollars, but due the relativity of success in the forex market I now have decided to give away my system information for free. May the knowledge bring you success and wealth and if you get both in abundance, remember to share it with those around you.
Winning the forex market depends 70% on the trader, the other 30% is the system, so I think it was not fair selling my system even if it has a high probability rate. If you win or lose depends a lot on your personality and feelings so one might lose even if he has the best system in the world. The system was designed during careful analysis of the market in the time of more than six months. It does not need any improving, nor changing. It is fully optimized for trading, so do not attempt to change any indicators or settings! Trade it as it is, demo trade it for at least two months to get a proper feeling of all the indicators and the system altogether. Last but not least, I am not responsible for any financial loss or benefit this information will bring you. You as a trader cary full responsibility for what happens with your money!
Time frame: 5 minutes
Trading time: From EU open until US close
Recommended Forex Pairs: USD/JPY, USD/CHF, GBP/USD, EUR/USD, USD/CAD, AUD/USD, EUR/JPY and Gold
Trend Follower© - Master the markets with correct timing and executing rules
This is not a “get rich quick” scheme. Real efforts are required to learn trading this system. As always try to demo or paper trade the system first before using real money. Trading the forex market has large potential rewards and as such also large potential risks. You must be aware of the risks and willing to accept them in order to place responsible, informed trading orders. It is strongly advised not to trade with money you can not afford to lose.
©Copyright 2007, ALL RIGHTS RESERVED
Notice: This publication is designed to provide valuable information. It is written with the understanding that the publisher or author is not engaged in rendering legal, accounting, or other professional service. If legal advice or other assistance is required, the service of a competent professional should be sought. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the author.
Introduction
Trend Follower is a trend following system. If you ever heard the saying Trend is your friend, this system will show you the mechanics behind these words. Its unique approach to the market will give you a great understanding of market movements and allow you to see that what happens is not random but an underlying order behind price movement. Through practicing these exact rules with which the system was designed, you will get a more clear picture of the market and begin to reap the financial rewards.
Trend Follower is unique in that it doesn’t attempt to predict the future but rather a tool that helps you to recognize the current trend and lets you go with the current flow. Mastering the system will give you greater peace of mind because you won’t need to keep up with the economical events, trying to figure out the meaning of numbers, or opinions of experts. Unlike most other trading systems Trend Follower does not depend on past performance and should work on every market. Its formulas are not based on pattern recognition and random selection of indicators, but rather a clean understanding and timing of the market.
The system was created from a need not only to trade profitably but also to give the traders a more clear picture of what they are doing and why they are doing it. Many commercial or public system just consist out of indicators without giving a clear understanding of price movement and inform the trader with signals without him knowing why he got the signal and why he should enter the trade. This way a trader will not thrust the method and as a result he will have a hard time being consistent. If you don’t know exactly what you are doing, you can not thrust the system and if you can’t thrust the system to follow the exact rules, you will not be profitable. Trend Follower ensures that the entries and exits are clearly defined and at the same time allow the trader to be able to explain why he took the trade!
Traders are no longer subjects of spikes, volatile markets or rallies that mess up many good systems. Money management is also a very important aspect of the system and you should take a good look at some articles on the Internet or in a book about it, although we have covered exits and entries in the rules section. Without proper money management one is bound to fail in the long term! MONEY MANAGEMENT! Burn these words into your head.
Components of The System
First we are going to take the system apart and provide a little description of all the indicators.
The indicators are:
a) Signal Arrows
b) MACD
c) Volatility Channel
d) Laguerre
e) Slope Direction line
f) Pivot Points
g) Guppy Multiple Moving Averages (GMMA)
Signal Arrows
The alert is produced by a cross of two Exponential Moving Averages. Faster EMA is 4 and slower EMA is 8.
MACD Histogram
The default settings are (our system uses 5,35,5) :
* Slow moving average - 26 days
* Fast moving average - 12 days
* Signal line - 9 day moving average of the difference between fast and slow.
* All moving averages are exponential.
The signals from the MACD indicator tend to lag price movements. The MACD Histogram attempts to address this problem by plotting the distance between MACD and its signal line. Because of this, the histogram signals trend changes well in advance of the normal MACD signal. It however should not be used alone, therefore we have other indicators to confirm our signal.
Volatility Channel
This is a technique that measures volatility. It consists of 34 EMA high and 34 EMA low. It is not really a part of the system, but I like to see it, especially if I look for confirmation on longer time frame.
Laguerre
This is an advanced form of RSI indicator. The Laguerre Transform provides a time warp such that the low-frequency components are delayed much more than the high-frequency components. Globally, latest bar data has more weight than previous bar data a bit like an exponential moving average.
Slope Direction Line
The name says is it all. Its a line that measures the slope of the trend and direction as well. The direction is shown as red for a downtrend and blue for an uptrend.
Pivot Points
Traders use pivot points to find intraday support/resistance levels. Pivot points are found by a simple calculation which involves the open, high, low and close for the previous day of any particular stock or index. It is said that when a price hovers below a pivot or pivot support/resistance and breaks up through it then its a buy signal (or vice versa for a sell signal). Or if the prices are above the pivot it is considered bullish and if they are below then bearish. The most common way to use pivot points are as reference points for entering trades if your other favorite indicators are also giving the same directional signal. Market Makers can use the pivot points to create a market by shifting the price around between levels to entice buyers or sellers of a stock into a trade. This can best be seen on low volume trading days as the prices fluctuate between the calculated points.
