Gig flexi-Hedge System
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Gig flexi hedge system is an intraday strategy that is aggressive for pips.The system offers a flexible way of trading currency by making use of major price support and resistance levels in the market whilst not sacrificing discretion. The system is flexible and this is necessitated by price behavior in the first 7hours of each day. Price behavior in the first7hours of each day presents a variation to be traded for the day (And I’ll talk about these variations soon).
Gig System Trade Setup:
o 15 minutes Chart
o Pivot points calculation
o Trend lines drawing
o Channels
o Moving Average( 50SMA)
How it works:
I use 15minute timeframe because it allows catching the best entry and exits opportunities. Hourly chart for example, when the signal is there is quite too late already to react/enter.
Each morning I start by calculating fresh pivots from midnight to midnight.
I study price behavior in the first 7hours of the day. (Europe/London open around 7.30a.m/8a.m GMT)
What I do before 7amGMT in preparation for the London Open:
o Calculate and place major S/R levels on 15minutes chart.
o Study price behaviour in relation to these levels, Moving Averages, trendlines and the channel that normally forms, between new day break and 7amGMT.(Initial Early Morning Channel- IEMC)
o Check my Forex news calendar @ forexfactory for upcoming news
o Place predictive trades using pending order and occasionally market order depending upon price behaviour between new day break and 7amGMT.
o
Price behaviour between new day break and 7amGMT
o Where did price open in relation to the PP (pivot point), above or below? The answer to this provides the first clue to traders biases for the day.
o Did market smile a good morning @ Long trade for the day? [If market opened up above @ PP or a small distance away, up above PP, I look for opportunity to go long for the day.]
o Is price above moving average?
o Did market smile a good morning @ Short trade for the day? [If market opened down below @ PP or a small distance away, down below PP, I look for opportunity to go short for the day.]
o Is price below moving average?
o Did market exactly open @ PP or away from PP?
o Market has opened a little away from pivot. Now has price pulled back to PP?
o May be it hasn’t pulled back between this time under consideration. Price may pullback to PP later in the day. Now can you put price in a range, a channel (IEMC)? I found out this range could persist and could be traded. (Initial Early Morning Channel Strategy)
o Has price zigzagged along PP? How big is the range? Can you put a channel on it?
Price behaviour between new day break and 7amGMT(see attachment)
The above chart is a EURUSD 15 minute chart illustrating how price behaved from daybreak to 7amGMT on the Wednesday 21st July2010.
Pivot and Major S/R obtained by virtue of data from previous day include: R3=1.3184, R2=1.3105, R1=1.2995, PP=1.2916, S1=1.2806, S2=1.2727 S3=1.2617.
As you can see, the dotted line represents midnight/Daybreak of previous day/new day, 20th/21st July 2010.
The vertical aqua line represents 7amGMT, i.e 7hrs after new daybreak.
Can you see price behaviour between these times? Price is in a channel of 34pips (purple to purple) .This is my Initial Early Morning Channel. I will illustrate how I trade such channels under my Initial Early Morning Channel strategy in one of my variations.
Can you now predict with some certainty the direction of price from here?
This is a case for my strategy VARIATION 1A, and I’ll be showing how to trade this.
VARIATION 1A
I have a variation1A case when ,as in chart 1.0, market opens below price from dawn of new day, stays in some consolidation sort of up to like 7amGMT, thereby price, forming a tradable channel(IEMC) for our strategy(20pips +).
If a new day passes as a candidate for variation1A, I trade the following strategies:
A. Initial Early Morning Channel strategy
B. Pivot level strategy
C. Appropriate Major S/R level strategy (This strategy is sometimes delayed, as price normally must make some journey into the day to validate the strategy at this level.)
Looking at chart1.0, I will place the following trades:
A. Initial Early Morning Channel strategy
@lowerBand of Channel:
-
Buy Limit : Entry Price = 1.2874
Profit Target = 1.2906 (@ UpperBand of Channel)
Profit = +32pips -
Sell Stop : Entry Price = 1.2874
Profit Target = 1.2806 (@ S1)
Profit = +68pips@UpperBand of Channel: -
Sell Limit : Entry Price = 1.2906
Profit Target = 1.2874 (@ LowerBand of Channel)
Profit = +32pips -
Buy stop : Entry Price = 1.2914 i.e(1.2906+8pips)
Profit Target = 1.2956 i.e (Midway b/n PP and R1)
Profit = +42pips
B. Pivot level strategy
- Sell Limit : Entry Price = 1.2908 i.e (1.2916-8pips)
Profit Target = 1.2806 (@ S1)
Profit = +102pips - Buy stop : Entry Price = 1.2924 i.e(1.2916+8pips)
Profit Target = 1.2956 i.e (Midway b/n PP and R1)
Profit = +32pips
C. Appropriate Major S/R level strategy ( S1 Level in This Case)
- Sell Stop: Entry Price = 1.2806i.e (S1)
Profit Target = 1.2735 (@ S2+8pips)
Profit = +71pips
All of these trades would have yielded:
Total Profits: (+32pips +68pips +102pips +32pips +71pips) =+305pips
+42pips from Buy Stop @ UpperBand IEMC Strategy and +32pips from Buy Stop Pivot Level Strategy were not recorded as these trades did no get triggered.
The chart below chart1.1 shows the trade as it happened……………………………………
(see attachment)
ON MONEY MANAGEMENT FOR THIS STRATEGY:
MONEY MANAGEMENT
(see attachment)
With Instaforex: WithOther Brokers:
1.0 lotsize =(1pip)=$1 1.0 lotsize =(1pip)=$10
i.e, 100pips=$100 i.e, 100pips=$1000
=> $20/$100=0.2lotsize etc => $20/$1000=0.02lotsize etc
Probability of getting a market sentiment right=50%.
Ten(10) trades ,@ least , will be placed.
Usually Probability of triggered trades=8/10=80%.
Risk/Reward=No.Win/No.Loss=5/3=166.67%
I double lotsizes for trades in the direction of market sentiment for the day. Say,For trades on $500, I’ll use a lotsize of 0.40=2*(0.20) on Instaforex but 0.04lotsize on other standardized accout type Broker Platforms.
I use single lots for trades placed in opposite direction to market sentiment of the day.
Say, For $500, I’ll use a volume of 0.20 on Instaforex but 0.02 on other standardized accout type Broker Platforms.
Gig flexi-hedge system comes with varying degrees of TP sizes, dictated by the the outcome of the distances between pivot points so plotted on the chart.
My 5WINS= say, 20pips 20pips 20pips 50pips 50pips , to say the least.
I’ll trade daily ,full time, two times in a week.
Daily ROI : 13%(double lot) and 6%(single lot)
Weekly ROI : 27%(double lot) and 13%(single lot)
Monthly ROI : 102%(double lot) and 51%(single lot)
You can modify some parameters for your own tolerable expectations.
This system has so many variations depending upon price behaviour from break of new day. Thisn is just one variation. subsequent ones will follow shortly.
Hope I get good critics.
Thank you
atomoore