It will give u much better insights and such mechanical system shouldnt be done manually anyways. I've never seen it before, but if it does exist, then I at least I thought it up without outside influence. Thanks for posting this awk , ive started demo'ing it myself. Could you post the specific details on the next trade you take and the result just as an example? Absolutely, I will be posting it up as soon as the day closes.
I am finding it might be easier to use NY close charts because they only use 5 day weekly candles. Right now there's a bit of confusion with this doji for the sunday candle. I think I may just stick with the ny close to avoid that. Also, I'm finding that mondays are difficult trades because they go off of the previous friday as the daily candle. I believe the monday difficulty can be attributed to the news reports that occur over the weekend. It could also be because of the US Jobs report given every fourth friday.
I need to get some more information from my back testing. On a side note, babypips suggests that the worst days to trade on are monday and friday. So friday might be a day to watch and see how much volume and volatility is occurring during the first few hours of the market. If on average the TP is hit by noon on friday, Friday could still be a "recommended" day for this strategy. Monday will take some time to determine.
Thanks all for your input. I will be posting daily charts regarding this strategy, and I will be available during the weekends to discuss improvements and such. I think you jumped the gun with the thread, but at least you are making it clear that it's a work in progress even if the thread title does not. This strategy is probably one of the most studied and worked on strategies in Forex There are tons of versions out there. It's nice to be working out your own version of it, but as you are seeing I think it can be done, but you have some work ahead.
And you are right. I am looking at volatility periods and whether I should be concerned with certain days. The appropriate stop loss and target profit are my main concern to just get in, make my pips, and end the trade, which is still a working progress. I have seen lots of approaches to this strategy now, but they all look at it on the daily chart, and have massive stop losses due to intraday movement. Most people are lazy with this strategy.
It is a very nice, very simple strategy and pretty much gives you the trade, but most traders are trying to turn it into an EA so they dont have to do anything.
While I can appreciate that, this is a little difficult to turn into an EA because it will take every trade into account. Using this strategy, I don't like to take more than one trade a day, so if it's a loss, i call that day a loss. And I live with it. Most people just want to set the EA on the daily, with no effort into looking at what happens at the trade, which is what I'm offering.
For example, they are setting the EA to take the trades that meet the criteria. This means if a signal for long is entered, they enter and they get stopped because there wasn't a strong enough breakout.
But, if there is a lot of volatility and high range of price during that day, they may end up taking a short trade a few hours later. While there's a chance that that particular trade could cover the previous loss or losses, this strategy adds a complication. Some people who trade this use the breakout as an entry, but like I said previously, they use big stops to give the trade room to run. So what happens when the EA is long and short?
Now you are hedging your trades, which means any profit you have is now taking a partial, if not full or more loss. Why use the EA? Because people don't want to put in the daily effort with this strategy. What happens if you set up this huge stop loss? Then you enter on the breakout of the high. Remember, this is a SET and FORGET strategy. At this point you're looking good but remember again, you're not watching the charts.
Then the trades into a bearish pinbar. You've now lost all that potential profit, possibly entered short and are now in a hedged position. Right now, you owe the broker a pip spread. Just have to see if that gives me a good winning average. It will average roughly - pips a month after the spread and taxes. So I'm okay with that amount.
I'm not trying to make pips a month, but enough to provide a supplemental income to support my family. Not having to worry about money or trading as a full time job would be simply a bonus. I just want to develop the appropriate parameters to a very simple strategy to help those who need a little extra financial help, to help those develop a fund for the future, emergencies, retirement, etc, etc. Once I figure this out, then all I have to do is set up my orders after the market closes for the next day.
Trying to use an EA at this point would be more effort than it's worth. Don't be so quick to dismis. You can place orders that cancel the other one once they have been triggered. So I doubt any strategy, with more than a couple of minutes of thought behind it, would end up with hedging orders I can even think of strategies that, in theory, could work that way.
I'm just saying,,,, there are lots of ways to skin a cat. I suppose that the strats with bigger stop losses are just a natural response to trading daily charts. You, on the other hand, are taking a very short term, almost scalping approach, to trading with the daily charts.
This is interesting, and it might give you that edge that you need. I recommend that you be very methodical and statistical about it. You, with your strategy, are looking to out smart those guys.
Maybe even a tighter take profit could prove to be profitable. Trading is not just about the number of pips What you were saying about monday's definitely came into play over the last day or so.
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I'm pretty new to forex as well but this general strategy does show some promise, in theory at least. One pip may not be enough to truly insulate you from fake breakouts.
I've designed a similar system myself, although I look for low volatility signals. Thanks for the comments. Ace, I've seen a decent idea concerning monday issues.
Developing a system #20 (Daily high/low trading) | Forex Strategies & Systems Revealed
This is to ensure the market is actually going to make a move for monday, but also the question is, if you increase the entry point, will their be enough movement after that to be worth the risk to reward for the trades. It may even be plausible to not even trade on mondays all together. These are questions and concerns that I plan to answer, in due time.
As an update, On monday, there was no break of the high or low from friday, which means we are on an inside bar.
And now, today on tuesday, there has yet to be a break on the high or low from monday. So now we have a mother-child-child setup for those who know Inside bar candles. This could be a great example for me to teach the spin of the IB for this day break strategy that I mentioned on the first page. Hopefully we get some nice trades towards the end of the week, since the market has been acting weird due to the holidays.
Starting Monday, I will be doing my forward testing with a demo account.
Basically, I will be explaining overall if there is a way to fine tune the day break strategy to make it profitable. Stop or Target Profit.
Set and Forget Stop: After I have accumulated enough data, I can apply minute changes in order to determine if I'll have a higher winning average. As of today, I feel I will need to cut Mondays out of the trade entirely. I doubt even altering the settings for just Mondays will serve to increase my winning average, but we will see.
Hey Traders, Starting Monday, I will be doing my forward testing with a demo account. As of right now, my trade setup for this demo is as follows: Hope you guys enjoy the future of this and can learn something from what is presented. What a coincidence it is that you wrote this. I started looking into this strategy the other day. I still need to look into it a lot more today, but so far it is profitable. I am using the same SL and TP as u have mentioned here.
But have seen the need for entry at 5 pips above below. I have to apologize to you and other traders. I had to take a 2 week business trip and was unable to carry on with testing this strategy. So come this monday, I should then actually begin to test it finally. My work keeps me busy but I'm working on this and another strategy as well.
I hope to see your result next month. I am as well. How do you like it? Good luck on that and I look forward to seeing what you come up with.
Looking forward to seeing how this develops. Do you have some early results to share with us? Free Forex Trading Systems. Just food for thought. Happy New Year, AK. Hello AK, please carry on!