Hey David,

Yup, that is where Walter mentioned he got it from. Appreciate the thoughts on how you trade it. No one mentioned trading this strategy consistently except for Adam, who has some great notes about how he trades it above.

Thanks,
Hugh

Actually this strategy has been mention in Dr Alexander Elder book known as the kangaroo tail as well as with Walter Peter’s naked forex book. However the first caution about taking losses after price starts eating 50% of the tail so I believe placing stops 5 pips below the tail is too much of a risk.

As for me, I love to trade this of GU and GJ as their volatility are very high and normally if I see this of the 4 hr I would scroll down to the 15 min and place my position of the previous high or low to avoid getting whiplash. And let price takes my position. Of course if the trend is strong that the stop hunts start coming in and my position will get compromised.

But overall one of your interviewees has this strategy mention and it was his consistent winner??

All the best.
David

Ahhh, I see. Yeah, that is a second level review and would become more apparent in forward testing. With Daily charts though, it wouldn’t matter as much.

I hear ya…coming soon.

Hey Hugh,

What I was getting at there, is do the signals/entries occur when you’re awake (ie: dependant on your timezone).

I’ve recently been through the ringer with back-testing, I think we should start a support group for fellow back-testers!

Thanks Andrew, not too sure what you mean…but I did forget to post the spreadsheet when you read it, but it is posted now. It will show when the setups happened. Also, when you double click the trades in Forex Tester, it will take you to where the trade occurred on the chart.

Yeah, trading on the daily chart doesn’t really generate enough trades to make it a real income generator, but the idea could be carried down to the 4 hour or 1 hour charts (see Adam’s comment) and might work just as well.

Hugh

Hey Adam,

Very cool, thanks for the tips! Yeah, since trading on the daily chart didn’t yield too many trades, going down to the 4 hour chart would be a great next test.

Interesting that you bring up Elliot Wave. I’ve never really put too much thought into it but I could see where going for the 3rd wave would be a lot safer than waiting around for the 5th. Yet another thing to test…

Cheers,
Hugh

Good point Micah, thanks for the tip. I’ve seen differences between platforms such as Metatrader and TradeInterceptor.

Still nice to see you’ve put in the work to test.

Some nice testing there mate, and I can confirm that in the wild this method works well also, as I have traded something along the same lines off hourlies and 4H charts for over 7 years. Never my sole method, but a part of the arsenal certainly.

My main difference is I trade it in both directions, and I aim beyond the previous pivot as a target. I apply basic wave theory here, working off the theory that if price has pivoted off a pin bar, it will at least make a 3 wave move, with the 3rd, being the impulse, pushing it through the previous pivot, running some stops and adding a little icing to what is already a tasty cake.

At time it turns a winner into a break even or small gain, but others that impulse can go like the clappers as well. I believe it gives reduced win/loss for greater profits, but I really should run some tests on it again.

I an a long long long way from being elliot wave guy, all those rules just seem like complications for an already complicated profession, but the basic 3 wave theory holds most of the time.

Happy trading
Adam (@IamAdamJowett)

The New York close may/may not be the best time for the AUD/JPY but it has worked very well for me.