Congrats! That’s great to hear.I would say if you want to increase the limit, only do so when volume is high and the trend is strong. Also,i would suggest staying at a three pip limit. Right now moving up to 5 isn’t a bad move.But soon you’ll want to move to 7, then 10 and so on.everytime I’ve increased the limit i got burned, but it’s certainly possible if you trade at the right times. And one last thing,i would suggest to get in the market and get out.The way i think is, if i make one good trade I’m happy for that day.Of course i want to make another good trade, but the market isn’t going anywhere.Tomorrow it’ll be trading opportunities, and the next day, and so on. Once i make my good trade for the day,i see every other trade after that as an opportunity for me to lose what i just made, plus a little more.However if the signs are really strong and you are confident in the movement of the currency, then by all means take those trades! But just don’t get too caught up in one day, take it step by step.
My internet was down for quite some time, but I now have [U][/U][I]11 straight wins[/I] without a loss trading exactly as per your rules and recommendations. This is great [B][/B][U][/U][I]fun[/I] despite the high risk to reward ratio. I can’t remember having that many wins in a row before. I very much like getting in and out of the market quickly.
Thanks again for sharing. Please keep this thread alive.
I peruse the 15 currency pairs that have the lowest broker spread on Oanda. I will likely prune the list to eliminate those pairs that don’t flow smoothly.
I have actually entered 18 trades so far, but closed out 2 trades at break even because it was taking what seemed an eternity for them to close. It turns out they both would have been wins had I allowed the price action to play itself out. So my current status on my live account is 16 wins, 0 losses, 2 BE.
Also, I don’t always wait for the hourly candle to close before making my entry. Sometimes the Stoch cross has already occurred and doesn’t have any momentum remaining by the time the hourly candle closes.
As has already been mentioned. You are deluding yourself if you see any long term mileage in this. A 10:1 R:R is never going to work. Your rules are very simple (thats good) which means its easy to automate. Not saying at all that automation/EAs are a good thing but they do give a reasonable indication of long term performance. I had a go at automating this (i had an EA almost set up correctly already) and its a loser (a BIG loser). Yes, it looks good if you use it over a shorter period. People are reporting win streaks of 16 and thats in line with my testing. For example on EURUSD only: The longest win streak was 24 BUT the total hit rate was only 84.17% (on a 10:1 R:R you need over 90% just to break even). The longest losing streak was 2 but because of the extremely bad R:R you couldnt even martingale this.
This system isn’t meant to be automated.You have to use experience to determine which crossovers are legit.When you use an ea, the computer trades every crossover, which is not the goal of the strategy.By manually taking the trades, you significantly reduce the chance of trading a bad signal.also,i do agree that the ratio is too steep.i have recently changed my ratio to a 5 tp and 20 sl, which is much more suitable for my trading style
Also, the tp and sl can be adjusted based upon the trader, And yes,a lower ratio would help you stay in positive territory should you encounter a position that hits the Sl.
Last week’s results: 24 wins, 1 loss. 2 break even. Net +69 pips. The singular loss was only 3 pips. The loss and 2 break even trades would all have been wins had I not chosen to “intervene”. Half of the trades were on EURUSD because of the low broker spread. I switched to TP=5 and SL=20 aka MrC this AM, and won my 1st trade attempt. I do use discretion entering trades; I don’t take all crosses above 80 and below 20. I do watch volume levels to determine if crosses have sufficient momentum to hit my TP.
I don’t want to sound like a broken record, but a strategy with such a bad RR ratio should not even be considered. Yes, you might get lucky for a few trades, but your capital will most likely be wiped out in the long term. It’s like picking up pennies whilst behind a steamroller.
Imagine if you lost 3 trades in a row. You would have to win the next 30 before you would even break even.
Please don’t be caught up in the “conventional wisdom” that causes 95% of all forex traders to become losers. Trading with the trend and pocketing small profits can quickly grow. Think of the 30 pip stop loss (now 20 pips) as a failsafe protection. There are many ways to determine when to bail from a losing trade with much smaller losses. More tweaking to be done…
Thanks for sharing your strategy gere with us at babypips. I am actually working on your stochastics theory to see if its similar to mine in which I use 5,3,3 on slow stochastics. Is your setting base on the slow stochastic or fast stochastis ?
It’s working well,a pretty slow week so far.And i have also decided to take trades that are in the same direction of a 55 period sma on an hourly chart.So in essence,i go long when the crossover is going up, and the price is above the sma, and vice versa for a short position.
I agree with a previous poster, this won’t work in the long run. You can create a simple stochastics EA in MT4, put in the rules you mentioned that you used and let it run for a couple months/years of historic data and see that it doesn’t work out.
From what I can tell your system is based on hard rule sets(when X crosses Y on indicator Z). That makes it easy to model since there are no objective components to it. Because it has a hard rule set, if this fails on a back test what would cause it to be successful using it live? I know stochastics doesn’t work because stochs and MA systems are usually the first systems that people test. If they worked then nobody would create the much more complex trading systems that exist. Generally markets are too complex to find predictable patterns using a basic stoch rule set. You can create more complex rule sets that involve more indicators that are successful, but they don’t trade often because they look for such specific criteria. I have written a couple such rule sets as EAs that have produce successful results in multi year back tests. I have threads dedicated to them in the EA forum.
I’m not saying rule based systems don’t work, but this type of system won’t.