Best Thread The 3 Duck's Trading System

[princepawn]

Eurusd looks like good setup for short this afternoon, I'm just confused with the entering point.

Yes here is a screenshot. If you look at the M5 chart, It caught the entry and bounced back up. But yes, a short is it:

 

[peeterwoolf]

AUDJPY looks good, I'm short on this pair.

 

[robdel]

folks, getting back to my earlier question but relevant to pricepawns post....

The 3 Duck I first read on babypips states "We are now on the 5 min chart and we are looking to sell when price crosses below the 60 sma. For extra confirmation we should let prices break the last low on the 5 min chart."

This would suggest as per pricepawns post we would have a sell around 135425 on the price crossing the 60 ema.

However the 3 Duck pdf states "What you are looking for on the 5 min chart is for the current price to move above a high, price should also be above the sma when it does move above that high."

Therefore according to pricepawns post we wouldn't be looking to sell till 135395.

So which is it ?

I am thinking its 135395 - below the sma and breaking a recent low - am I wrong ?

 

[princepawn]

AUDJPY looks good, I'm short on this pair.

It did look good briefly there, but is back up above the M5 SMA.

Did you get a 10-20 pip gain on this? How are you doing overall with this?

 

[princepawn]

So which is it ?

It's both. The thing is, the PDF discusses things in terms of the H4 and H1 indicating and confirming a long trade, thus when you use the M5 chart, you are looking for the price to go higher.

Me, and presumably the babypips thread, were discussing things when the H4 and H1 charts indicated and confirmed a short trade, thus on the M5 chart, you are looking for the price to go lower.

 

[princepawn]

Here we see an example where H4 and H1 are showing short but the M5 is not. Because it is a short, we are looking for the lowest price for a breakthrough, not the highest, so which of the arrows should be use as criteria?

 

[robdel]

Me, and presumably the babypips thread, were discussing things when the H4 and H1 charts indicated and confirmed a short trade, thus on the M5 chart, you are looking for the price to go lower.

Yes, I understand that one is for a long trade and the other for a short, it still doesn't answer if the buy signal on the M5 is the cross of the MA or the break beyond the recent high and conversely if the sell is the the cross of the MA or the break beyond the recent low.

Assuming the 2 other ducks are lined up.

I do hope I am making my confusion clear !!

 

[Adecco]

folks, getting back to my earlier question but relevant to pricepawns post....

The 3 Duck I first read on babypips states "We are now on the 5 min chart and we are looking to sell when price crosses below the 60 sma. For extra confirmation we should let prices break the last low on the 5 min chart."

This would suggest as per pricepawns post we would have a sell around 135425 on the price crossing the 60 ema.

However the 3 Duck pdf states "What you are looking for on the 5 min chart is for the current price to move above a high, price should also be above the sma when it does move above that high."

Therefore according to pricepawns post we wouldn't be looking to sell till 135395.

So which is it ?

I am thinking its 135395 - below the sma and breaking a recent low - am I wrong ?

I'm not familiar with what is said on that thread.
But essentially :

When going long:

Price is above the 60 period SMA on ALL 3 timeframes. (and ideally the bigger slope on the 4hr SMA the better)

And the reverse applies for shorts (i..e must be below all 3 time frames)

For EURUSD...as i type....the 4hr slope is pointing downwards and price is also below the sma.
BUT the price is above the SMA on the 1hr sma.

However - there is a bit of resistance in a short move a few bars ago on the 1 hour chart at 13541. (where it would in fact be beneath the 1 hour sma at that point)
SO you could feasibly take a selling position a few pips beneath this.

Personally id be careful about your exit position. There's resistance at the 1.3512 mark on the daily chart (2 failed attempts).
And further resistance at the 1.35000 (It failed to break through in the past - and this is also quite a round number)

It may be advisable to hang on until next week when it may break through the 1.3500 mark - you could then jump in after that.

 

[princepawn]

Yes, I understand that one is for a long trade and the other for a short, it still doesn't answer if the buy signal is the cross of the MA or the break beyond the recent high/low (depending on if its a buy or sell ) on the M5.

I do hope I am making my confusion clear !!

It's the break beyond the recent high/low on the M5 AND it should be above the SMA. There is a serious grammar error in Step 3 in the PDF, but I will post verbatim and you will see that both criteria must be met:

What you are looking for on the 5 min chart is for the current price to move above a high, price should also be above the sma when it does move above that high. At that point (on a break of the high) all your 3 Ducks have lined up and you could be buying above the high.

 

[Captain Currency]

Greetings Duck Hunters,

This might help, sometimes seeing it rather than reading about it can make a difference :idea:

 

[qwertyuiop1]

I firmly believe I largely get the whole 3 ducks concept. But can someone answer me one thing please ?

The entry point can be in a breakout in either 5 min chart or else 1 hour chart.
But it's fair to say the 5 min chart is generally encouraged more.

In the overall scheme of things the 5 minute chart seems such a small timeframe in comparison the the 4 hour - I find it difficult to understand how much relevance it can really have over a 24-48 hour trading cycle.