Many variations exist for calculating the pivot point and its related support and resistance levels. The Traditional Method:
* Pivot point = (H + L + C)/3
* First support = (2 * Pivot) – H
* First resistance = (2 * Pivot) – L
* Second support = Pivot – (H – L)
* Second resistance = Pivot + (H – L)
In our system we mainly use pivots for exits. You don’t need to know these calculations as they are automatically calculated in the software, its more just for informational purposes.
Guppy Multiple Moving Averages GMMA
The Guppy MMA is a combination of moving averages and is optimized to allow for smoother and more accurate moving averages that are not easily spiked by sudden market movements.
The biggest fallacy of basic moving average crossover systems is that they can and will be very choppy when markets are not trending. At the same time when using basic crossovers systems the traders have little or no idea of underlying trend. Is the trend continuing or is it about to end. The Guppy MMA will answer all this questions and will give you the reason why you entered the trade so you can improve on your trading skills.
The importance of this indicator can not be emphasized enough! You must agree with what it is that it is telling you. The original guppy method was created by Darryl Guppy and is called the guppy. The original consists of 3,5,8,10,12 and 15 EMA for the short term moving averages (traders) and 30,35,40,45,50 and 60 EMA long term moving averages (investors).
The time frame is not important with this indicator, in the Trend Follower system we use it in 5 minute markets, but it can be used anywhere from 1m to monthly charts. It is just as accurate in any time frame. In our modified guppy we use 5 different colors for each different type of trader. When you are trading it is important that you know the underlying trend, hence you have to know what other traders are doing. Using the colors you are able to tell what other market participants are up to and as such make better trading decisions.
1. Yellow - short term traders (Mainly going for quick pips and not interested in holding positions)
2. Orange - short term traders (Those hold on the positions a little longer than the yellow)
3. Blue - mid term traders (Mainly swing traders, usually hold on the positions longer than previous 2)
4. Green - long term traders (Will hold on to their positions longer than mid and short term traders)
5. Red - long term traders or investors (They hold on to their position the longest)
The MMA reveals the relationship between short term traders and investors. Traders (yellow and orange) probe for weakness in the underlying trend and always lead the next trend or current trends. As they are going for quick profits, they are in and out of the market very quickly. Investors on the other hand are slow to move. However for a trend to succeed, the support of investors (red and green) is essential.
As a trend trader, you will be looking for situations where all the traders agree on the direction of the market (Yellow, Orange, Blue, Green & Red moving averages). If all the traders are in agreement, then that is the direction to trade. Any disagreement means you do not trade. By correct interpretation of the MMA, you will be able to identify the trend, possible trend exhaustion and also possible trend changes. Overall, you will be able to make better trading decisions.
Breakouts
Though we avoid trading breakouts, the guppy MMA shows us exactly when this is happening. Once a breakout has occurred whereby the yellow lines cross the red lines but the green lines are still below the red, we would expect the yellow lines to retrace back. This is the point where we would be waiting to place our new positions in the direction of the new trend. Please note that you DO NOT place trades during a breakout but after the prices have retraced which is denoted by the green and red lines changing positions.
Long Breakout:
The red lines had been above the green lines then the yellow crossed the red lines and soon the price retraced to the other lines. The green are now above the reds and they show a long trend.
Short Breakout:
The red lines had been below the green lines. This was indicating a long trend. Then the yellow lines crossed the green and red lines. Once the green lines have been below the red lines we can say that we are in a short trend now and we can wait for signals.
Remember the positions of GREEN lines and RED lines. For a trend to be considered long the green must be above the red lines, and for short the green lines must be below the red lines.
False Breakouts
False breakouts can be more easily identified with the Guppy MMA. This also is one of many benefits of this indicator. False breakouts can be financially and emotionally draining to a trader.
If the yellow or orange color lines cross the reds but the green lines still remain in their previous direction, then we are most likely facing a false breakout. For a trend change all lines especially the greens must change positions with the reds. You should especially be careful with volatile pairs such as GBP/USD.
The Rules
Trend Follower - The Rules
All the criteria must be met at the bar with signal or one after! If everything is not met at the signal bar or one after, leave it alone! It might eventually go the right way, but in the long term it will give more false trades. Only take trades where at the signal bar or one after all these rules apply! We enter the next bar after the signal.
Long\Buy
ENTRY: First We wait for a long signal alert
GUPPY MMA: The green lines must be above the red lines! Green, Red and Yellow lines must agree and head north. All the lines must be going in the same direction!
LAGUERRE: Laguerre line must cross the 0.15 from below and head up
MACD: This is important! When you get the signal MACD must be above 0
STOP LOSS: 5 points (+spread!) below recent LOW
ALTERNATE STOP LOSS: 20 points on default pairs and 25 point on more volatile pairs such as the GBP pairs and crosses. Choose whatever SL method fits you best
EXIT (combined): When you open a position you can then choose to close half of the position on the first pivot point and let the other half run till the slope direction line goes red
ALTERNATE EXIT: You can choose your own method and close positions at pivot points or when slope direction line goes red after a move, or when price (a new candle) opens on the other side of the volatility channel
Short\Sell
ENTRY: First We wait for a short signal alert
GUPPY MMA: The green lines must be below the red lines! Green, Red and Yellow lines must agree and head south.All the lines must be going in the same direction!
