Hey Everyone,
I’ve been working on my trading plan, testing it, and this is what I have. I’m concentrating on breakouts in the USD/CAN pair (I’m Canadian, if one wonders my choice of currency pair:)), for either long or short positions, which are indicated by, my trading plan
- 1hr Chart
- Cross over of SMA (9, 18)
- Cross over of the MACD
- RIS (10 periods) cross the 50 level
This systems works well, back tested about a month, with a little tweaking to catching trend changes earlier, it could improve. Two examples of where it works attached.
However, attached is another area where the above conditions are met in several places, but the trend reverses quite quickly, without any chance for gain, and possibly even loss. One example is around Dec 03, 1pm. My system doesn’t account for likelihood that the trend will indeed continue, sufficiently long to make some gain. I understand that I haven’t yet included fundamental analysis yet.
I was hoping to get a suggestion on what indicator, if any, I could add to detect these weak break outs. Comments on how to improve the system when it works would also be appreciated. I’m going through the pipsology school trying to improve it based on the concepts, but maybe an expert will see something I can’t.
Thanks
Update - February 20, 2010
I’ve decided you use this thread to log my trades, and discuss my reasoning for entering the trades, and my thoughts about it yada yada. I’ve been demoing for about a month now and of recently become profitable (i.e. net change is profitable).
Update - February 18, 2010
A lot has changed since I posted this trade system. I’ve learned a lot, and have a bunch trading tools in my box.
I trade only on 4hr or day charts, though I will use the 1hr to find better entry points.
I have found all I need are the following indicators:
LWMA 10, 20
Stochastics (14,3,3).
Valid cross over has similar conditions as the HLHB system.
I use this to determine a valid trend change, although these past several days, having found a valid entry point. Been making demo pips through broken supports and resistances, retracements and the like.