I understand that it's discretionary - and thAt people use 1 hr chart as entry also.
And I also understand that any decent trend has to begin with a breakout on a smaller timeframe chart first.
But why is there that seemingly extra emphasis in using the tiny little 5 min chart as an entry point ?

I'd love if someone could try to build my confidence/understanding on this part of the strategy.

Thanks

 

[princepawn]

Greetings Duck Hunters,

This might help, sometimes seeing it rather than reading about it can make a difference :idea:

Hi Captain Currency,

1 - the PDF manual has a grammatical mistake when describing the high. There are two sentences joined by a comma. It says "What you are looking for on the 5 min chart is for the current price to move above a high, price should also be above the sma when it does move above that high."

2 - why do you use candle charts? Do you use the high or the close of the candle to determine the the high mark?

3 - I think the algorithmic description of how to find the high is: (1) move rightwards to the first candle that is higher than the newest candle and higher than the current SMA. The one vague part of this description is the term 'higher' because it is not clear whether to compare the candidate candles high or close with the SMA.

4 - In the picture below are 3 arrows, all of them are to the right of the newest candle and all of them are higher. Why would one be chosen over any other as "the high"

 

[csc2009]

Good Q&A, really helps.

 

[peeterwoolf]

I didn't know 3 duck also were introduced on babypips, are they the same system?

 

[robdel]

yes, same system, same author
click here

 

[neil]

Just me and a Computor

I firmly believe I largely get the whole 3 ducks concept. But can someone answer me one thing please ?

The entry point can be in a breakout in either 5 min chart or else 1 hour chart.
But it's fair to say the 5 min chart is generally encouraged more.

In the overall scheme of things the 5 minute chart seems such a small timeframe in comparison the the 4 hour - I find it difficult to understand how much relevance it can really have over a 24-48 hour trading cycle.

I understand that it's discretionary - and thAt people use 1 hr chart as entry also.
And I also understand that any decent trend has to begin with a breakout on a smaller timeframe chart first.
But why is there that seemingly extra emphasis in using the tiny little 5 min chart as an entry point ?

I'd love if someone could try to build my confidence/understanding on this part of the strategy.

Thanks

If the two larger time frames are short/long (meaning they are above/below ma) then you watch the 5min to trade in direction of higher time frames - in other words you go with the the flow. Example: if the two higher time frames are long then the odds are (no certainties here you notice) that long trades on the 5 minute time frame are more likely to work than trying to trade short against the momentum of the two higher time frames.
You will not win every time but it's better than blundering around in the dark.
Finally, the Captains approach to trading is to watch and wait until the odds tip into your favour. Therefore your psychological make up (can you sit and wait without trading to relieve boredom?) is critical-it is more important than your chosen method/approach to trading -but that's just my opinion.
Note:
Bottoms -I was going to stay away from T2W but here I am poking my oar in again. Note to self -must try to stay away

 

[Adecco]

If the two larger time frames are short/long (meaning they are above/below ma) then you watch the 5min to trade in direction of higher time frames - in other words you go with the the flow. Example: if the two higher time frames are long then the odds are (no certainties here you notice) that long trades on the 5 minute time frame are more likely to work than trying to trade short against the momentum of the two higher time frames.
You will not win every time but it's better than blundering around in the dark.

Hi Neil

It was me who posted the original query (i have 2 usernames bizarrely which i cannot change depending on which device (phone/laptop) i post with)

Thanks for the reply.

I think you may have misunderstood my query though.

I do understand that the general point is that we are trading with the trend to keep teh probabilities in our favour and using breakouts on a lower timeframe as an entry point (as any trend by definition has to begin with a breakout - although not vice verse obviously)

My query is that the 5 minute chart seems such a low timeframe in comparison to the 4 hour chart (which is the basis of us even entertaining a trade).
The 4 hour chart presumably trends on the back of a couple of days data at least.
The 5 minute chart appears such an insignificant timeframe in comparison.

While i realise the chart to use as an entry is discretionary - I'm just trying to full understand or build my confidence on why the system generally encourages using the 5 minute chart as the entry point (although the 1 hour is also encouraged....but its fair to say to a lesser extent than the 5 minute chart)

E.g. to take it a step further to play devils advocate...why stop at the 5 minute chart to seek an entry point?
Why not instead use the 1 minute chart? (assuming the first 2 ducks are lined up of course and price above SAM on 1 minute chart)

 

[csc2009]

Anyone see any good setup today?

 

[princepawn]

I wrote a Metatrader EA to make using this technique simpler. You can view the documentation and overview in the source code repository. You are also welcome to download it, provided I am not held liable for losses incurred by it's usage.

 

[Adecco]

I wrote a Metatrader EA to make using this technique simpler. You can view the documentation and overview in the source code repository. You are also welcome to download it, provided I am not held liable for losses incurred by it's usage.

Link doesn't seem to work.

What did you write exactly?

You mean you backtested it ? Id be curious to see the results if you did.