My trading system works on trending market but not on ranging market

I’ve backtested my strategy, which produces like 0.5% roi in a certain year, and some were negatives roi.

i believe that forex market is due to randomness. If trading is easy, then the math experts out of the world( in Singapore,Russia,us,China) will become millionaires right now by trading forex.

Unless you’re George Soros, with an amount of money that is enough to rob the bank of England, you’ll never make money

Good. Now you know your system never works on ranging market, look for trending market and avoid ranges.
Try re-backtesting the strategy on trending market only if you would have a much better ROI

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Is it possible to share the strategy? Is it a combination of indicators type of strategy (A+B=C)? Or does it have some logical reasons behind it?

Yes. I do believe the market is random most of the time. But, there are certain times where the market doesn’t also and it’s around where the big boys take their actions (opening hours, news events, etc.).

True. Trading is hard.

He’s definitely on another league. We as a small guy in the market, our role is to follow price. That’s the only thing we can do. And unfortunately, it’s also very hard for us to enter at the very beginning of the trend and hold it until at the end of the trend because we never know what the big boy is going to do so never expect that we can do it this way. Hence, why we need some sort of confirmations to enter our trade. And you get ride it for a bit. But, not the entire trend. It’s not possible because like I said, we never know. Unless, the big boy calls you and let you know what they are going to do. But, even then, it’s insider trading. It’s illegal.

Wow, your comments completely blow my mind.

However, how do you identify a trending/ranging market?

The entry/ exit strategy are important as well, which point of reference do you see as a good point to enter? Like how do you know where is the beginning of the trend that is a good point to enter?

If your strategy really does produce 0.5 percent profit per year, do not trade it. The risk is too high for the return.

Use the site or the internet to find a trend-following strategy that has already been developed and which is more reliable.

The one I’m using is by caroline Ayuk.

Basically it uses 8LWMA,10LWMA, fractals and OSMA.

Buy when
8LWMA is located above 10LWMA.
Low of the candle is above 10LWMA.
Osma shows positive value.
-if the price is less than 60 pips from 8LWMA, enter directly. If the price is more than 60pips away than 8LWMA, but a pending order with 60 pips away from 8LWMA.

I see. This is what I called A+B=C type of strategy. It’s a very static and mechanical style to apply in a dynamic market. From my personal experience, you need to identify if the market you’re trading with is in demand/trending market. Once you have identified that the market is hot, then look for the entry using the above mentioned strategy (could be any strategy). I think this would make your edge have higher chance to success since the direction of the market is in your favor anyway. But, you must learn how to identify a market that is in demand first. You can start researching if the market you’re watching is have the ability to make new highs or lows first.

Secondly, what you can do is to visualize your ideal trade should look like and then manage it accordingly. For example, say my strategy, doesn’t matter how I enter, but once I entered, what I’m expect for the price to do is to surge almost immediately in my favor because this is my ideal trade should look like. I planned for this. If the price action is choppy after I enter, then I would manage my risk by either adjust my stop loss to break even, remove partial position size or even abandon the entire trade altogether.

I know what I said may sound very complicated. But, once you’ve a bit more experience (I don’t know how long you’ve been in this industry), then all would suddenly make sense.

And remember, no matter how is your entry method, if the market you’re trading with is not hot/in play/ in demand, that entry method would fail. Very likely. Because the wind is not backing you up. I hope it makes sense.

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Trend following strategies will not work on ranging market, it is a different market conditions. You can filter range market with adx indicator , but profitable long term trading is a trading via portfolio of strategies not one strategy.

From this image attached below, you could possibly tell which is trending and which is ranging.

And on knowing when a trend/range is starting or ending, that’s a very tough question to asnwer.

But as regards my strategy, i don’t try to make things complicated, i determine the market direction (trend/range) from higher timeframes and go to lower timeframes with support/resistance, supply/demand zones to see what’s happening in keyzones.

After identifying keyzones and figuring what the market is doing, i check for impulses and volumes using popularly known basic indicators.

With these, i decide if a point is good for entry/exit.

You can figure it out yourself in terms with your strategy, and i will say this, “never make it complicated”.

One simple technique is to define your trading time horizon in which you make your market entry. Assuming your strategy is to trade with the trend, not against the trend (said to be more likely to produce an overall edge), the following is an example.
1 Get in the zone. Your trading time horizon is daily (D). Zoom out to the weekly time horizon (W). What is the trend on the weekly (up or down?)
2 Is the daily for yesterday the same direction as the weekly for last week? Yes - you are in the zone of your setup.
3 Define when your entry is going to be. Zoom in to the 4 hourly time horizon (4h). Define which time you intend to enter and it will be just after the close of the most recent 4 hour candlestick. If it closes with the D and the W trend, enter the trade. If it closes in the opposite direction, wait till next candle that closes in the same direction as D and W.
4 Other rules will increase your success likelihood but reduce the number of opportunities. Eg. check if there is any market news likely to be announced within your trading window (in this example, daily), is the value close to a round number (forex or stock value), are you close to Fib level numbers (crowd reaction).
5 Edit - before you enter you should have already pre-set your stop loss and take profit and they should be related to some repeatable parameters, such as (eg 1.5ATR for stop loss, 50% TP). As you backtest with more and more filters on conditions you may find your success rate could get as high as 80%, but with very few opportunities. This is what led me to a ridiculous time horizon (one to three months) which depending on the observer, could be construed as investment not trading. I do not differentiate between trading and investment because the objectives and goals are the same, and very simple. I learned this from a 21 year old builder millionaire at a management course in Surrey thirty years ago. He said the reason he was able to make a million pounds in 3 years in his own business is because after every job, he needed to be sure he had more money in his pocket than when before he started the job. He had 10 direct reports, and 100 builders in his overall team. Anyone who had a site accident had to leave the business - no exceptions. Success depends on the participant, the rules they set and the cumulative result of their trading or investment endeavours. Of course it’s not easy. but its a lot of fun.

Good luck with seeking your greater expectancy.


Hey sir, I have a question to ask you if I didn’t ask I might regret it for the rest of my life.
Would you like to be my mentor?

Hey sir, I have a question to ask you if I didn’t ask I might regret it for the rest of my life. Would you like to be my mentor?

What do you think a mentor could do for you that you cannot do yourself by participating in a forum like this and with the knowledge of the universe available to all on the internet of today?
What would you be able to do in return for the time that your perceived mentor would spend one on one with you that may encourage anyone to mentor you, as opposed to the other 8 billion people on the planet? Do you have any notable skill or experience in any other field of pursuit?

It’s good to ask, but to most people that will be construed as Me, Me, Me. John F Kennedy said this very well in a 1963 speech. Ask not what your country can do for you but ask what can you do for your country. The first half is a glass half empty approach, the second half is a glass half full approach.

Think deeply about my words. I have mentored about twenty two people in my life by choosing who is worthy of mentoring. I have had probably ten or twenty times that number ask me without knowing me or themselves before asking. Of the twenty two I have chosen to mentor, I have sacked sixteen of them because they didn’t have what it took to be worthy of mentoring. I hope this response has been useful.

Edit: This statistic to date would not put you in a favourable light for your request. Posted 3 hours ago

Joined May 3, '22

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