LAGUERRE: Laguerre line must cross the 0.75 from above and head down
MACD: This is important! When you get the signal MACD must be below 0
STOP LOSS: 5 points (+spread!) above recent HIGH
ALTERNATE STOP LOSS: 20 points on default pairs and 25 point on more volatile pairs such as the GBP pairs and crosses. Choose whatever SL method fits you best
EXIT (combined): When you open a position you can then choose to close half of the position on the first pivot point and let the other half run till the slope direction line goes blue.
ALTERNATE EXIT: You can choose your own method and close positions at pivot points or when slope direction line goes red after a move, or when price opens on the other side of the volatility channel.
SUMMARY
That’s it, I hope you enjoyed the reading and that it was presented with words easy to understand. May this method help you to be more profitable and better trader.
As the author of this system I reserve all rights for it. You may NOT share any information given here, outside this website. If you want to share this system with a friend you can direct them to this web page where they will find all the necessary information.
If you have any questions, please post them in the comments or email me. Before you do that, please look at the Trend Follower FAQ. If by any chance the download link is dead email me for re-upload and/or look down in comments if somebody mirrored the link into another host.
If you want to let know others about it, feel free to link to me. If you want to link to my post please use this following code to direct your reader on the start page of the article, rather than the website itself.
Indicators and template are for MT4, Meta trader.
(To download scroll down and click on free, then enter the image verification code and you are ready to download)
Thanks and good luck!
FOLLOW-UP: Trend Follower FAQ
RECOMMENDED ALTERNATE READING:
July 26th, 2007 at 11:09 pm
Wonderful system. Thank you very much for sharing.
July 27th, 2007 at 4:16 am
Thank you for posting this.
July 27th, 2007 at 9:49 pm
how to define the signal alert in one bar?
would u explain me more clearly about entry rules?
July 28th, 2007 at 9:37 am
Hi, for some reason blogger images were not working, I have now uploaded them elsewhere. Have you had problems understanding the rules because you did not see the images? Do you understand it now?
July 30th, 2007 at 10:27 am
It says that the metrader experts and indicators are password protected? What is the password
July 30th, 2007 at 7:57 pm
I am unable to sownload the file, would you please email it to me at fxfatcat@gmail.com
I keep getting invalid session errors?
Thank you for sharing
Wayne
July 30th, 2007 at 7:59 pm
Thank you for sharing.
Could you please email the file to me at fxfatcat@gmail.com.
I continuously get “session error” messages and am unable to get the file?
Thanks
Wayne
July 31st, 2007 at 1:33 am
great post!
would you you able to post more examples of your trades using this method? and your opinion as well.
July 31st, 2007 at 4:21 am
I’ve sent you the file to fxfatcat[at]gmail.com. It would be great, if someone can mirror and re-upload the file to another service, where the file could be downloaded instantly for those who can’t use rapidshare. I can’t remember such a website right now.
I didn’t add any password on the files. You can open them and add to the proper directory normally.
There is an official discussion about trend follower on forexfactory. Screens may be posted there!
http://www.forexfactory.com/showthread.php?t=40325
August 1st, 2007 at 11:58 am
Hi Johnson,
Thank you for your trading system, it looks and works great, however the colors I have are 1purple2red3green4blue5orange No yellow.How can I make sure the colores are not mixed up? On the monthly eur/usd colores are from top to bottom 1 orange
2blue 3green 4red 5purple
Is it correct? Alex
August 1st, 2007 at 12:15 pm
I don’t know why your colors look that way. The system is optimized to have the exact colors as in the screenshots. You should manually change the colors of the MA’s if you don’t have it the same. Have you applied the template provided in the zip? First extract the indicators to the proper metatrader folder, then run the template and everything should be fine
August 2nd, 2007 at 5:13 am
Hi, nice system. almost similar with the system that i am useing now. can u tell us the variable for MMA for all colour pls?? coz i don’t have meta4. I use another streaming. Thank’s.
August 2nd, 2007 at 11:45 pm
Here you go. I don’t know how well it will perform on other streamings . All EMA’s are based on Price Close.
GOLD (2,3,4,5,6,7,8,9,10,11,12,13,14,15)
DARK ORANGE (17,19,21,23,25,27,29,31,33,35,37,39,41)
MEDIUM BLUE (44,47,50,53,56,59,62,65,68,71,74)
FOREST GREEN (78,82,86,90,94,98,102,106,110,114,118,122)
RED (125,130,135,140,145,150,155,160,165,
170,175,180,185,190,195,200)
August 6th, 2007 at 3:16 am
No telling a lie when I say I have seen about 100 different system in the past years and this1 seems to be one of the best in long time.Many systems are based on many indicators that doesn’t work together unlike this1. Applaud for being so kind and share this with the rest of the blog readers !
Edias
August 6th, 2007 at 7:39 pm
Hello to all readers
I have a really good Idea in trading . is there any programmer can help me to make an EA (without any fee) according.
please contact me at( afridooni@gmail.com)
hope to recieve from a programmer
August 15th, 2007 at 9:07 am
how did you get the idea for your system ? please share the process.
August 15th, 2007 at 4:44 pm
http://www.mediafire.com/?3jmzmjw11vx
mirror of rapidshare…
Regards,
Miro
August 17th, 2007 at 11:49 pm
How I got the Idea? When I started out, most of the system made no sense. It seemed as if the indicators were just randomly picked up and pasted on the chart. I knew I had to design my own then. I was trying to design a high probability system, with great timing and a good ratio between risk and profit. Wait for the perfect wave and then dive in. The search for the indicators began and those we use here line up together and every indicator does its job. That’s pretty much the biography of Trend Follower.
