FirePips Journal + Free Forex Signals

[FirePips]

I've been trading for more than 5 years and what I've experienced is that any indicator based system eventually fails. All technical indicators lags, which means that when it gives you a buy signals , the major players (Bank and Institutional Traders) are already in that trade. By the time you or other retail traders enter that trade it is already too late and Bank traders already start to liquidate their positions. Money from your account flows right into their account and you end up cursing the market for cheating you out of that trade.

So how come these Bank traders get in early. Well first of all they don't use indicators for trade signals. They use Price Action based systems which simply rely on price movements. Second they get internal reports on where retail traders are sitting and where they have their Stop Loss and Take Profit set up. Hence they are able to get in first and by the time retail trades get in they are ready to get out and take your money away. They do this day in and day out and make tons of money for banks and hedge funds.

You may then ask how all the popular websites and broker's internal studies consist of indicators like MACD, RSI, Moving Averages etc. The way a retail trader would look at it is to how these indicators would help generating new signals but the way professional traders use them is different. They use these indicators to confirm their entries for trades that they already in. This again puts them in front and retail traders keep thinking why market reverses as soon they enter a trade.

To put this into perspective let me give you an example. Lets say you use RSI and noticed that GBP/USD has reached oversold area in your preferred time frame and you start to look for long trade. But as you all know that a pair can stay in oversold or overbought area for a period of time, so you decide to wait until it starts to go up. Price then starts to rally but at this stage you may think about another indicator, say MACD, to tell you if the price will keep going up. As price rally even further you still wait for the MACD to cross above 0 and then enter long trade.When you bought GBP/USD guess who sold it to you, the Bank traders who were pushing the prices up in the first place. After getting stopped out for few times you may think that you need a filter and that may help you from entering such trades. So you add Moving Averages and wait for their crossover, entering even further late into the rally. You may as well flip the coin and it would have similar probability of a profitable trade.

Your Indicator based system would only work if majority of the market participants are looking at the same indicators with same settings and same time frame. Remember that indicators don't predict prices, they only tell you what has already happened. How can you then rely on any indicator to enter trades?

Next thing you may ask is do I know all this. Well I never worked for Bank or a Hedge Fund. But what I've done is to study the Price Action for years for more than 12 hours a day. This gave me an understanding of how price moves and when to expect certain movements that are incredibly profitable. On the top I've read more than 110 books on Technical and Fundamental Analysis and Trading Psychology.

The way I trade is by letting the price tell me what it wants to do. On the days when market is moving sideways I stay out. When it start to trend in either direction of longer trend on against it, I look for trades and enter in that direction. I wait for price to tell me which direction it wants to go then wait for pullback to take place. I can pinpoint where the price would pull back to and then enter my trades there. Ever heard of "Buy on Dips and Sell on Rallies"? Well the old cliché is true.

Last week I took 26 trades out of which 20 were winners, a winning percentage of 77%. Total 741 pips in one week. I challenge you to find any indicator based system to match such profits.

I've done this for a while now and now ready to share these signals with other trades. You may ask why? Well let me be upfront and explain why I am doing this. My goal is start a hedge fund in 7-10 years from now and giving my signals away for free would help me make friends and develop relationships with other traders. Forums are a great place to meet like minded people and I would be delighted to share my experience with others and also learn something in return.

I'll start sending signals from Mon next week. I'll post more on how to use the signals and what Money Management to follow.

And lastly, I would appreciate all your comments and suggestions.

[FirePips]

Overview:

Each day signals are generated between 6PM to 8AM EST ( 8AM to 10PM AEST, 7AM to 9PM JST, 10PM to 12PM GMT) It may vary slightly during daylight saving time. On FXDD charting platform it would be 0000 to 1500. Read here to understand why we use FXDD charts.

This includes complete Asian an European Session and few hours into US session. From my experience I've noticed that market would trend in one direction during these hours and would likely to reverse after that. Our goal is to catch trending market and hence later hours of US session are not very ideal.

The pairs we will trade are GBP/USD, EUR/USD ,AUDUSD, USD/CHF, USD/JPY, AUD/JPY, CHF/JPY


Signal Description:

The signals will consist of Order ID, Entry Point, Stop Loss and Take Profit Level 1 and Level 2. Updates would be send out if the order is filled and if it hits Stop Loss or Take Profit. I will update blog at the end of the our trading day with the summary of trades. To receive timely updates I would suggest using Twitter.

Some orders may not get filled in time and those orders would need to be canceled. I'll send updates to keep you informed. Open trades at the end of the our trading day would be managed on per trade basis and I'll send update for those as well.

Stop Loss and Take Profit levels include spreads already. I'll assume 2 Pips spreads for GBP/USD, EUR/USD, AUD/USD, USD/CHF, USD/JPY and 3 pips for AUD/JPY and CHF/JPY. If your broker has higher spread then you would need to add the difference. See the example below.

