Daily GPB/USD trading strategy yielding big returns

Trading Systems
1

I thought I’d share my account trading history with a quick explanation of how my trading strategy turned around over the past 6 months.

https://www.myfxbook.com/portfolio/p...profits/282668

I have been trading a very specific strategy since March 2012, the broad idea was introduced to me through a trading mentor, and I have been honing it ever since.

The goal has been to identify a daily move on the GPB/USD of 50-60 pips and keep my stop tight at 20 pips. During the London session you may notice that a move of 50 pips with virtually no retrace is fairly frequent. I thought if I could identify the direction and entry then it would become a profitable strategy.

I risk roughly 5% of my account equity per trade, therefore a win equates to 12%+ growth to account equity.

Now, you will see that the strategy started very well with a 44% return in the first 8 weeks… At this point in time I thought I was a genius!

But then the wheels fell off and I gave back all my profits to the market in an equally short space of time. So what happened?

I identified a number of issues that were resulting in the reversal of my fortune.

  1. The market volatility was reduced. A move of 50 pips was becoming a tough target. The GPB/USD would frequently move 30 pips in my favour, then reverse.

  2. I was trailing the stop tightly. I was so worried about continuing my losing streak that would move my stop up as fast as possible. I was then being stopped for 10-15pips, only to see it bounce off my stop and move in the intended direction.

  3. I was setting static pending orders in the general area that I expected price to bounce off. As a result, the price would often blow through my entry and my stop very quickly.

[U][/U][B]So, what did I do to turn this around? [/B]

  1. I narrowed my profit target for a brief period, but luckily market volatility returned quickly, so I was able to leave my take profit at between 55 and 60 pips.

  2. Once I opened a trade I would let it run. I still have an automatic trailing stop once the trade moves 35pips into profit, but I no longer trail it tightly and now allow the trade to “play out”. This been the biggest change that I’ve made.

  3. I now time my entries very closely looking for a confirmed directional change on the 1min chart before I enter. This has the effect of giving me the trade more room to breathe. It is very rare that I am stopped out within the first 30mins of a trade opening.

All this has resulted in my trading account growing substantially. At the time of writing I now have an account growth of 101% in the past 10 weeks.

https://www.myfxbook.com/portfolio/p...profits/282668

If you have any more questions about the strategy please let me know.

Regards,

Nick

2

Nick, your link does not work for me, it just takes me to the myfxbook home page? Chris

3

Hmmm, ok. Weird.

Try this.

Pound Dollar Profits System | Myfxbook

4

Not to criticise but the drawdown looks scary… Nevertheless, an awesome result :slight_smile: What do you base your entries on?

5

Yeah, a drawdown of 20-30% is a real possibility with this strategy. Because I risk 5% of account equity each trade, a string of losses can hurt a little. But I have found that I recover quite quickly.