August 19th, 2007 at 8:18 am
on your template, the volatility Channel are 34 ema high/low, here on this website it says 34 ema open/close, which is it ?
August 20th, 2007 at 12:26 am
Thanks for noticing the typo, fixed. It is as in the template 34 EMA high and 34 EMA low. Original design is from Raghee Horner, I have adapted it:
http://www.forexproject.com/tag/the_wave/
August 20th, 2007 at 10:06 am
Hi There, great system.
I have back text for a number of months back and it seems to work pretty well.
I have two questions:
1. Do You have the the “numbers” for this system?
percentage of success and failures of this system for, let’s say, 3-4 years back ?
How many orders does it usually open per day, week, month, year ?
How many pips does it make on average, StdDev and stuff like that ?
2. Do You happen to have the system as an ExpertAdvisor for MT4 ? This could save me some time on trying to move all the code from indicators into EA for backtesting.
Thanks a lot in advance,
Once again, SUPERB system.
August 20th, 2007 at 5:41 pm
I have been unsuccessful at downloading the indicators and templates. Could you send them to pdean123@embarqmail.com? Thanks!
August 20th, 2007 at 5:45 pm
Could you please email me the indicators and templates as I cannot get them to download.
pdean123@embarqmail.com
August 21st, 2007 at 4:13 am
Look like a great system! One question…somtimes all the criteria line up but the slope indicator is opposite (eg. all criteria are met for a long trade..but the slope indicator is RED)…is it still safe to enter this trade?? Please respond…Thanks!!
August 23rd, 2007 at 7:25 am
this trading system seem good, but for us newbies how do you install this on your metetrader and getting started.
muyiwa
August 23rd, 2007 at 11:20 pm
Put the indicators in this folder (assuming your default C: installation); You must offcourse unzip them.
c:\Program Files\MetaTrader\experts\indicators\
Put the template in this folder; Unzip this too.
c:\Program Files\MetaTrader\templates\
August 23rd, 2007 at 11:22 pm
“Look like a great system! One question…somtimes all the criteria line up but the slope indicator is opposite (eg. all criteria are met for a long trade..but the slope indicator is RED)…is it still safe to enter this trade?? Please respond…Thanks!!”
RESPONSE: This question is answered in the official forexfactory trend follower discussion, go there for the direct answer.
August 29th, 2007 at 2:01 am
Hi, the system looks good! but i could not find the significance of the thick blue red etc.. lines, please explane. thanks for sharing the system!
August 29th, 2007 at 12:01 pm
thanks for sharing,
after a signal if nothing happens how long do you wait before exiting?
on a 5 min. chart would it be a good idea to exit after a quick 25 pip profit or in your experience it is worth waiting and taking risks of losing?
is gbp/jpy not a good pair for this method?
thanks a lot,
vanupips
August 30th, 2007 at 3:52 am
It’s good to leave at a 25 pip profit, because you are risking only 15 pips - 20 pips (stoploss). Gbp/jpy is good for this system also (sometimes too choopy, so you have to raise your stoploss and profit target accordingly), but I have not included it because it has a bigger spread than the rest of the pairs.
August 30th, 2007 at 3:53 am
“Hi, the system looks good! but i could not find the significance of the thick blue red etc.. lines, please explane. thanks for sharing the system!”
RESPONSE: The thick blue red is the slope direction line. You can read about it in the manual and more detailed in the FAQ.
August 31st, 2007 at 6:29 am
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We’re looking to work with people that will help us bring FxRebates to the traders. If you’re interested, let me know and we’ll work something out. Good commissions and monthly residuals while providing a great service that benefits your traders!
All the best & hope to speak to you soon…
http://www.fxrebates.com
Sonny
Sonny@fxrebates.com
(866) 397-0203
(561) 807-1969
September 2nd, 2007 at 11:29 am
This is my 4th month in forex and i’m beginning to form an understanding on concepts such as SnR, trendlines, o/b and o/s and then i came across this system which contained all the said concepts. I’m so happy, will learn this by heart and hopefully will be profitable in doing so. ;). Thank you for sharing this sytem.
September 5th, 2007 at 8:35 pm
hey Guys
Great system could some one please email me the indicators zip file to winatfx@yahoo.com.au
September 6th, 2007 at 4:53 pm
Awesome set up.I’ve learned more from your manual then I have in the last three months from any other source. I use it with Vantage Point software, and I find this gets me in the right direction with more confidence. I made some good trades tonight using this. the only change I made was the arrows. the red arrow blended with the red lines at times. I made it white. It helped. thank you again for sharing an awesome chart setup.
September 10th, 2007 at 3:25 pm
Hi,
Thanks for posting your system. It looks excellent from first impressions.
There is one thing about the MACD signal that I hope you could clear up since I’m not really used to the MT4 platform.
“The signals from the MACD indicator tend to lag price movements. The MACD Histogram attempts to address this problem by plotting the distance between MACD and its signal line. Because of this, the histogram signals trend changes well in advance of the normal MACD signal. It however should not be used alone, therefore we have other indicators to confirm our signal.”
The MACD indicator on MetaTrader 4 lacks the ‘histogram’ that is commonly used in the MACD. The green line (as used in this template) is actually the MACD line and the red line is the signal line. The histogram, as is shown on most other platforms, is shown as a seperate indicator called Moving Average of Oscillator.
