The River Wild is finally here. So what is the big deal you are asking? How would you like to trade once or twice a month and make 1000 pips, every single month? Imagine sleeping when everyone else is trading and collecting your profits while others toil day to day trying to figure it out. Here you go and by the way, it is nothing new and I didn’t invent it but I know how to trade it.
Setup an envelope based on a four hour chart. Start by setting up an envelope using a 240 SMA based on close with 0.06% deviation. You want to use a currency pair with a good average daily range. I suggest the GBP/JPY and the EUR/JPY. There are extensions set up for profit taking and my favorite LWMA, the 50. Notice the examples I am posting and download the template. Do some back testing and then tell me what you think. I have traded this to the point I am sure it is a winner.
Enter on after the second candle forms outside the River. By waiting until two candles have formed you will almost eliminate the chance of it backing up on you. Use the take profit areas to scale out of the trade. Notice how price clusters on these areas, its tested and based on Fibonacci.
I will be posting more instructions after you have time to digest what is already here. One more thing.
I dedicate this trade to traderlismiss because her incredible insight was the inspiration for this trade. She is a fantastic trader and probably could trade circles around me if she tried.
* There will be a slightly different setup for other pairs.
First trade in January of this year. Click to enlarge.
This is the second cross of the year and it was a short. We have not even mentioned reversals yet.
Sorry, only 650 pips max on this trade. Have I mentioned swap? Did I mention that you get to sleeeeeeeeeeeeep? Notice how price is collecting at my profit points. It is amazing!
I will let you digest this a few days and then come back with some more examples.
River Wild Take Profit?
Thanks for the new method - looks very interesting. Can you explain what and how to use the "take profit areas"? Thank you!
Any chance you could comment on recommended MM and TP strategies. For example, just taking a quick look at the chart I may do the following:
- after say a long entry, my initial SL would be placed on the opposite envelop (I'm assuming it's like the basic river method). Once price has hit the second fib level (288) I'd move my stop to the 144, and continue until finally price retraces and get stopped out.
- after intial long and setup the SL at opposite side of river (same as above) then enter with incremental lots and exit once price hits each fib level.
Looking forward to your MM recommendations (please don't make us wait for a few days )
...and of course to your reversal methods!
Your thoughts on TP and SL are right on the money. You could use either approach in this case and think about taking trades on swings. Use Fibonacci as usual and either get back in or add another position after swing.
I will be posting some charts with fibs on them to illustrate what I am doing.
Mikep had it right. There are a few ways to use take profit and it becomes very important to understand fibonacci. I am a big fan of the basics, and I consider those to be, fibs, trend lines and candlestick recognition.
Taking a stab at guessing reversals...
Hey PT - okay, spent some time looking at the charts and here's my initial thoughts on reversals. This is where your 50 LWMA comes into play.
Let's say we are currently in a long trade, like in your 3rd picture for the GBPJPY, we'd enter on Jan 8th and enjoy the ride north until Jan 24th - it's here where price finally comes down and hits the 50 LWMA. How about waiting for a full candle below the 50 LWMA and entering a reverse position (short) with a SL at the fib wave just above the 50 LWMA at the time of entering (720 level). Assuming the SL is dynamic and moves with price, the SL would increase as price climbed a little more but wouldn't get touched (almost an extra 100 pips to the Jan 30th high from the inital stop set at 239.37 -> 232.17 + 720pips)). Once price it's a lower fib, the SL would follow same the way.
Now for the exit - I'm thinking I'd exit once price comes back into the envelopes. Then we'd wait for a new entry signal.
Anyway - just a thought - looking forward to your rules...
Mike, I have been testing this and trading it for a few months now and you have a good grasp right away. The one thing I know for certain is that price will return to the River. Your observations about the 50 are well thought out and let me give you one more thing to think about. Notice when the price clusters in one spot and the 50 catches up, the next break of the 50 usually shows the new direction or the continuation of the same. One more thing, because this trade is more long term, there is no hurry to try to determine the top or bottom of the move. I suggest waiting several candles before entering a reversal. The use of fibs and candle recognition here are crucial. Also and very important, remember the the swap rate is in your favor on a long with the GBP/JPY and very much against you in a short.