The Cornflower Trading System explained

 

This is quite an old system which can still make tons of pips from the markets, especially when we are getting into the high trends period. The main principle of the cornflower trading system is to stick with the trend and all the trades that we open should be in the same direction of the trend. This is a trend trading method.You should set up your charts as follows and it should look like the screenshot below:

Place these 4 EMAs on your chart:

1. 8EMA (yellow,dotted)

2. 12EMA (violet)

3. 24EMA (CORNFLOWER Blue, this is where we get the name )

4. 72EMA (Khaki)

If you do not want to set up the chart manually, you can scroll to the end of this post to download a metatrader template and this should make your task easier. After setting the chart, it should look like this:

We will be working on the hourly chart (H1) and we are going to use these EMAs to gauge the trend and use them to define the trend direction as well as trade entries. So.. now you might ask yourself, why these values (8,12,24 and 72) have been chosen for these EMAs.. Let me write a little on each of them and what they actually stand for..

On the Hourly chart(H1), the 24 EMA will represent the daily trend since 1 day is 24 hours (24 x 1H). The shortest EMA which is the EMA8 is exactly one-third the lenght of the 24EMA and it shows the intra-day velocity and momentum of the market, it shows the 'fast' money. The 12EMA shows the trend of the last half day and this is usually the levels at which price will usually find support or resistance when the is a strong up/down trend. As for the last one, the 72EMA defines the strong and dominant longer term trend. It shows the trend that has established itself and which will re-assert itself several times as traders will be motivated to trade in its direction. The 72EMA is a strong support/resistance level and price will usually bounce around its area, if it is going up, we should never take shorts and the same rule apply for longs.

Several traders can use the system differently from one another reagrading the entries and so on. However, the basic rules of this system is to wait for a pullback, which is the heart of this system to enter into a trade. Once price has gone past the 72EMA, it should normally retrace back and settle itself around the 8EMA and 24EMA area. Once it settle itself on this area, you can enter into the market and place your stop at the recent swing high or low.

So, for a buy setup... you should wait for price to thrust upwards into the 72EMA and then wait for it to retrace back the the 8-24 EMA area and settle itself there. Once it reaches this area, you can open a long and ride the trend. As I say, these are the basic rules of the system and you can tweak it to add your own rules and indicators with it. For instance, you can use a stochastics oscillator and wait for the price to get into oversold level before entering into a long trade. So here is how the long trades should be looking.

As for the short setup, we need to wait for the price to thrust into the 72EMA downwards and we start watching it from there. Once price starts pulling back and retraces to the 8-24 EMA area, you are good to go and you can open a short position. So, the short setups should look similar to this screenshot.

This system is very versatile in the sense that, if you miss an entry, there will always be several more waiting ahead and you can scale in and out of trades as per your liking. The cornflower trading method will provide you with many entries and re-entries similar to the screenshot below.

As for the stoploss, always place your stoploss to the recent swing highs and lows. It is better because it allow your trade to breathe and protect you from getting out from the market too soon. However, as soon as you are into a reasonable amount of pips in profit, you should breakeven your trade and even, close a portion of your trade. It is better to have one bird in the basket that 3 on the tree.

Same as with any trading method, you should take some time to learn it and practice it on a demo account for a while, and as I already said above, you can tweak it as you deem it right. The system as is can be used stand-alone and should be profitable if the proper trader psychology and money management is combined with it. So, go ahead, download your template and good luck.

Files:
 

I Must Say I Really Like Your Trading Systems. Simple And Easy To Use. Plus, You Base Them Mostly On 'leading Signals' And Not Lagging Which Is Something I Appreciate.

 

Could you, please, provide more info (ideas) about "a reasonable amount of pips" - this is very important!

Thank you!

bossxero:
...However, as soon as you are into a reasonable amount of pips in profit, you should breakeven your trade and even, close a portion of your trade...
 
chief2000:
Could you, please, provide more info (ideas) about "a reasonable amount of pips" - this is very important! Thank you!

Amount of pips not too close to your entry so that you can break even... it will depend on the pair... for example for eurchf it can be 10 pips as the pair moves very little and slow, but for gbpusd and other volatile pairs, it can be 25 and over... Use your own judgement to determine this value

 

I wanted to see some numbers, Thank you!

Do you have any statistics (roughly) about how many trades "survived" and how many were closed at Break Even?

bossxero:
Amount of pips not too close to your entry so that you can break even... it will depend on the pair... for example for eurchf it can be 10 pips as the pair moves very little and slow, but for gbpusd and other volatile pairs, it can be 25 and over... Use your own judgement to determine this value
 
chief2000:
I wanted to see some numbers, Thank you! Do you have any statistics (roughly) about how many trades "survived" and how many were closed at Break Even?

No I dont have all these stats bros, you will eventually need to do some homework indeed

Reason: