THIS SYSTEM HAS BEEN DEVOLOPED BY MOSTAFA BELKHAYATE
I didn't create this system, it was done by "El Mostafa Belkhayate", winner of the Gold Trophee 2009 Technical Analyst ( Paris Salon AT), Silver Trophee 2010 Technical Analyst ( Paris Salon AT), and curently CEO at "Belkhayate Asset Management".
I'm just showing and explaining it to the forum, as I didn't find any thread on babypips regarding this system, and I thought to open one to share with you all
The creator is French native speaker, and there is not much translated into English on the web, but what i found and studied seems enough to be profitable
Mostafa said that, respecting the signals, this system has a 80+% ratio of success.
Let's get into it!
It's based on Center of Gravity and can be applied ot any market and any timeframe, althoguht I've seen it used for the most on H1 and H4
Indicators and Entry Rules
- The dynamic COG is the one shown on the price chart: the middle line represents the COG, while the space between the 2 Green lines represent the area where to buy and the space between the 2 Red lines represent the area where to sell. This indicator uses a mathematical formula developed (polynomial nonparametric regression) to calculate first the center of gravity of a moving stock (blue line), then 3 standard deviations to upwards (red stripes) and 3 down (green stripes). The amplitudes of these deviations are always proportions of the golden number 1.618.
- The static COG works as confirmation in case one of the situations stated above is matched. To be considered a valid entry, the static COG must be between the lines 4 and 8. The closer it is to 8 (-8), or even better beyond that level, the stronger the signal is in order to sell (buy)
- Dynamic COG Direction: enter only trades signals that match with COG direction (eg: cog lines are pointing UP, we are looking for BUYS only)
- Check Market Flow and trade only signals matching with MF direction to drive more odds in your favour
- Different TF analysis! H1 is showing a buy.. but where are we in term of price on H4? is it above or below blue line? what can we expect on longer term?
The System TP rules are to set it at blue line (dynamic COG middle-line), anyhow most of the time the price runs till further lines, so splitting up the positions, trailing stop etc etc can help maximizing the profit
The System uses Pivot's below (above) the dynamic COG entry-line. What I do is keeping a RR ratio not below 1:2 and look out for possible critical levels around (Trinity extension, Figures, past days S/R, Pivot's etc etc)
In the next example is materalized what explained above
Attached at the end of this post you'll find a third indicator as well, that represents the static COG, just with a line instead of candles. I find it a great further confirmation checking for divergences with price, when the main 2 entry rules are matched of course
Have a good one!