Each signal would consist of two Take Profit Levels. Once the Level 1 has been reached we would then move the Stop Loss close to Break Even point. We leave a margin of two pips so that we don't get stopped out due to a sudden pullback. See example below. For sake of consistent record keeping we will use Bid price from FXDD platform.

Money Management:

For each trade risk not more than 1% of your account equity. The easiest way to find out how many lots you can trade is by dividing your account equity by 0.01. Divide that number by pips of Stop Loss.

Further to be very accurate divide the resulting number with the Pip Cost. This will give you the exact number of lots that you can trade.

Most brokers would list Pip Cost on their trading platform. A Pip Cost is different from general assumption that 1pip=$10 on a standard account. These days it is between $11 to $14. It is quite important if you are trading with large account.


Example:

Lets say there is a Sell signal on EUR/USD. Signal would look like this:

Order ID: 1
Entry: EUR/USD Sell 1.4100
Stop Loss: 1.4150
Take Profit 1: 1.4050
Take Profit 2: 1.4010

When placing trade divide the total lots (derived from Money Management section above) by 2. Set the same Stop Loss initially for both and different Take Profit levels. If the Order gets filled and reaches Take Profit 1 we need to move Stop Loss for second half of the position. In example above once the price reaches 1.4050 we then move the Stop Loss to 1.4104 ( 2 pips for safety margin and 2 pips for spreads).


Remember to add more pips if you broker has higher spread. Say your broker has 3 pips spread then your initial stop loss would be 1.4151. After the Take Profit 1 is reached your Stop Loss would move to 1.4105. Same goes for Take Profit level. Take Profit 1 would then become 1.4051 and Take Profit 2 to 1.4011. Remember that I've already added 2 Pips for spread at the time of sending the signal.

In case of a Buy order only the Entry price needs to be modified if your broker has higher spreads. So if the order is to Buy at 1.4100 then you buy at 1.4101. There is no need to modify Stop Loss or Take Profit levels.

Updates:

Regardless of Order gets filled or not I'll send an update to let everyone know. There would be regular updates via Twitter as we go along the trading day. Updates would look like this:

->Order ID: 1 Filled at Entry.
->Order ID: 1 Reached Take Profit Level 1. Move Stop Loss to 1.4104
->Order ID: 1 Reached Take Profit Level 2.
->Order ID: 1 No Fill - Cancel.
->Summary 07/14: 90 Pips Profit.


That’s all there is to it. Lets get started.

[forexboy]

Okay I'm ready, so where's the signal?

[FirePips]

Hello Everyone,

We had a great start yesterday on our first day of signal service. We took 2 trades early in the Asian session, AUD/USD Long and USD/CHF Short. They resulted in total of +121 Pips.

I'll update my blog as we go along with more detailed reports, so feel free to check it over there. To receive the signals in real time I recommend using Twitter or Facebook. You can search me there under "FirePips".

Talk to you soon.

Regards
FirePips

[FirePips]

Originally Posted by forexboy

Okay I'm ready, so where's the signal?

To receive the signals in real time I recommend using Twitter or Facebook. You can search me there under "FirePips".

[forexboy]

Okay thanks.

[peterngkl@gmail.com]

Dear Sir,

May i know how to download your indicator?
Rgds

[herry_fxhope]

Thank you about your information and if any new information pls write again

[FirePips]

Hello Everyone !

Free Forex Signals are back. That’s right, I've decided to provide the signals again. My previous signals though successful, had higher overhead in terms of trade management. Previous signals required a lot more screen time and frequent updates which took a big chunk of my time.

After months of research and back testing I was able to use the same previously successful method and apply it to higher time frames. Now instead of using 5 or 15 Mins charts I use 4hr charts which helps me to cut down screen time and less trade management.

These signals are as usual based on price action only and no indicators are used. As far my internet research goes no one else has published such method yet. I am happy to be corrected if found otherwise. At this stage I'll only provide signals as they happen but refrain from discussing exact methodology. I've been using this system for a while now and it works great with all major pairs.

The idea behind these Forex signals is simple, we look at the price in relation to weekly and monthly price movement. We then wait for price to start trending in the same direction. Each trade is open with multiple of 3 lots. For example it could be 3 Mini, 9 Mini, 6 Micro, 3 Standard etc, any trade size in multiple of 3. It would depend on your money management as to what size you should trade. Read more on Money Management.

Profit Target and Stop Loss are all based on price action and would vary from trade to trade. Most trades would have Risk to Reward ratio of 1:1 or better but at time it could vary.

These Forex Signals would be posted as usual on Twitter and Facebook. I'll also update blog, so it is a good idea to subscribe to email alerts. If you haven't already done so then you can do it Here. In the future I may introduce SMS alerts as well.

Happy Trading.

[FirePips]

We had another excellent day today. Our CADJPY signal reached the full +120 pips target(total 240 Pips), EURJPY trade reached second profit target at +100(total 150 Pips), GBPJPY trade got +70, GBPUSD +50 and EURUSD +40.

You can see trade details at Free Forex Signals