My trading system

Hello everyone

Well, I will show you my trading system. It works for me, I hope you give me some ideas for improve it or changing things for better results. First, my results are a profit factor of 60% approximately and a risk to reward ratio of 1,5.

I work with Weakly and daly charts for analysis. I put the levels of resistance/support and then I trade in the H4 chart.


  • RSI (14)
  • Bollinger Bands (20, 2.5)
  • ATR

What I look for is divergence in the RSI, price in one of the extremes of the Bollinger bands, and also near a level of support/resistance. Then I wait for a reaction of price: usually a pinbar or a change in direction.

When everything is OK, I put my entry on-stop with a SL equals 2,5 times the ATR and my exit point will be initially when price reach the opposite bollinger band. A lot of my trades are between 1 and 2 times my risk, but I also have some of 3 times my risk (not so often, probably 1-2 per month).

I trade forex: major pairs and crosses also. I usually have something like 30 trades per month.

This is a picture of 2 trades in the AUDUSD last days.

Well, that’s all !

Do you mean [B]160[/B]% (1.6)?

Systems with profit factors [I]below[/I] 100% are [i]losing[/I] money, Marco.

“Profit factor” refers to total wins divided by total losses, so you’d surely want that figure to be more than 100%? In fact they’re not usually expressed as percentages, just as numbers. I think probably you mean “1.6” rather than “0.6”?

Do you mean a “[I]reward-to-risk[/I]” ratio of 1.5, perhaps?

A “[I]risk-to-reward[/I]” ratio of 1.5 would mean that your stop-loss is 50% bigger than your target. It [B]is[/B] possible to trade systems with parameters like that, of course, if they have extremely high win-rates, but I don’t [I]think[/I] you meant that, because you also mentioned that many trades are between 1 and 2 times your risk? :15:

Are you doing well with it, overall? How often does the price reach the opposite band, when the bands represent 2.5 standard deviations?

Probably I am using the wrong words (not english speaking, sorry):

I mean:

60% of my trades are winners
the average winning trade is 1,5 times the size of the losing trade

It works ok to me, but it’s very slow, price goes to the opposite band with enough frequency, but the 1,5 RRR is not much. What I would like is to let the profit run and increase my reward-to-risk ratio. Because sometimes when I close my position, price still goes in that direction. I don’t like the way I exit my positions, I am trying to work on that.

Got it - many thanks for the clarification.

Your profit factor is good, then: it’s (6 x 1.5)/4 = 2.25 :slight_smile: