My �So Easy It�s Ridiculous� System

[B][U]You can find this system at the 11th Grade in the School of Pipsology[/U][/B]

[U]General Trading Setup[/U]

[ul]
[li]Trade on daily chart (swing trading)
[/li][li]5 EMA applied to the close
[/li][li]10 EMA applied to the close
[/li][li]Stochastic (10,3,3)
[/li][li]RSI (14)
[/li][/ul]

[U]Trading Rules[/U]

Stop Loss: 30 pips

Enter long (buy) if:

[ul]
[li]The 5 EMA crosses above the 10 EMA and both stochastic lines are heading up (do not enter if the stochastic lines are already in the overbought territory)
[/li][li]RSI is greater than 50
[/li][/ul]

Enter short (sell) if:

[ul]
[li]The 5 EMA crosses below the 10 EMA and both stochastic lines are heading down AND (do not enter if the stochastic lines are already in oversold territory)
[/li][li]RSI is less than 50
[/li][/ul]

[U]Exit Rules[/U]

[ul]
[li]Exit when the 5 EMA crosses the 10 EMA in the opposite direction of your trade OR if RSI crosses back to 50
[/li][/ul]

[B]I have a similar but different approach to this setup[/B]

[U]My Trading Setup[/U]

[ul]
[li]Trade on [B]1 minute chart [/B]
[/li][li]5 EMA applied to the close
[/li][li]10 EMA applied to the close
[/li][li]Stochastic (10,3,3)
[/li][li]RSI (14)
[/li][/ul]

[U]Trading Rules[/U]

[B]Trailing Stop: Spread[/B]

Enter long (buy) if:

[ul]
[li]The 5 EMA crosses above the 10 EMA and both stochastic lines are heading up (do not enter if the stochastic lines are already in the overbought territory)
[/li][li]RSI is greater than 50
[/li][/ul]

Enter short (sell) if:

[ul]
[li]The 5 EMA crosses below the 10 EMA and both stochastic lines are heading down AND (do not enter if the stochastic lines are already in oversold territory)
[/li][li]RSI is less than 50
[/li][/ul]

[U]Exit Rules[/U]

[ul]
[li]Exit when the 5 EMA crosses the 10 EMA in the opposite direction of your trade OR if RSI crosses back to 50
[/li][/ul]

Two changes only. The first change is trading on the 1 minute chart, the second is I have a trailing stop at the spread price. You can add trend-lines and other tools to show you when to enter, analysing the 5 minute and 30 minute chart may help also to see where the trend is likely to go. Support and resistance lines too. I’m only new and above is how I’ve been trading

I have tested this system a few times and doubled my demo account within 15 days. I tested it again today on my lunch hour and gained 50+ pips. This is a system I am only [B][U]testing[/U][/B] as I’m new to forex. Please feel free to test for yourself and leave feedback, being positive or negative. I believe any feedback is good feedback (unless you’re trying to start a war)

[B][U]Please note:[/U][/B] I have not added any risk/reward, money management or leverage information to this thread. Each to their own and whatever works for you

[B]C.R.E.A.M. - Cash Rules Everything Around Me[/B]

Hi Doggie01,

Appreciate your sharing…eventhough you’re new.
Few questions.

  1. Which pair are you trading? Does it work for most pairs?
  2. Since its a 1 min chart. Is this a scalping strategy?
  3. Which trading platform are you using? Your trailing stop of the spread means that you are not using Metatrader as the trailing stop is at least 15 pips( i think).
  4. Whats your avg trades per day. Where are you living? What time do you do trading?
  5. Whats you lose/win ration? Another works whats your avg winning profits in pips.

Again, thanks for sharing. Doubling your account in a few days/weeks is phenom. It is a good start but pls rememeber forex should not be a sprint, its a marathon.
I’m new too and have been demo trading for the last 4 months. Regards

[ol]
[li]I was originally trading the NZDUSD, now I am trading the GBPJPY. Haven’t tried other pairs
[/li][li]No, not that I’m aware of. I have not yet learned scalping but have read about it
[/li][li]I am using AvaFX’s demo platform but will be using GFT’s platform when trading for real
[/li][li]Average trades per day: between 2 - 10. I live in New Zealand (GMT+1200). I usually trade around 1200 and from 1700 onwards (my time)
[/li][li]I’ve had 2 bad trades out of many, probably 30 to 40. Average pips: 10 - 20
[/li][/ol]

I’m sorry Sng, I don’t know what that is. Please feel free to explain

He’s asking if you have written an Expert Advisor for Metatrader 4, and then have MT4 run the last few years of market data through it to see how well your strategy would have done over time.

I have tested this system a few times and doubled my demo account within 15 days.

How much are you risking per trade?

30 pips if i am not wrong

Hi doggie it’s andy, i am thinking about giving it a try

Sorry, I mean in terms of percentage of account. What percentage of the account is being risked per trade to double your account in 15 days?

No I haven’t

Go for it my friend. Use a demo account and see what you can do !!

[B][U]Yesterdays Trades[/U][/B]

[B]First Trade[/B]

  • The 5 EMA crossed over the 10 EMA at 2015 GMT (default time on platform)
  • Stochastics were both heading up and not quite in the over-bought territory
  • RSI was above 50 - sitting on 52

I also added the MACD to the mix and used it in this trade

  • The MACD’s averages crossed and the histogram moved from negative to postive

[B]Enter:[/B] 141.30 at 2015 GMT
[B]Exit:[/B] 145.30 at 2105 GMT

At 2105 a reversal of my entry strategy happened and I made my exit

[B]Profit:[/B] 400 pips

[B]Second Trade[/B]

I was 30-60 seconds late on this one but still saw room for movement

  • The 5 EMA crossed over the 10 EMA at 2307 GMT
  • Stochastics were both heading up and almost in the over-bought territory
  • RSI was above 50 - sitting on 60
  • Crossing MACD averages and the histogram was between negative and postive

[B]Enter:[/B] 145.07 at 2308 GMT
[B]Exit:[/B] 145.17 at 2311 GMT

At 2311 the 5 EMA crossed under the 10 EMA, I jumped out and was happy with the take

[B]Profit:[/B] 10 pips

If I had stayed in another 8 minutes I could’ve made another 22 pips but the EMA’s had crossed and the exit rule had to be played. Not too worried about the missed opportunity of another 22 pips because I made 10 pips while keeping to my system

I DO NOT TAKE UNNECESSARY RISKS. I HAVE A SYSTEM AND I HAVE RULES. I STAY TRUE TO MY SYSTEM AND MY RULES. I TRADE WITH MY BRAIN AND NOT WITH MY EMOTIONS - said outload for self-influence

[B]Third Trade[/B]

I saw the potential reversal and waited for the green light

  • The 5 EMA had crossed under the 10 EMA at 0409 GMT
  • Stochastics were both down and near the over-sold territory
  • RSI was below 50 - around 25
  • The MACD averages had crossed 5 minutes before and the Histogram building on the negative side

I was a little sceptical before entering but wanted to test the system

[B]Enter:[/B] 144.70 at 0409 GMT
[B]Exit:[/B] 144.05 at 0423 GMT

At 0422 there was a strong surge from the bears, pushing the candlestick down 34 pips. My exit system did not give me a point to close but when the 0423 candlestick did not surge on straight after the 0422 I exited happly

I think I still need to learn more on stop/loss and trailing stops. I don’t think I know how to set them up correctly

[B]Profit:[/B] 65 pips

475 pips up, 0 down. I called it a day and chillin’ til Monday

[B]Thoughts over the weekend:[/B]

I want to test my system on a demo account to the end of March '09. I have my own Online Sales Business I operate in my spare time and will use the next few months to clear my stock. Once the stock is cleared (aiming for March 31st '09) I will focus on Currency Trading and put Online Sales on hold

This time frame is good for a number of reasons:

  • April 1st '09 is the start of the new financial year
  • I have more time to learn more before trading real money
  • I can test my system and document a greater amount of results
  • Will be a cleaner transition between ventures for my accounting records
  • Allows time to clear my Online Sales stock before commiting to another venture
  • G20 have announced to have actions taken by March 31st '09 for their next summit

This, to me, is a good plan and will work well with my needs. I do not want to jump into trading real money any time soon because I know I need to learn more and test my system. I only want to invest $1000.00 and do not want to loose it straight away

I’m hoping my system will produce good and reliable results. If so, I want to build my account rapidly. At first the risks will be high. Once the account has a growth pattern the level of risk can be lowered. This is almost like a race to the safe zone. Very risky but the initial deposit of $1000.00 is spare capital I can survive without. I just hope my system proves that it can be done between now and April 1st '09

This is how I want to build my account:

$1000.00 - initial deposit

$500.00 - weekly gain (5 days of trading)

$1500.00 - 1st week (including initial deposit)
$2000.00 - 2nd week
$2500.00 - 3rd week
$3000.00 - 4th week
$3500.00 - 5th week
$4000.00 - 6th week
$4500.00 - 7th week
$5000.00 - 8th week

