MY SYSTEM by GASANVILL

Beginner Questions
1

Hello

First, my system is not for newbie traders, so I assume you know all the basic concepts of trading and technical analysis.

The pairs and timeframes back tested on this method are:
EUR/USD (4h and daily)
EUR/yen (4h and daily)
AUD/USD (4h and daily)
GBP/CHF (4h and daily)
USD/yen (4h and daily)
GBP/yen (4h and daily)
Only daily: EUR/GBP, CAD/CHF, EUR/AUD, USD/CAD

The W/l ratio for the system is 70%, and the R/R ratio is between 1.5 and 2.

The advantage of my system is that you can track 10 pairs to look for the best setups, you are not limited to 2 or 3 pairs. Since you will be trading 4h and daily charts, you will only have a few trades a month, so patience is needed here.

Indicators: 50 SMA, 100 SMA, 200 SMA and Bollinger bands (standard settings)

The moving averages are not used as entry signals, they are only used as support and resistance levels, those 3 moving averages are the most powerful in the big charts, so is important to take a look at them, big moves occur when price is around them.

ENTRIES:
Short: Wait for the price to TOUCH OR COME VERY CLOSE to the upper band, and then place and entry order a few pips below the middle band. The condition is that the upper and middle band must be pointing in the direction of the trend (down). If the lower and middle band are choppy you don’t take the trade. For LONG entries just do the opposite.
Lets take a look at some examples for SHORT entries:

ex1.jpg700×470 11.6 KB

As you can see in the chart above, price touches the upper band and then breaks down the middle band. Also both bands are pointing down so we take the trade. The SL is placed a few pips above the candle the candle that touches the upper band.
Lets see another example:

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Same as before, both conditions are met so we enter the trade short.

Lets take a look at a 3rd example:

ex3.jpg700×470 14.1 KB

In this case, price touches the upper BB, but the middle and upper band ARE NOT POINTING DOWN, and also they look kind of choppy, so we DON’T TAKE THE TRADE.

More examples will be explained in upcoming posts. Also the exit rules are a bit more complicated because they involved time and trailing stop, but nothing too much complicated. Trading is simple, but not easy. This is a simple system, but is not that easy to master. The more important of the system is the SETUP, if all the conditions are met then you take the trade. When ou have more experience you will learn to recognize more easy the setup.

Please feel free to ask any questions.

2

Hi gas! Great to have you back, been a long time! I’ll be watching this thread closely.

3

Hey fartist…yeah long time. Nice to hear from you to!

4

Hi Gasanvill,

Great strategy. I tried something similar with the BB and it worked briefly but most of the time i’m wiped out by trends. The direction thing looks pretty sound for filtering bad entries, i’ll try it out. thanks!

5

Hello Finalz

Yes the idea is to enter on a pullback and not against the trend. The middle band is a good indicator of the trend, so you want to take the trades with the middle band in your favour

6

Hi Gasanvill, on the third chart there is a touch on the top band that appears to fit the criteria for a trade, just to clarify it, is the reason for not taking that trade because the candlestick is an inverted hammer which is a bullish signal? I am refering to the candlestick 7th previous to the highest encircled. Tony.

7

ex3.jpg700×470 14.1 KB

Hello Tonna.

If you are looking for short entries you only search for candles that touch or come closer to the UPPER bollinger band. In the example you are giving (7h candle previous to the encircled one) the candle touched the LOWER bollinger band so is a bullish signal, which by the way you dont take becasue the middle bollinger band is not in your favour (is not pointing up).

So, for short entries look for candles that come closer or touch the upper band, and to take the trade the middle band MUST be pointing down.

The chart above was a perfect example of why you dont take the short trade.

So, for long entries look for candles that come closer or touch the lower band, and to take the trade the middle band MUST be pointing up.

8

just wondering though, what are the default setting of your boilingerband? 14,2 or 20,2?

9

The settings are: 20,2

11

Thanks, looks like a good system to me, will try a few paper trades & if ok will have a go myself, have never used bollinger bands to trade so it should be interesting to see how this go’s.

12

Yes, remember to try it also in the pairs and timframes I said.

13

I’m being nit picky but You wouldn’t short on this candle?


14

Hi Gas

Seems to be a very good system and I would like to know whether you are still with this system and if so the progress of it as this thread is not active for some considerable time
I will give a try as at a glance results are very promising
Thank you

15

hello there,

any one know about any results or any back testing on this strategy? Looks good though if it works. can someone prove it tho…

also more coments would be good…aftr a long time…

16

Hi Skynet

I just back test Sep 2011 and found that it gained around 1615 pips for the month.
So I thought to extent few more months
once I finish I will let you know the result
Happy Trading

17

hey surindm,

first of al thanks fr the result fr ths month, al those pips sound alot and great dont u think!.. i had a few more questions about the strategy… bt il wait til u finish doing the othr results… il look forward to thm…

thanks man.

18

Hello Skynet.
This is a system I developed based on back tests since 2000 for daily charts and since 2006 for 4h charts. The system has been proved in the pairs I mentioned in my first post, giving a w/l ratio above 79% and a r/r ratio above 1.5.

19

Sure Skynet…feel free to ask any question

20

Glad to hear your backtesting is doing good!

21

Hello traders!
I havent posted an example of a long entry so here it is:

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