Forex Profit Monster - 4H TF

Maybe a lesson learnt? Cable has dropped massively and I chose to ignore closing the trade out at a level of resistance (which was 1.6016 and would have given me 33 pips) Not bad. I'm now 25 pips down. I left the trade to wait for the exit signals (small white arrow in the opposite direction of my trade or when the fast trend moves below 0) Peaked at 1.6070, been down ever since. I think with any system it's also good to have a take profit amount set. I was up 87 pips at one point so I should definitely have exited before then at some point.
 
As I thought, the small downwards white arrow just appeared, close your position. Made a loss, 26 pips. Will start to concentrate on the fast trend lines instead of the white arrows. Might miss a few long run winners this way but at least it will secure profits. Or maybe incorporate a trailing stop loss
 
What I plan to do today is to backtest every short/long cable signal over the last 6 months and then compare the 3 different exit methods to see which strategy faired better on average...
 
I've decided to scrap the hourly charts, too many false breakouts. After some analysis 4 hourly charts look much more consistent
 
Good stuff. Need more people to add input too, let's make this a team thing. There are too many forum voyeurs around, happy to read ideas, test out other peoples' strategies and whatnot without really contributing anything (this isn't a dig at you jwhite)

I can backtest a few currency pairings on 4H charts, would be great if someone else could do some of the other currencies? It's such a laborious process (well, the way I'm doing it is, extremely manual but I bet some excel whizkid could knock it out in a matter of minutes)

Anyone else got the system and want to help out?
 
Can't help actively at the moment - got too much else on but according to the author, choose one exit method and stick with it. To be honest though, the white exit arrows come way too late for my liking so wouldn't use that method. USE ONLY IN RANGING TIMES. In a trend, Fast Trend cross is more suitable.
But... we never know what's round the corner and changing back & forth is perhaps not the best way.
As I am not entering into trades at the moment (any, not just FPM!) I cannot take this further personally but if I did, I'd make the aforementioned trade (that resulted in a small loss) a case study and ask, say, the author, what he would do? The S&R lines are exemplary in this system but I believe the author (Jim) doesn't use these to exit (though I have used these to set Take Profit targets). Perhaps then, it's a case of winning some pips then splitting your trade, moving the SL to a break-even position and halving the trade to continue but with no serious consequences if it goes tits up as a profit has been made. Money management and alternative tactics? Glad to see someone doing this again!!!
 
You need to get used to the way FPM works too and the way you trade. The other thing is that for example news doesn't really affect things too much when trading higher time-frames anyway. I'd avoid the first half of Monday (GMT) and second half of Friday though, and perhaps the first Friday of the month altogether (what with the US non-farm payroll)
 
fxtrader85 said:
Good stuff. Need more people to add input too, let's make this a team thing. There are too many forum voyeurs around, happy to read ideas, test out other peoples' strategies and whatnot without really contributing anything (this isn't a dig at you jwhite)

I can backtest a few currency pairings on 4H charts, would be great if someone else could do some of the other currencies? It's such a laborious process (well, the way I'm doing it is, extremely manual but I bet some excel whizkid could knock it out in a matter of minutes)

Anyone else got the system and want to help out?
Click to expand...

Good to see the thread running again, I've been using FPM for a few months on demo, mainly on the 1H with mixed results, if you can sit with it its reasonably profitable especially if you can get into the trade at the start, I would not use the reversal arrows to exit the trade though, I have been using the S&R lines for the initial TP but if I am sitting with it & it breaks the S&R I remove the TP & trail it with a close SL.
 
That's it. I think moving the stop so you don't lose out overall is sensible. I back-tested this extensively last year and the S&R lines (and corresponding zones) were excellent areas for profit taking and I believe, remain so.
 
In fact, I'd be happy with half of what Jim earns every month out of this - a couple of losing months a year are to be expected anyway.
 
wow what a day. Once again faced withthe dilemma of profits in hand, moving stops up to break even. Hate giving back profits and still struggling with tp at spt res fast trend or arrow. I havent been using spt res for 2 months as I believe thats how Jim does it, and I dont have time to back test which way is best in the long run. I think a ranging mkt would be better for spt res but how do you know when a ranging mkt is gonna stop ranging, and then you miss a big trend
 
That's the problem - one NEVER knows. Jim suggests choosing one method and sticking with it, otherwise you'll lose in the long run. The key reference too is the way the turtles traded - and one of their little tricks was to use Donchian channels to exit and that's what I with a colleague are seriously looking into and testing. And there's another system I'm looking into to (as soon as I get the time!) called ATM-FX (by Keith Cotterill) which uses Parabolic SAR to exit - that might be a an idea.
 
