After I missed my chance to make $4, I saw a setup on EUR/USD and opened the trade.
I set my TP like I normally would but then decided to do something that I have done before with bad results. I decided to set my SL in at a level contrary to where the strategy said I should.
I was supposed to set it at the first red line in the picture but I didn’t and where I ended up setting the SL, it got hit but the way it did just made me even angrier.
Price came to it and hit it but that EXACT second it hit the SL, price started going down and it went so far down that it hit the level where I had set my TP
I see this as a message from God telling me to stick to the FREAKING STRATEGY
This happened yesterday when I accidentally opened trades on two different markets on my demo account and on one of them, the zone didn’t fully form and I entered anyway. Price hit the SL I had set randomly the went in the direction I wanted and hit my TP
So instead of me having a profit of around $7 today, I have made a loss of $1. This may not seem like a big deal but what if my capital was larger and it was a profit of $7000 instead.
Now that I’m done rambling, I believe we can use this scenario as an example to understand that if you can’t trade following YOUR rules that govern YOUR strategy using YOUR money, you will need to find out why that is and if you can’t solve that problem, you should stop trading till you CAN solve it.
On the bright side, the strategy has proven to be profitable in backtests and live trades -
Hello, I’m almost finished with the beta version of the EA, but I have a question, will buy only a downtrend (M1)? In a previous screenshot you executed a buy in an uptrend (M1). Another question is, what about TP?
I was just waiting for the other conditions to be met before I entered the trade
For a buy trade, the TP will be set at the difference between the current price and the level of the down fractal. Let’s say if the difference between the current price and the down fractal level was 69 point, you will also set your TP at 69 point. It’s a 1:1 R:R trade
I saw a setup on EUR/USD and GBP/USD and I didn’t feel like taking the trade on my real account since my emotions had already been on a rollercoaster ride today, so I opened the trades on my demo account
On the EUR/USD trade, I manually closed it because I thought the market had finished going down and was doing the thing we all hate as traders where it just barely misses your TP, after I did this, the market kept going down but it started going down when news released.
Maybe, just maybe, the strategy can predict NEWS
Also, if I had taken all my trades and set my TP and SL according to the strategy, I could have made somewhere in between $8-$10 today
I was afraid this would happen, as I have tried to make an EA based on this strategy myself before but I discovered that I would need something to make something that was capable of things an EA can’t do so I abandoned that dream
Ran another backtest but this time of GBP/JPY.
Out of 99 trades, 43 were losses
During this backtest, I had my longest winning and losing streaks ever
Due to this, I only ended up making ¥4,561 which converts to $29.65.
I think the strategy is starting to show some weakness here since it probably won’t be profitable on markets where M1 candles can a thousand points
So, I miscalculated something.
So originally, I thought that when the quote currency (the second currency in the pair) is the same as the currency of your account, 1 point movement is equal to $1 in you account if you are trading 1 lot. Using this analogy, I thought that 1 point movement on GBP/JPY would be 1 yen.
Today, I began wondering why would 1 point on GBP/JPY be 1 yen if the pair is so popular so I did some research and discovered that PIPS and POINTS are not the same thing.
I actually saw this on baby pips where points are called “pipettes” instead of pips but I chose to ignore it.
In reality, 1 pip on EUR/USD is actually $10 and 1 pip on GBP/JPY is ¥1000.
I checked the point value of GBP/JPY and it is ¥100
Another day, another backtest. Each one is always better than the last and this one is no exception.
Out of 101 trades, 28 were losses which means this backtest had a win rate of 74%. My highest so far
I did this backtest on USD/JPY and I held the longest position I ever have. A whole 7 HOURS
Also, I’ve discovered two key weaknesses with the stategy 1. It sometimes misses amazing trends
2. Most of my losing trades where opened at the bottom of the trend. If I open a buy position on an uptrend, the uptrend has lost momentum and starts going down
I also had my longest losing streak of 14 TRADES which amounted to $939 but immediately after that, I had my longest winning streak of a mind blowing 18 TRADESwhich amounted to $1411.
It’s a post-retracement, trend-resuming strategy, then.
Many successful systems are.
What’s so unusual about this one is the enormous difference in timeframes between 1 day and 1 minute.
People trading methods like this are much more often using something like 4 hours and 2 hours, or 3 hours and 1 hour, for the slower timeframes (normally two of them, not one) and then 10 minutes or 15 minutes for the entries. So you’re really taking it to extremes!
That’s not a criticism, of course. You may manage to make it work, but I think your results are very likely to be a lot less swingy and more stable, if you make your relative timeframes less far apart.
Am I the only one confused about timeframes, here?
You’re referring to four different timeframes in that post (daily, M1, M2 and M10) but I think you only ever show two of them? Sorry if I’ve missed the point, somehow, but which timeframes are you actually using for bias determination and trade entries, please?
I use M1 to watch the chart and wait for confirmation
I use M2 for confirmation
I now use M6 instead of M10, and I also look confirmation
I use the daily timeframe to identify the market trend
Main line of stochastic is above signal line on M2
Main line of stochastic is above signal line on M6
Wait for the candle to close on M1 and immediately enter a buy trade on the next.
Set TP at a recent MA cross and set SL at the bottom line of the zone
Thanks very much for explaining and illustrating all that about your timeframes - making more sense to me, now. I wish you good luck with it, of course!
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