Hey guys, Jman here and I am looking for some help. Let me tell u about myself and then my idea/problem and any/all ideas are welcome =P
I started trading forex about a year ago and have had slight success in a live account trading basic stuff, support, resistance, trendlines, breakouts…, but I am always wanting to learn more and improve. I trade fun new ideas on my demo account when I can and ultimately what I am looking for is a fairly stable trading system that produces maby 1 or 2 trades a day or every few days that takes a small amount of profit and compounds it in the long run. I began looking at MA cross systems, but the ones I have seen are too laggy or last too long if successful for what I am going for. (Though if you know a good one I’m all for hearing about it =P) I also attend school and work, so I usually only get a 3-4 hour period to look at charts in a day. So I started eying daily charts so that I could use long term setups. Then I said to myself “Hey, around 70% of the time or more the current day candle or bar extends beyond the previous days high and low at some point in that trading day!!!” so I was looking at how to take advantage of that and developed a system to buy at the previous high/sell at the previous low and just take a few pips everyday with a stop loss incase things went bad. I thought I was smart X) …then, after manually trading and keeping record for about 3 months I did some searching and found that others had noticed this too and even created EA’s to trade it for them. Now I could back test my strategy and see how good it was.
The Good:
Forward testing was up and down, but overall in the short term it seemed to be heading up. Then I back tested several different years and saw my equity curve shoot up to the top right This was exactly what I was looking for. A system that gave me some trades per week, was not greedy and took small profits, and left no emotions in my trading all while slowly building my trading account. So in all I guess I can say that I am happy with what I have found so far, but like I said I am always looking to improve.
The Bad:
Ok two things here are an issue. The first one is some years, when back testing showed a downward or near equal equity curve (2007, 2009) Trading a whole year for losses or no gains is kind of pointless. The second problem is in how I am determining my lot sizes. The back tests are in terms of 1 lot size so 1 loss will cancel 1 win unless I have a different R:R, but I also looked at the win rate of even trades and It seems that on losing or even years win rate is about 40-50% (no magic there) and winning years have about 66-79% win rate.
The Solution:…???
I dont know if this system can be improved more or not or if there is something that can yield better results.
The way I trade it:
The way I currently trade this Daily Juice system (like squeezing juice out of a fruit…cleaver huh) is I buy at the high and sell at the low of the previous day. I set a small stoploss say 20-30 pips and my take profit at 200. I then move to break even +1 at 20 pips and move my stop to 39 pips when price hits 40. This way I have a 1:2 RR ratio. then I move it again at 60 pips and trail by 10 from there until I am stopped out. I am thinking there may be a way to filter my trades so that maby I know when large range days will be, or new highs/lows will be made, by using volume, MAs, BBs, Custom indicators…just fyi the account increase on most years is about 120% - 130% increase (5000 to 6000) in the back test with same lot size throughout.
any suggestions/changes/systems are appreciated and I will be happy to update with any improvements i get elsewhere for anyone who is interested. What I am going for is to achieve a system that will grow my account slowly w/o risking 1/2 my account, but faster than the bank would (pretty much anything is better than that lol)
Bounus:
I know this part is gonna sound kinda optimistic and unachievable but I’m going to say it in the off chance that it or something close to it out there. In addition to upgrades to this system, I am looking for a system that has around a 1:1 (maby 1:2, 2:1) RR and a win rate around 70% for any given year or at worst 50/50 with again small profits. Preferably not smaller timeframes than 1h but ill look at anything you guys suggest. Even something close to this would work and I will start a new thread off of it, but I have some good ideas that could just profit for a such a system.
Thanks in advance for the input and I hope we come up with something Great
Jman