Am I just interpreting this wrong? or is the only thing we are looking for that the true MACD line (in this case, the difference between 5EMA and 35EMA), be +0 for long and -0 for short?
September 10th, 2007 at 10:15 pm
Hello,
thank you for your comments and questions. My reply is: Don’t complicate! Just enter when the macd shows + for long and - for short
September 12th, 2007 at 9:00 pm
Hello
Thanks for the trading systems. Look good. Now I am testing out. Have loaded all template and indicators to MT4. All showing except the Slope direction line. Check the indicator and it is there but did not appear in the chart. Have anyone encounter this? How to solve it? Thanks alot.
September 12th, 2007 at 11:12 pm
if green line is below the red line..Green , red and yellow lines are agree and head down..MACD is belew 0, but laguerre line is below 0.15…can I short?
September 17th, 2007 at 4:11 pm
Im happy that you share this system with us!
- Thank you
October 5th, 2007 at 10:09 am
- Thanks for sharing…
October 11th, 2007 at 9:29 am
Hi Wicker,
I had download your trading system and practicing it for 2 months using demo acc. Very profitable! Now i will go for real acc trading using your trading system. Thanks again for your sharing.
October 11th, 2007 at 10:33 pm
You’re welcome! I wish you success!
October 20th, 2007 at 7:09 pm
Hi Johnson,
Thank you and I never met someone very generous like u. U r my hero.
October 22nd, 2007 at 12:14 pm
can you send me the indicators zip file to bikakemi@dnet.net.id
Thanks…
October 28th, 2007 at 12:51 pm
can you send me the indicators/template zip file to chrzanfx@o2.pl
October 30th, 2007 at 1:51 pm
Hi, I too thank you very much for this perfect system, and I was wandering if you could explain for what are those w_r1 line, m_p line…?
November 1st, 2007 at 3:50 am
Hey - looks excellent! I’d be keen to see a backtest equity curve also if you have some?
Is there an alternative for ‘Laguerre’?
Many thanks.
November 1st, 2007 at 8:26 am
Thanks to all for their comments. About the requests to send the files. Sorry I can’t send indicators everyday to individuals, we have 2 mirrors from where you can download ALL.
The w_r1 line, m_p line, etc.. lines are resistance points, or pivots.
Laguerre is an important factors of this system, in fact ALL are. there is no alternative to it.
November 2nd, 2007 at 5:10 am
Hi Johnson,
I’ve just spent quite some time reading up on your system and really see the merits.
Couple of clarifications please:
1) You speak of the Laguerre crossing down under .75 or above .15 which seems odd as that is .25 spacing at the top and only .15 at the bottom. Do you mean .85 and .15 by any chance (or .75 and .25) as the crossover points?
2) For the MACD to be above or below 0, are you referring to the MACD line, MACD indicator, or the MACD histogram being above/below 0?
Thanks.
November 2nd, 2007 at 6:42 am
1) not everything needs to be mathematically correct. The rules are cross of 0.75 for short and cross of 0.15 for long.
2. MACD histogram.
November 4th, 2007 at 6:21 pm
Thanks for the clarification Johnson. Are you able to explain why a short would be different to a long - this seems bizzare to me??? Afterall, we’re trading FX here not shares, so a short for currency is of course a long for the opposing currency … so why wouldn’t both long and short trades be treated the same with regard to the Laguerre confirmation? I’m pretty mathematical and I’d like to sort this in my head … how can it be that for a short we need to wait til a .25 retraction from overbought, but for a long we only need to wait for a .15 retraction from oversold. This is particularly strange to me when trading a currency pair?
My concern (thinking outside the box) is that during your backtesting period, the pair was in a long term trend in one direction - hence the Laguerre figure may have been bias in that direction. If in the future, the long term trend reverses then then the Laguerre figures may be back-to-front in terms of the .15 and .25
Any further info on how/why its not the smae figure for both would be appreciated.
November 5th, 2007 at 12:31 am
I give you a document here that should probably help you further :
http://rapidshare.com/files/67541497/TimeWarp.doc.html
November 5th, 2007 at 8:12 pm
Thanks for the document Johnson. Upon reading it I see the default recommendation is using the line cross at 20 and 80 (ie. 20% from 0 and 20% and 20% from 100 … both long and short use a 20 line cross).
I understand your system has optimised these figures but cannot understand why your long and short triggers are different (ie. 15 and 25 from the max and min lines)? This is not a criticism, but more to enure I understand the theory and of course wanting to double check you had not overlooked something and did you meant the long and short trigger lines to be same distance from the max and min. (ie. both 15, both 20, or both 25 … to cater for all markets)?
Thanks again.
November 5th, 2007 at 11:31 pm
Of course I understand it is not a criticism. You want to know what it is that you are doing. I’ve found out the recommendation to use these settings from another trader whose name I can’t remember. He found out during testing through many currencies that when the trend goes up its more probable is going to continue than when going down. You’ll see if the laguerre line is fluctuating up in the northern area it will many times go down to 80 and then bounce again to 100 an down again… but you can try the 80/20 settings, you will see that it is not much different, but you may take one or two signals to much.
November 7th, 2007 at 6:08 pm
Thanks Johnson for the extra info. I suspect that the person that did this testing, and looking at long term recent data … and is seeing the current very long term trend of currencies in an uptrend against the USD, which supports your comments. However, this up trend cannot continue forever and should it turn to form a long term down trend then I suspect your bias on the indicator may reverse … ie. .85 to go short and .25 to go long.
