Abonnaci from Bobi Abonacci, best accurate trading system

Hi Guys, I know that you guys heard of Fibonacci most of the time, and properly know more or less how to apply it during your trading career, be it full time or part time.

During my past 3 weeks, i was reading on 2 Technical Analysis books; Fibonacci Analysis from Constance BROWN, published by Bloomberg MARKET ESSENTIALS and Fibonacci Trading from McGRAW-HILL, Finance & Investing. Frankly speaking, the more i read about them, the more i got confuse over my Fibonacci application in trading. I don't mean that they don't work, but they just got me confused.

Last Friday, as usual, i will take a look at the forum in http://www.forexfactory.com on Trading System discussion. Most of the time, i will read and test the neverending list of Trading Systems invented by the developers/owner/original creator. I have not tested every single one of them yet and i am still testing.

But a particular thread and system that caught my attention was this Abonacci System created by Bobi Abonacci, which i believe is from Span, who invented his own system with comphrensive mathematic calculations and is one very distinct System that differentiate itself from all the rest of the Trading Systems.

The differentiation comes from the fact that with Abonacci system calculations, the system can predict the next month Trend for currency pairs, or futures such as OIL, Dow Jones. Most of the systems uses indicator that analyze on past trends, price actions to determine the next buy or sell. Abonacci is different, it treat each month as a new period, where old supports and resistances should not be resuse.

Abonacci has concluded that each pair has a unique frequency and the same calculation cannot be applied for other pair in different month. He introduce a new concept call phases, where it can only be calculated at the end of each month, to determine the phase for next new month. Each phase is constant which is similar to the physics concept of wavelength and is using a fixed fibonacci length 0% to 100%.

I have personally tested Abonacci on my demo account and can confidently claim that it is the best and accurate trading system i have ever use!

What Abonacci has done is a mathematical breakthrough and prove that that Forex can be traded by formulations.

For those who are interested to find out more about Abonacci, you can find Bobi Abonacci sharing his concept, idea and MetaTrader4 template & Monthly Calculator for EURUSD available for anyone to download. Details of Abonacci can be found in the following links.

http://www.forexfactory.com/showthread.php?t=255974

Youtube on how to use Abonnaci MT4 Template

EURUSD False Breakout

Although yesterday the market gave a false breakout, and may think the market may close lower. Think again, the very fact that the market will take into considerations of the human element, which is emotions. "But i thought trading in the market shouldn't be emotional?" Yes! Correct! But remember today is Friday and tomorrow is Saturday. People wants to enjoy their weekend spending in the restaurant, shopping, relaxation and others.

However, the market may give a delay in selling. Perhaps until next Monday? Also take note that if the opening day of the week starts low, tuesday and wednesday normally follows Monday accordingly.

After trading for quite sometimes on paper, i notice that the number of account that i blew are beyond 10 x 3k. Perhaps it is time for me to relook at my rules. I decided to list them down so that when I will take the effort to work on them.

My Forex Trading Rule

1. Max of 0.4 x 3 position. No more than 3 position for averaging.

2. At channel degree, highest or lowest,measure the previous pivot point and buy/sell at that level. DO NOT AVERAGE AT THIS LEVEL. set a stop lost of max 25 pips.

3. Analyse the overall trend first. This is for determine whether the overall position will be long or short.

4. Should I be wrong consecutively for >5 times, Stop trading.

5. For each trading day, if the profit exceed 20%. Consider resting for the day.

6. When trading, be focus. Do not youtube, facebook or surf the forums..... Be discipline!

Learn from mistakes

Mistakes are to be look at, learn and understand why it was made. We need to relook at our thinking processes, system that we use, emotions, environment on what cause such a decision making.

I am having the issue of "trying to spot a reversal" and went into shorting earlier then what the market signals gave. With this thought in mind and seeing the market went higher, I go into my usual routine of accumulating more short positions as the price went higher. However, as i was accumulating, my usable margins left with not much for price movements, causing my positions hit the margin calls. Today the price reversed and went downward, so cause if I say i predict the reversal is coming, "yes" i got it. But i got the timing all wrong.

My mistakes of doing averaging without much usable margin for movement has made my account size reduced by 50% in a few hours. My timing was also wrong.