By the 16th week I aim to have $10,000.00 as my account balance

Once I have acheived this goal I will re-evaluate and create another plan

This plan is based on a $1000.00 mini account with GFT, 400:1 leverage, .25% margin required. I know it’s early to say the following but I will say it anyway. I expect my system to be successful and I will be trading 1 x standard lot (leveraged) at a time to meet my daily targets. That equates to roughly $10 per pip movement, meaning I will need to gain 10 pips to meet my daily target. If my system is successful and reliable, there is no doubt in my mind that I will be able to acheive my weekly goal in a day, resulting in the following:

$1000.00 - initial deposit

$2500.00 - 1st week (not including initial deposit)
$5000.00 - 2nd week
$7500.00 - 3rd week
$10,000.00 - 4th week

This strategy will enable the same results above ($500.00 per week) but in a quarter of the time. This is where I expect critisism. I know it is a bad practice to forward plan profits and leverage in currency trading for a number of reasons but it is part of my strategy. These goals are what I am going to acheive [B]if my system is successful and reliable[/B]

If not, I will start over

Dear Friend,
Your system is very interesting and will help newbies to have a look and implement. I request you to provide screen shots of trades and if possible post videos if you can in the forum if that is allowed.
Thanks in advance and best wishes,
Muthu.
If possible pls send them over to my email
<[email protected]>

I feel you’re setting yourself up for big letdown. If you achieve your goals (and i hope you do) it will be sheer luck.

I’m sorry but I don’t know how to do this

Keep following the thread for updates

Thanks for the feedback. Can you please explain your opinion further ?

well, for one you arent going to be consistent every week as you project, some weeks will be winners some losers. its more realistic to have a 2 month goal and simply be profitable rather than huge profits.

Using your weekly timetable, here’s a more realistic projection,
1000 initial deposit

$1020.00 - 1st week (including initial deposit)
$1040.00 - 2nd week
$1060.00 - 3rd week
$1080.00 - 4th week
$1100.00 - 5th week
$1120.00 - 6th week
$1140.00 - 7th week
$1160.00 - 8th week

Even this would be almost a 100% return on your money annualized!

Using your weekly timetable, here’s a more realistic projection,
1000 initial deposit

$1020.00 - 1st week (including initial deposit)
$1040.00 - 2nd week
$1060.00 - 3rd week
$1080.00 - 4th week
$1100.00 - 5th week
$1120.00 - 6th week
$1140.00 - 7th week
$1160.00 - 8th week

Even this would be almost a 100% return on your money annualized!

I agree, with one small difference… You should compound your earnings. Your weekly goal should be a percentage of your current balance, not just your beginning balance.

$1,020.00 - 1st week
$1,040.40 - 2nd week
$1,061.21 - 3rd week
$1,082.43 - 4th week
$1,104.08 - 5th week
$1,126.16 - 6th week
$1,148.69 - 7th week
$1,171.66 - 8th week

hi friend nice post on here…so far it seems ur strategy is working out on demo ,… our trade is kinda similar i look out for jus maximum of 20pip or if posiible 10pip…with the leverage of 1:400, which is $10 per pips… let me know how much its going with ur demo…and i want to to explain more regarding ur own strategy… u can as well email me at <[email protected]>

HAPPY TRADING

Thank you for explaining. I see your logic in this example and I do agree it’s possible not every week will go according to plan. Your example shows a 20 pip increase per week. That’s quite low and I do believe I can better that. If my system does not provide the results I want, I’ll revise my strategy

Keep monitoring my progress

Also thank you phil838 for contributing

Thank you for your input. Keep monitoring my progress here on this thread. If you’d like you can state your strategy here and we can share ideas. I don’t mind

[B]Thoughts Continued:[/B]

A strategy for the first leveraged trade

One way to reduce my start risk is to trade with mini lots, $1.00 per pip, and build the profit to $100.00 or more. This would allow the first leveraged trade, $10.00 per pip, to have a safety-net for if it was to turn bad. This would also allow me to expand the automatic stop. I’ll be okay if I was to loose the generated safety-net funds ($100.00 or more). If the trade goes in my favour, the safety-net funds will increase and provide a bigger safety-net for the next trade

[U]Please note:[/U] I am still happy with breaking even, like I mentioned at the start of my thread. Anything more is a bonus. I am trading towards that bonus and expanding on it. The figures in my projected profits are targets I would like to reach, and I believe they are possible with my strategy

I’m away for a couple of days and have an assignment due this week. I’ll either have some trade results or more thoughts to write later this week. Please keep monitoring my progress and feel free to leave any feedback, input and/or advice

Hi Doggie

Quick question for you.
I notice in a number of patterns i’ve followed that your exit rules are quite often an entry signal in reversal as well.
Do you often do this. i.e. if you were long then immediatle go short ?