Neither of these explanations however support the fact that some of the currency pairs are already reversed in their format such as the USD/JPY, USD/CAD, USD/CHF. Perhaps this might explain why the USD/CAD does not work so well on this system (so the forums say)?
November 8th, 2007 at 1:13 am
As you said above neither of the explanations support that some of the currency pairs are already reversed. Meaning the opposite correlation between some pairs like usd/chf and gbp/usd. When one goes up, the other usually goes down, one is in a long term north trend, the other south, but both work, the system works. No other explanation really needed
However, the difference between the settings 80/20 and 75/15 is minimal so if it really bothers you, you may change it to the more mathematically correct setting - because once it crosses the 0.2 from above or below it will usually continue.
November 11th, 2007 at 4:22 pm
Hi Johnson,
Thank you VERY MUCH for sharing your great technique! I am sure you have helped many people to avoid costly mistakes.
You mentioned that you tried your strategy with gold. Would it work with other commodities too? Many thanks!
November 11th, 2007 at 11:05 pm
Yes, gold works good with this strategy. This strategy could work on almost every market, but I can’t make an exact recommendation… you should demo trade it on some commodities you trade and see if it works. If not, just use the recommended markets!
November 15th, 2007 at 12:09 pm
Could you please email me the indicators and templates as I cannot get them to download.
chrzanfx@o2.pl
November 15th, 2007 at 8:50 pm
thanks for sharing your system. my trading system is ‘trend follower’ and its profitable.
best regards
parsfx
November 24th, 2007 at 7:02 am
Please could you please e-mail the experts to me at realwillz@yahoo.com. I could not get them to download. Please i will really appreciate it a lot.
December 4th, 2007 at 9:12 pm
Great system!! question-How do you you use the volatility channel?
All the best
December 5th, 2007 at 6:08 am
I use it to measure volatility. If the bars(candlesticks) are inside the bands it means that the movement is constant, but the bar breaks out of the channel it either means there will be a breakout or the market is volatile.
I also use it for exits like explained in the manual above.
December 10th, 2007 at 9:18 am
I think someone have stolen your idea,
and sell your systems…
http://www.kunciforex.com/sistem/sistem.htm
December 10th, 2007 at 9:24 am
This pisses me off so much… thanks for letting me know - will take care of it.
December 12th, 2007 at 10:38 am
Thanks a lot for sharing the wonderful system. but I could not download the indicators. Would you please e-mail the experts to me at heheundhaha@hotmail.de. thanks again.
December 12th, 2007 at 12:03 pm
Sent, look in your spam box if its not in your inbox.
December 17th, 2007 at 2:08 am
yes,i have recieved them. Vielen Dank!
December 17th, 2007 at 8:15 am
here is quotation from FAQ page:
==================================
a) At The SIGNAL BAR | WE TAKE THE TRADE
==================================
how do we take the trade at the signal bar? signal bar is one with arrow, right? as i know, the signal bar occur when it closed..
or do you mean the “signal bar” is one next to the arrow??
December 17th, 2007 at 9:31 am
one more think, what do you mean about “recent low/high” for SL?
do you mean low/high of previous bar? or what?
December 18th, 2007 at 2:17 am
Well naturally we can’t take the trade at the bar with the arrow. Our signal bar is right after the bar when the arrow appeared.
recent low/high is the current spike that appeared anywhere from about 1-30 bars in the past.
December 26th, 2007 at 12:40 pm
Wow….this is the best Signal Alert with explanation. thanks for your effort for sharing.
God Bless You
December 29th, 2007 at 4:42 pm
How do I get my colours to match with the one on your screen shot. Also how do I download a volatility chanel.
December 30th, 2007 at 2:37 am
Just apply the provided template to the chart and you will have the colors and the volatility channel.
January 17th, 2008 at 8:34 am
nice indikator….
i will try start from now…
January 24th, 2008 at 11:34 am
http://www.forexbustop.com are giving away your system as a “free” bonus for people buying their ebook. Whole thing looks like a scam………
January 25th, 2008 at 2:33 am
I’ve spoken with the owner and he linked to my website where the information is given free. He doesn’t sell my system, so its okay.
If the website its self is scam or not is not in my control…
January 26th, 2008 at 3:17 am
Hi Johnson,
Thank you very much for your wonderful system and sharing with us. May God Bless You Always.
January 30th, 2008 at 6:57 am
First of all, I’d like to thank Johns0n for what looks like a great system !
I have a question re. the Laguerre input settings. When going through the whole thread on FF, I came across this remark by JimDandy:
http://www.forexfactory.com/showpost…&postcount=198
“I checked the imput settings on the Lageurre, .66 and 9500. I checked on the computer with the bad signal. It was set on .7 and 950. I changed it to .66 and it drew a perfect Signal also. Ive never looked at the settings before now.”
.7/950 are the standard settings.
What are the correct settings ?
.7/950 ?
.66/950 ?
.66/9500 ?
something else ?
Thanks in advance for looking into this !
January 31st, 2008 at 12:57 am
Just download the template and indicators HERE FROM THIS ORIGINAL BLOG and you will have the laguerre indicator, with correct settings. There are many modifications spread around the internet about this system or the indicator itself. You can avoid this easily by downloading it here.
What matters are the gamma settings. Those are set to 0.66!
February 1st, 2008 at 3:49 am
Hi Johns0n
I have actually checked the laguerre.mq4 file of the original files, as one can download from this blog. It states thet Gamma = 0.7 and Countbars = 950.
In your recent replies, you state that it should be 0.66.
What is the correct value? We have several people waiting anxiously for the answer..
February 1st, 2008 at 6:12 am
I’ve replied to this here now:
http://www.forexfactory.com/showpost.php?p=1831061&postcount=1362
February 7th, 2008 at 1:24 am
To TheWicker
Have been unable to post to the Forexfactory thread, so thought I would try here.
I have now been testing this system for around four months during this time I have had some good trades and some bad trades, initially I downloaded the files and read the faq on your blog and then
added the EA by pmurfin, this EA proved valuable when trading a 30 min time frame in allowing me to leave my computer and receive the alerts by cell phone.
However since the slope line is included in the EA as a condition for taking a trade I decided not to use the EA any more as the slope line is not a condition for taking a trade in the original system. I am now following the system as it was originally intended without considering other factors that I have gained through my experience in trading.
However this has proved to be a false strategy because while only looking for trades within a 5min
time frame it does not consider what has already taken place, meaning that a 5min time frame does not show the same large move down that a 30min time frame would.
Yesterday (Wednesday) a few hours after the European session opened while looking at EURJPY, USDJPY, AUDJPY on a 5min time frame, I had a valid short trade on all three pairs, the price on all three had been floating around the support 2 line, EURJPY and USDJPY had nothing to stop them moving to the support 3 line, while the AUDJPY had a weekly pivot line half way between support 2 and support 3, a take profit had been placed at support 3 on all trades. All trades moved into profit and continued to gain until the AUDJPY reached the weekly pivot point, after a little bounce it retested the weekly pivot and then moved up to trigger my stop, the USDJPY and EURJPY both followed a similar pattern after a little hesitation and then also took out my stop.
After looking at the charts in a 30min time frame it had been found that there had already been a large move down and the market was consolidating in this time frame, had I been aware of this move I would have set tighter stops, or considered moving them to lock in profits, however your
system does not consider looking at larger times frames to get a bigger picture of what the market is doing in the long term, and a 5min time frame may not show large moves that have already taken place.
I would be interested in your views and also would like to know at what point does the pivot points and support and resistance lines reset for the next trading day, when working in a different time zone to the USA.
February 7th, 2008 at 4:28 am
That’s why we need to look at the direction of the trend on the 30 or 60 minute chart. We time trades there and see if the trend is going in the same direction. Nothing more is needed to do on these charts, but you should look at the direction of the trend in one of these time frames. I mentioned that somewhere on the forexfactory forum, or in the faq. To find out where the trend is going in the 30/60 minute chart you may draw simple trendlines.
This rule is one of the most basic rules in forex. Whatever timeframe you are trading, you must go up 2 or 3 timeframes to see if the signals confirm each other. So if you’re trading the 5 minute chart you look at the 30/60 minute chart. If you’re trading the 15 minute chart you look at 1 hour or 4 hour frame and so on…
February 7th, 2008 at 4:45 am
Thank you for the reply.
I agree the longer times should be checked to establish what the long term trend is, which had been part of my strategy before, though when reading your faq I could not find this.
Could you advice how the Pivot and support and resistance lines would be affected when using this system where the time zone is GMT +9?
February 7th, 2008 at 9:27 am
thx for ur great system, iam testing it more than months and give really good results
iam asking about the timeframe u use ?
are u using the 5 min and 15 , 30 min tf in trading this system ?
and what do u recommended timeframe ?
thx
February 8th, 2008 at 7:12 am
hi thank for your system however i need some help in setting up the indicators my only shows macd i dont know where are all the other indicators such as a) Signal Arrows
b) MACD
c) Volatility Channel
d) Laguerre
e) Slope Direction line
f) Pivot Points
g) Guppy Multiple Moving Averages (GMMA) can you please tell me what to do i am new to this and i am using mt4
February 27th, 2008 at 6:13 am
Hi, nice work
The Slope Direction Line:
do you have a general formula ?
I cant grasp this mq4 language, want to translate it in ProRealTime easy language. Will repost if done so.
March 3rd, 2008 at 2:57 pm
Hi
Concerning my previous Q: about Slope Direction Line:
Is this the one ?
(2 * WeightedAverage[period/2](close)) - WeightedAverage[period](close)
Is that correct?
(Try Wilders Average for a change!)
Could you reply on the preferred period please?
Dutchy
March 6th, 2008 at 11:55 pm
Hi, I don’t have the means to look at the formula right now and I don’t know it from the back of my head.
Why don’t you download metatrader and see at the formula yourself?
Or you can ask the question in the forex factory thread:
http://www.forexfactory.com/showthread.php?t=40325
Best,
Urban.
March 14th, 2008 at 8:31 pm
hi, i want to try this system for doing some backtesting but i’m having problems with laguerre indicator. i know you can install them directly by downloading them but i don’t use MT4 for my trading. can anybody tell me its formula or where can i find how is it calculated? thanks.. !
March 16th, 2008 at 11:16 pm
I suggest that you download Metatrader and use it to monitor signals and time trades.
Then you use your second platform to execute the trades.
This is the BEST solution!
March 18th, 2008 at 12:17 pm
I have tried this system few weeks and found that even in 5 min timeframe I should wait long time, especially waiting the color to change, other thing is I have to wait Slop direction line to cross EMA34 High & Low to get better setup. But overall this system is good for me. Do you face the same thing like me?