I will report some findings either later on today or tomorrow...I was using excel and out of the blue all of the buttons greyed out and I couldn't use anything! I've got it working now so I will have some information for everyone to digest
 
fxtrader sounds good. I am encouraged that this system is finally getting some action. I have been taking 4 hr signals by the book and closing at white arrow or fast trend crossing but not at resistance or spt. Wish I had the time to go back and test a valid enough number of signals, say a coupe years, to see but with 2 kids a sick wife a regular job and 28 inches of snow to shovel (Annapolis Maryland) I am tied up at the moment
 
Hi Guys

I want to say thank You to Ingot54 and all the others posting here for motivating me to go back and take a look at this system.

Attached is a partial 2009 backtest of FPM daily signals. It's partial because I did not test all pairs, I didn't test the GBPJPY. I have been burned by that pair before and won't trade it as a personal preference...

I should note that I really do not believe in backtesting but in theory trading this system 100% mechanically should be an easy test. On the Discretionary or close at resistance trades this test should be considered close but not perfect for obvious reasons.

I think that FDM is a great system and the owner definitely is a great guy and seems genuinely honest. If you have the time to trade the 4 hours as he does and can stomach the draw downs then you'll do just fine and win in the end!

Some points to consider:
1) I tested on my IBFX live account which has a Sunday bar and could skew the results.
2) Resistance was determined by using the attached Support and Resistance indicator. I drew lines at important levels before the trade and normally took profits at Res., OOOO or Psych.levels
3) I skipped a few very obvious bad signals (Discretionary trades only) where a signal came due to a very large candle, most likely caused by news....
4) I removed the indicators that I didn't feel are important to the dailly trades. Pic attached
5) Human error. I probably made some mistakes, I hate doing this and it took a long time!
6) For dis. Trades I used the most recent swing or S/R line for my SL. I eyeballed the stops for mechanical trades and used arrows or fast trend to exit. I saw no huge stop out on these mech. Trades, the indicators work as the author says.


I think that the most important thing that was learned is the great win rate of taking the signals when the Fast and Slow trends match! 90% win rate when manually closed! I don't believe in magic indicators but these are definitely pretty darn good!

I will trade this on the daily charts using targets for my exits and trailing my stops up to BE.

I hope that this helps and although I don't have a lot of free time I will try and contribute when I can.

See Ya!
 

Attachments

  • Daily Trades Back Test 08 Feb.xls
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  • FPM.gif
    FPM.gif
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  • Support_and_Resistance.mq4
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Thanks very much for your post DL66 - it's good to see new people joining and contributing. I hope to return to forex (and FPM) sooner rather than later as it was the only system that I never lost money on. I agree with the GBP/JPY pair too- I call it the executioner though some people no doubt live off it!!
My intention is also to add a couple of bits and pieces in the near future, post them here in order to see if we can find a better and more efficient way to exit trades, regardless of time frame or hour of the day. I'm extremely keen to know how other members fare with a couple of ideas and techniques we're tuning. Have a good day everyone:)
 
DL66. Thanks for your hard work. Curious what program to open ur spt res file, cant open it. ALso I assume therefore you dont use the spt res that comes with fpm? And if not why not? One last question, have you traded 4 hr or just the daily? Thanks alot, I am considering trading the spt res vice ft or arrow on the 4 hr.
 
Cheers DL66, I had a brief look at your analysis and it looks very thorough. I was testing GBP/USD and EUR/USD.

From Aug 09 - Jan 10, a total of 18 trades were taken using 4HR signals on Cable. In that period, there were only 4 loosing trades. My exit strategies varied from the white arrows, to my own judgement and to S/R levels. 3 of these losses could have been profitable if a trailing SL was used (so one loosing trade out of 18 is pretty good going!)

I wanted to initially backtest EVERY single entry with all the different exit strategies and then compare, but 1. this would just take too long and 2. I think it's best to use the exit strategy that best fits that particular trade...

I noticed that the Fast trend indicator usually seems to be about to reverse a few candles before a white arrow that signals an exit, so sometimes using this as an indicator can preserve more profits.

I will try to make my findings a bit more user friendly then upload so you can see

dave, the s/r file is an indicator extension for metatrader. Put the file in your expert/indicators folder and then locate from within the program
 
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