Anyway, as to give everyone a quick updates on the EURUSD is that the market has closed below the netline but the price action on the next candle did not confirm it. As of now, the trend may be intact.

But you should take note a few things:-

1. RSI divergence is in place. However, the level we are right now is at 60. 60 is the key support level for a downtrend, not a uptrend. It could also implies that the market is doing an accumulation for more downward movements.

2. The bullish engulfing candle occurs after the red candle touches the netline. Which mean that the market doesn't want the price to fall yet. I refer the market as Fed, Banks, Institutional and other Big players. It could also be that they are accumulating short positions before giving an unexpected downward spike.

3. Position accumulating by big players can be around 1.40 to 1.42. This is just my guess.

See my screenshot attached.

EURSUD touching netline on the daily chart

EURUSD touching the netline

For those who are following my blog on the EURUSD, just to highlight that on the daily chart, the candle's current lowest point has hit the netline (3rd lowest candle to the left, counting from the highest point). The netline is a significant point which determine whether the uptrend is intact.

If the candle close above this key level, will mean that the sentiment is still bullish. Otherwise, a close below this key level would mean that that could be a trend reversal.

For those who read my analysis on the Week 42, and started looking for short selling setup, Good Work and keep it up!

For those who did not, do not worry and do not rush! You may have missed a Setup but there are definitely more to come. Stick to the rule. :)

As for myself, i an currently into a long position (as you can see from the chart) with a tight 20 pips stop loss. Should my position goes wrong, i will be placing a opposition position to short sell.

However, as i am typing this, i am already in the +30pips.

My Platform

One of my friend was asking which MT4 Broker that I would recommend. You can check out this website for the list of recommended MT4 Broker in USA and Non-USA. http://www.bestmt4brokers.com/ As for myself, I am personally using FXCM for learning my trade.

Hope you have a great day trading! :)

Staying Discipline, learning from mistakes

As i was intending to write this week blog entry, i recalled my reasons to start a blog site was to capture and detail my journey in Forex trading. There are times when I make consecutive mistakes (In a row of 4 to 5 positions, whether long or short, which went wrong direction or against the trend), and I become emotional abut it or been hard on myself.

At the end of the day, it is really not about how much money you make. It is about learning from the mistake that I made.

Last Friday, I visited the Bookstore and got myself the Rich Dad Poor Dad: Guide to Investing and read it half way through. I personally find it a good book to read and understand if you are serious about getting Rich. As i was reading the part on the 5 type of investors, i notice that been a Retail Trader in Forex or Stocks, we also need to work our ways to become a Qualified Investor, be it Fundamental or Technical. Most of the people (90/10 rule) who lost monies in trading, are a results of lacks in either of the 3Es mentioned in the book;

- Education

- Experience

- Excessive Cash

Alot of times, we entrust our hard-earn cash (blood monies) to the people (fund managers in hedge funds or mutual funds, brokers, etc) we hardly know and believe that they will help us to make money. There are times, we need to learn investment ourselves and make mistakes in order to gain experience.

In my journey as a trader, i do make mistakes myself. The most valuable and priceless thing that i learn from Forex trading is not the amount of monies that i make but the amount of mistakes that i have made to make me a more successful trader. In my week 42 trading, i made quite a number of mistakes due to my impatience.

I ended week 41 with P/L $693.19 and Open Trade Floating P/L $(95.29), which you can see from the MT4 chart.

EURUSD Week 42 Forcast Trend Analysis

Based on the daily chart of EURUSD, there are a 3 key things you need to know from the chart.

1. A Pin Bar on 12-Oct-2010 with a strong support around 1.37742.

2. A Fake Out Candle on the 15-Oct-2010, with day high at 1.41576.

3. A Divergence in the RSI, if you were to count the no. of pips from each divergence, you may notice that the strength of each push is gradually lower than the previous strength.

How I see the currency pair for next week is again the "Not sure what's next" kind of mentality where the market is going. This can also be a consolidation point or week starting pivot point for retracement.

My sentiment of the market is long term bullish but currently bearish. This week i will be looking at short term sell position with overall buy.

EURUSD retracement, extension and projection for Week 41 October

Hi all, after weeks of trading, i still continue to blow my account due to the fact that i am not disciplined with my rules and consistently breaking the rules that i set for myself. Isn't it ironic to break the rules i set for myself?

Today i woke up early in the morning and went for a jog. Frankly speaking, i have not been jogging for the past dunno how many months. The reason why i decided to pick myself up and go exercise is that fact that i recognize that i need to trim my body to reduce the lethargy feelings i always have. Somehow it is affecting my trading focus.

These 2 weeks, i blew 2 demo account again with initial cap 3k USD. So i decided to restart all over again and stick to my trading rules.

I have only been looking at EURUSD and my prediction this week based on the Fibonacci Analysis:-

EURUSD Week 40, Forecast for Week 41.

If you look at the chart that i attached, you will notice that the market begins to retrace abit on the last 2 candles, forming 2 doji. This is a sign of weakness and "not sure what's next" in the market. But this is not the main point that i am trying to tell you.

If you have read about Eliot wave (consist of corrective and countertrend moves) and knows about Gartley pattern, you will notice that the symmetrical move from the 2 line that i drawn is

- the retracement from the highest high to low, with a fibonacci of 61.8

- the extension of green dash line, with a fibonacci of 1.618.

- the projection of point b,c and d to form FE 100%. Notice that the price did not close above this point.

The safety netline for the a reversal trend will be determined based on the 3rd lowest candle from the current highest point. Any break below the 3rd candle is a confirmation of downtrend.

My sentiment for EURSUD next week is more on the downtrend and will be looking for the trade setup. I will also monitor to see the candles are forming Eliot Wave part 3 (strong uptrend) or Garltey pattern part f (pivot point or trend reversal).

Happy Trading!

Screwed my account due to undisciplined

I have to say my normal account position opening is normally 0.2 to a maximum of 0.6 lots based on 1:200 leverages. Early this week, I was in the positive 300+, which made my account balance 4000+. However, as i was trying out other price action trading strategies on the same account and also increasing my position size to 1 to 3 lots, blew my account.

I concluded that I am not disciplined in my rules set by my own self. With the unfamiliarity with price action strategies, I still go ahead with testing it with my demo account. The worst part of it, is not setting any stop loss. 2 of the trades killed my account within just hours.

In the mid of the week 39th, I reopened another demo 3k account and revert back to my own strategies. I made some mistakes here and there, again due to my impatience. My account balance as of now is 3084.35.

Trading is a journey, not a game. I am learning not to rush into things.

EURUSD Next Week 40th outlook

The EURUSD pair's RSI almost hit 80 (79+). RSI 80+- is used to determine the resistance/support for price action. In the coming week, we will see what the market gives in terms of price actions. A price closure below the EMA5 will also be a good indication that a retracement is coming.

My prediction is that the market will try to make a touch at 1.4100+- before retracing.

All the best to my trading! :) Same to you who are looking at my blog.

GBDUSD good short setup on 29 sept 2010

Today GBDUSD daily chart shows a good setup for shorting the market. If you look at the 3 days candle, it shows very long shadow tip with a close almost near the opening price. If you have shorted the market earlier, you are in good hands.

Emotion challenges

Trading is a lone ranger path, you can't be trading because of someone's else decision to buy or sell. You can seek advises, technical findings or suggestions. But at the end of the day, you need to make your own decision.

This week 38th of the year, i am into my 5th week of paper trading and although i am still in the positive zone with $331.68, My gross profit and loss was greatly extended from my previous week.

Partially this was due to my emotion coming into play when my consecutive 4 losses in a row in EUR/USD eat into my profit for week 4, causing my capital to go go back into 2700+. I realised that i read the overall trend and did not put it into consideration and is always trying to think too much ahead that we are in the process of retracing.

5th Week of Trading

Gross Profit: 2 477.42 Gross Loss: 2 145.74 Total Net Profit: 331.68

Profit Factor: 1.15 Expected Payoff: 4.48

Balance: 3 933.84

4th Week of Trading

Gross Profit: 1 565.10 Gross Loss: 962.94 Total Net Profit: 602.16

Profit Factor: 1.63 Expected Payoff: 10.21

Balance: 3 602.16

If you were to look at the EUR/USD daily chart, technically we are out of the downtrend since Jun 2010 based on the RSI 80/40, 60/20 rule. The confirmation of the reverse in trend can be found in the period of August, where the RSI remains strongly at 40 level. From the chart, we can also see that we are in the early 3rd stage of the elliot wave which i forsee it to be the strongest move.

For next level of resistant, I will be looking at 1.36860, 1.37832, 1.38274 for retracement. For Fibonacci Retracement, I would be looking at 1.37832 at 161.8%.

In the coming week, my overview is to look at long positions with short scalping near resistant.

1 month into Forex trading using MT demo account

Till date, i have blown 5 account with initial deposit of $3000. In my 4th attempts, i did manage to profit $1900+. However, i blew it up by making wrong decision and cost me $2900.

Last week after a lunch talk with my colleague, i realized my money management has been the major issue in my trading. He was sharing with me about the tossing of a coin, "it is higher chance to get 50% head facing up in 10 toss or 100 toss?"

Indeed that was a very clear answer which i didnt get it into my head for the past 11 months of trading.

In my 6th attempts in forex, i begin to put whatever i have learned including the money management theory into practice.

So below statement is my MT4 result for this week.

My first start in trying out Forex

I am not new to trading but my personal 11 months journey in trading has not been very successful. So far as of today, my net lost in Stock trading is about 6068USD.

I concluded that I am not sensitive to the market, making more wrong decisions than right decisions, not confident in letting the winning position run, does not practice demo account, sometimes do not use Stop lost, and many mores flaws in myself

My dream when i was in secondary school days was to be a successful trader. I guess by now that after losing quite some monies, i am more or less awaken from the realities that its not easy to be a trader. However, this does not mean i "GIVE UP" the dream. To make it a reality is to work harder and put in more effort.

After doing what I have been doing for the past 11 months, i decided to stop doing the usual and give those areas that i normally feel uncomfortable a try.

3 weeks ago, a friend shared about his personal experiences on Forex to me as to how he manage to make some monies out of it, who has previously lost quite some monies in the US Stocks. Out of curiosity, abit of greed and the disappointment in losing money away in US Stocks for the past 11 months or so and have attended 2 Stock course which cost me 1000SGD+ and 400SGD+, i decided to try out the Forex to have a feel of how a Forex trader can differ from a Stock trader in terms of emotions, mental and physical.

2 weeks ago, I started opening a FXCM demo account using metatrader4 and put whatever i learned so far in Stock courses and from School of Pipsology into practice. As of today, my balance account left with 1414.71USD. So imagine that is real monies, my capital would be down by half in half a month!

My view of EURUSD is as follows:-

Weekly Chart

On a weekly chart, we can see that the EURUSD indices is showing a lower highs and lower lows since Nov 2009. In the chart, i have included the Polynomial Regression Channel provided by fxcanada. If the price in the following months is unable to close above the yellow and purple line intersections, it is most likely that you will expect a further down trend in the EURUSD.

1) If the currency doest not close above the price 1.4200 - 1.4260, you may see the down trend to continue.

2) If the currency close above the stated price, you may likely see that the trend reversing.

Daily Chart

On 3th September 2010, the US employment payroll situation results is favorable to the stock markets. The DOW, NASQAQ and S&P 500 closed with positive for the week with more than 1.2% gain on friday.

So what has Stock got to do with USD currency? I may not be an expert explaining this but anyway here is what i understood. Whenever the stock indices gain, the related currency price drops. Although the gain in DOW indices versus the drop in USD indices is not a point for point, but you will notice that when DOW gain, USD drop. And vice versa.

Using Polynomial Regression Channel

As my friend shared that he is using metatrader4 as the forex platform for trading, so i went to try it out. I realise that this software is good such that it allows you to build your own customize indicators, scripts and Expert Advisor using MQL4 language, which looks like C programming?

As i was looking for possible tutorials available on how to code your own indicators, i came across this mql4 forum containing a number of codes contributed by the forum members. So i downloaded some of them to try out. Among the many indicators that i have downloaded and tried, the best i personally felt so far is the Polynomial Regression Channel indicator which is contributed by fxcanada. I was trying out myself and think the indicator strategy is quite good. However, as i was testing it, i do find that there are certain market conditions that this indicator does not work.