March 21st, 2008 at 4:47 am
hi,
thank you so much for your system.
you will be rewarded (spiritually speaking) for your generosity.
I read all the thread on forex factory.
I will try it with small trades (in term of money) for a month.
thank you again.
laurent vongkasem
March 25th, 2008 at 4:33 am
Hi,
Thanks for sharing its great!
lets pips be with you
March 26th, 2008 at 11:01 am
Pilatus!
The Wicker. I love this system because it gives a simple and clear signal to enter a trade. I am following thread on FXFactory from the beginning. Problem is that my demo account is not growing much. I know that problem is in my trading decision. I want to say that this system produces at least 10 good signals per day, but I have a problem to select which signals NOT to take into consideration. I would be happy if I enter a trade once or twice a week but I do not know to choose “right” signal. Can you help with suggestion please??
March 26th, 2008 at 4:42 pm
Thank you so much for giving us your system It is the most profitable and reliable I have found on these forums
March 26th, 2008 at 11:55 pm
Pilatus, slowly read the posts in the forum, we have covered which are the perfect signals. It’s not that easy to spot them as you are just starting. Practice and practice and through time seeing perfect signals will be like second nature to you.
April 7th, 2008 at 6:49 pm
Hi Johnson,
I just visited your blog on unplanned. I’m from indonesia, so sorry for my english written. I’ve just downloaded your system and would like to try it in LiteForex. 2 months ago i’ve lost some money cause lack of experience, and i would like to recover it, may your system reduce my faults and be a guidance for me before deciding open trade.
thanks for your free system.
April 13th, 2008 at 4:36 pm
hello mr the wicker ,,, im using ur system for long time ,,, but still not sure about the best trades and signals…
are they when :-
** when the guppy is so contracted
and the price does not move much before the signal and the signal with direction of 1 hour frame trend ,,, ???
really want to know ur opinion , thx
April 13th, 2008 at 10:38 pm
Yes, the best signal would be when the guppy is relatively contracted and there is not a lot of movement happening (not volatile). You also need to check higher time frames to see what is happening. Ex. if you are trading the 5min check the 60 minute chart to see if your current 5minute signal is not going against a major trend in the 60 minute chart.
April 14th, 2008 at 5:22 am
Men, i really admire ur prfeesionalism and applaud ur archivement.
I’m having problem downloading d system on MT4, pls describe the procedure for attaching it to my MT4.
THANKS
April 14th, 2008 at 6:59 am
Your question is already answered in the trend follower FAQ.
http://www.bustathief.com/2007/08/trend-follower-faq.html
April 29th, 2008 at 7:14 pm
Hi Mr. JohnSON,
Thank u for taking the time. Maybe I am not seeing it, but where can we download the indicator package from. Thank you.
April 29th, 2008 at 8:38 pm
Hi,
I have not been able to find the link for the template download. The link above the comment section at the bottom of the page takes u back to the manual. I would appreciate it if u can please post the comment. Thank u.
April 29th, 2008 at 10:06 pm
The download is in the SUMMARY section. Above the recommended link to “bird watching in lions country” book. Here it is again:
http://www.mediafire.com/?clnotbx1xmb
June 16th, 2008 at 2:16 am
Hallo,
have someone, some live pips with this?
August 10th, 2008 at 1:29 am
John S0N
I must hand it to you, you are a living legend! Thank you for sharing your system with the rest of us. Just a question, how did you come up with the idea of integrating the different indicators in this system?
*All about the pippage*
August 10th, 2008 at 1:40 am
Thanks for your feedback nsu, I think I already answered that question above in the comments somewhere, please do take a look
August 17th, 2008 at 2:14 pm
Thanks for sharing this. I’ve downloaded your indicators, but i get different colours to the charts above. Bit confused on the rules now.
August 17th, 2008 at 10:36 pm
You have to apply the template to the chart, otherwise you won’t see proper colors and some indicators as well.
August 18th, 2008 at 1:40 pm
Couldn’t find the template , so i applied the indicators one by one and saved a new template. Yhe colours i have are :-
1. Purple - long-term
2. Red
3. Green
4. Blue
5. Gold - short-term
Doesn’t match the charts further up.
August 18th, 2008 at 5:33 pm
thank you very much for share the system is very good
August 18th, 2008 at 10:59 pm
You have to apply the template that is in the .zip package. Without it you won’t have some other indicators…
August 19th, 2008 at 1:33 pm
just wanted to let u know, thankx for sharing ur trade strad has improved my strad 100 % relly thanx
August 20th, 2008 at 4:17 am
Hi there,
Am just going through the set up and cannot add the volatility lines in MT4 as the MAs do not give the option of using the EMA high or low (unless I’m missing something obvious). Does anyone have any ideas?
I’ll post more comments, if that’s what people do here, to let you know how the trading goes-demo account only at the moment.
Thanks and happy trading,
Ted
August 20th, 2008 at 10:18 am
Ted, if you apply the template provided in the zip package everything will be setup automatically, just the way its supposed to be.
August 23rd, 2008 at 12:56 pm
Thank you for sharing.
Hi,
Could you please email the file to me at valuuttakauppa.lahtinen@gmail.com,I continuously get “session error” messages and am unable to get the file?
Regards
Tapio Lahtinen
August 24th, 2008 at 2:45 am
Hi, got everything working thanks. Great system
Could you tell me what the dashed support & resistance lines are ?