Dilemma Strategy

[OmerHassan]

Most of you have probably already thought of something like this before but I'll share it anyway because this method has an amazing success rate. The logic behind my "Dilemma Strategy" is that when the price reaches a strong support or a strong resistance level, it usually tries to break it and it doesn't matter whether or not it succeeds because it is the trying that I'm gonna take advantage of.

I have only tried this strategy on USD/JPY, EUR/JPY and GBP/JPY so I can't speak for rest of the pairs.

OK, now spot supports and resistances in the 4h chart.

When the price reaches one of these levels, buy and sell your pair. That's right. You have to create two opposite orders at the same rate.

For each of those orders, TP = +20 pips, SL = -90 pips. You might get to extend the TP to 30-35 pips if you're monitoring your trade.

That's it.

In case you're a money management freak wondering, "Hey, I'll lose the money I made in 5 successful trades in just one bad trade," well, yeah, you will but I found out the probability of success to be 7/8 and that is why I decided to post it here.

[TalonD]

but wouldn't you be loosing money on one at the same time you are making money on the other? Wouldnt the two orders offset like a hedge?

[OmerHassan]

but wouldn't you be loosing money on one at the same time you are making money on the other? Wouldnt the two orders offset like a hedge?

When the price is trying to break a support or a resistance level, it will usually oscillate above and below that level for some time before finally deciding its direction. The oscillation about this level, which is your entry level, will make you profit on both trades because the price is moving in both directions. The 90 pip SL ensures that none of your trades gets stopped out in the middle of one of these oscillations.

[mastergunner99]

How many trades? 7/8 is over an 80% success rate.

[OmerHassan]

How many trades? 7/8 is over an 80% success rate.

8 trades

[mastergunner99]

Well, lemme know how it goes after 100 trades.

[TalonD]

I still don't get it. if you have two opposite trades and price is just bouncing back and forth between them, doesn't it just balance out to zero gain?

[mastergunner99]

I still don't get it. if you have two opposite trades and price is just bouncing back and forth between them, doesn't it just balance out to zero gain?

He has a large stop loss on both ends. Let's say you have two open. Price moves to hit on profit target, and he's then assuming it's going to bounce back and knock out the other profit target. All this done without hitting the stop loss.

Personally, I wouldn't trade a method like this. However, that does not curb my interest in how it fared after 100 trades.

[OmerHassan]

I still don't get it. if you have two opposite trades and price is just bouncing back and forth between them, doesn't it just balance out to zero gain?

Take a look at GBP/JPY 4h and 1h charts. It touched the 143.53 resistance a few hours ago, right? If you opened two positions at 143.53 - one long and one short - and used that 20 pip TP and 90 pip SL, you would have made 40 pips now because since the price touched that level, it's been oscillating. Get it?

[TalonD]

ok, I get it, you've got a take profit. so if that gets hit youve got profit on that trade. But the other trade is still open. so now you only have one trade open so do you open another one so you still have two open ? so you can continue catching the oscilations back and forth?