Hi Everyone!
First off, I really apprecaite everyone sharing their systems with me and now I feel I can give back to the community. I want you to bear in mind that this isn’t an original system, I’ve picked up bits and pieces from what I consider the best approaches to technical trading forex. I then assembled the different pieces and filled in all the questions I have ever had while trading. I would love any input by you guys because I’m still new to this but feel I have a solid understanding now. Let me know your initial thoughts and any way I can make this sytem even better!
I’d like to let you know my results:
Over the past three weeks that I’ve been using this method I’ve had 4 losing trades resulting in a total loss of 25 pips and I’ve had about 22 winning trades for a total of about 132 pips. I’m up over 100 pips for my first system I’ve ever developed. Not a great win to loss ration per trade, I usually risk 10 pips to gain about 6 pips, but my trades are very successful.
The reason I developed this system:
It seemed that every system I used had a bit of gray area about either the stop loss or the take profits, not everything was outlined. I got tired of the uncertainty and never knew when the “right” time was to execute a trade. This could be due to my limited experience or maybe some misunderstanding but I’ve finnaly found a way to trade forex and not be concerned about the unknown.
Okay Lets get to the point already!
My System:
Indicators:
Bollinger Bands - 10 period
(Smoothed) Moving Average - 14 period
Stochastic - 6, 3, 3
MCAD - 5, 9, 4
Time Frame:
15 minute
Pairs:
USD/JPY, EUR/JPY, AUD/USD, USD/CHF
Time:
8:30pm EST til Midnight
Most of my trades take anywhere from 15mins to 2hrs to complete, I’m usually done by 10pm EST.
Days of the week:
Monday-Thurs
How it works:
I watch to see the candles touch either the top or bottom Bollinger Band (BB). This touch can be the wick or the candle, doesn’t matter. Once I have a touch, I then begin to watch the Stoch indicator. I look for a cross in the lines. Once the crossover occurs, I wait for the candle to close. As soon as the next candle opens, I enter a trade in the current direction of the bouce (if it touched the bottom band and is moving up, I buy and vice versa.) When the order is made, place a stop at the wick of the candle where the bounce had occured. Your take profit will be right where the moving average line is located. I never have my stop more than 15 pips and my take profit is either at the MA or 10 pips, which ever occurs first. Sometimes I’ll leave the trade if the price stalls for about 5 mins near 2 or so pips before my take profit. Most of the time though, the MA take profit is usually hit.
If you look at the attached photo (My System Setup) you will see that (A) is my moving average, (B) shows the kind of bounce I’m refering too, © shows the signal in the Stoch, (D) shows the histogram of the MCAD declining which is an addtional confirmation of a short term trend change, (E) is the opening of the candle in which I would buy after the candle close where the Stoch triggers a trade, (The light blue line) represents my stop, and (F) shows where the price crossed my MA and I would have taken a profit of about 8 pips.
Things to remember:
While trading this system is that you need the market to be moving, not flat. View my other photo (Pointers) to get a better understanding of what I’m refering to.
Do NOT trade any time frame under 15 mins. I have bombed 3 demo accounts trying to successfully trade the 5 min time frame. 15 minute and above seem to work the best but I can only speak for the 15 minute time frame and the pairs i’ve listed above. The USD/JPY and the EUR/JPY typically trade the same but a greater pip movement occurs int he EUR/JPY so you can just choose to use that one alone if you like. I Like the USD/JPY for the US time frame whenever I get a chance to practice during a normal trading day in the US.
DO NOT force a trade, wait for the right circumstance. Like I said, stay out of flat markets, the conditions will present themselves and you will be profitable, just be patient.
and DO NOT trade around news! search google for forex economic news caldendars and such and avoid making the huge mistake of trading at news announcements. I allow 30 mins before an announcement and 30 mins after an announcement before I trade a pair that’s area just released some major news.
Finally, don’t get trigger happy and jump on a trade before the candle has closed with the Stoch trigger. More times than not, I’ve seen the Stoch lines bounce off each other and the trend continue in its current direction. Be patient and let consistent small pips be your friend. They compound very quickly.
Also,
I’ve included an excel sheet (Lot Calculator) to help you determine how many lots to use.
Just insert the values for the inputs ( for the “margin control” box, input the % margin you want to keep in your account to prevent a margin call. As you change this number it will raise and lower your risk %). Play around with it, I didn’t lock the calculations so you can give me some positive feedback on it if you like. Addtionally, once you add the inputs and adjust your margin control to a tolerable risk, go over to the “Orange” area and input the % of your account balance you want back in profits, that will let you know how many pips you need to achieve that goal. I shoot for 2.5%/Day personnally but the choices is yours.
Please let me know yours thoughts, I’m eager to hear them.
Lot Calculator.zip (10.8 KB)