I am in search of a good manual system that will be suited to my lifestyle. I have a job and am a father/husband, so my time is limited, but I am obscessed with finding a way to supplement my income.
I have tried automated systems but want to close the door on that for good as it was leading nowhere. Ideally I would like if someone could help me find a system which generated a good/stable income to supplement my existing income.
I am not looking for extravagant/ridiculous gains or one that makes us of many indicators. The simpler, the better. I just want it to supplement my existing income.
I cannot trade full time and can only trade the following times :
South Africa is GMT+2
The London/US is in session during my time of being awake, hence then I can be involved.
I have an hour or two before work (an hour or two before the london session opens). By the time the London session starts I go to work.
During my day, I have about 5 bouts of 10-15minutes each, which I can use. I also have a lunch hour.
I go to bed when the US session closes.
Google is full of get-rich-quick systems, but I am not looking for something like that. I am hoping to find a more serious system here or be pointed in the right direction.
I am currently enrolled at the school of pipsology(very well prepared btw), and everyhing I thought I knew is now background info. I always thought I knew a thing or two, but boy, was I wrong!
I have thoroughly researched and applied automated trading the last few (+/- 4 years or so) but sadly have nothing to show. Yes there were good times, but they were erased by bad trades. Always the 3 steps forward, 5 back move. I somehow clinged on, believing one day I will come across the hg. What a waste of time! I wish I had come to my senses earlier.
2 suggestions for you.
First is the 3 ducks system, there’s a thread here. Very simple, a set it up and leave it system.
Second is described in my own thread “Balls Of Steel”, basically looking for long term trending pairs that have volatile daily movements so you have to either use a very wide stop or no stop at all while you wait for the trend to move in your direction. Its not for everyone, but once you get used to it you can set your TP and forget about it
You can trade trend following systems on weekly charts and make your updates one time per week in less than an hour profitably. Take the following system:
Enter positions on breaks of the four week price range away from the 200 day moving average with a stop loss just outside the opposite side of the range, as the opposite side of the range moves with your position groom your stop each week to stay just a pip outside the range until it is taken out for a profit or a loss. This is Richard Donchian’s old four week system. Run that system on as many pairs as you can in order to make certain you will be in any pair that has a good trend. Risk a total of 12% of your trading capital on all pairs (if you are trading 50 pairs, risk 24 basis points per trade; 12%/50=0.0024%).
Systems like that make money and require just an hour a week and will not matter the time of day that you update your orders. The best time would be Sunday nights, if I am correct your local time is 11:00PM when the forex week begins on Sunday night. Once a week, you could update your orders before bed beginning at 11:00PM on Sunday nights
You can also trade other price ranges (10 weeks, 15 weeks, etc.). In fact it is a good idea to trade a few systems simultaneously in different accounts to make certain you catch the big moves and don’t get chopped in sideways expansions and contractions of the price range.
And if you find yourself unable to take position sizes small enough to risk just .0024% per trade, get another dealer that allows smaller position sizes such as Oanda.
I have given this a go. Unfortunately the week is already halfway, and it has missed a few nice trades. I am battling a bit with understanding/setting up the MA. How many periods? How does it help filter?
Another question… Is the sl placed just outside the range of the last candle/bar or outside a range of the imaginary 4 week candle?
Sorry, I tried finding the system on google, but it is not very detailed.
The 200 day moving average is used by a very large number of traders throughout the world but you can use a slightly different one if you choose. What you are looking for is MDMA: a medium denomination moving average (that is my own term). The reason the 200 day moving average is so widely used is precisely because it is a medium denomination moving average. All the MDMA tells me is the direction of my trade, I only trade in the direction away from the MDMA. So if the price is above the MDMA I will only trade long and if the price is below the MDMA I will only trade short. The MDMA does not give entries or exits in my implementation, it only gives the direction of trade (long or short).
Donchian used what were ultimately called “channels” known today as “Donchian Channels” or “Price Channels”. He entered into trades when those channels were broken in the direction away from the MDMA and closed trades when they were broken in the direction toward the MDMA. This method, I call Donchian Method Trading or “DMT”. I explain how to place the entries and stops and how to groom the stops as the trade progresses in this blog post with a video.
The short answer is that I enter if the price moves a pip outside the channel away from the MDMA and I exit if the price moves a pip outside the channel toward the MDMA.
While MDMA and DMT give me the direction of trade and the entries and exits, they do not give me the position size or tell me what markets to trade. I try to follow the advice to choose “Position Sizes In Light Of Consequences Your Buffooneries Imaginably Net” (PSILOCYBIN, pronounced: silo-sigh-bin). The question of position size selection is the most difficult of all, that is where we must spend most of our time and effort.
Check out the thread about Donchian’s methods here.
I am genuinely intrigued, my search for a good manual system seems to be over. Thank you for that! Please help me get it set up and working 100%. I have looked all over for a good donchian channel indy, there are quite a few, but the settings… I am not getting the hang of that so well. I have read quite a few articles on this strategy, some prefer to trade daily, some weekly - I would like to go both.
A daily/weekly chart
A 200 ema for daily and 40 for weekly
Both is certainly a good idea. In fact, most systematic trend followers trade multiple systems simultaneously (and I do). You can trade a daily, it could be anything from a 7 to a 15 day channel. And then you could also simultaneously trade weekly channels between 4 and 52 weeks or so. I trade a 10 day channel, a 4 week channel, a 10 week channel, and a 20 week channel. The easy way to do that is to trade each system in a different account. Better yet, try to trade them all with different dealers entirely and spread your 3rd party dealer risk out.
The key is not to select “the best channel”. “The best channel” in a group of backtests is simply the one that did the best given that historical data. If you trade that going forward you will likely not get the same result. So instead of picking “the best channel”, we can trade a few different ones and spread out our risk while giving us more opportunities to profit. There may be periods wherein a market moves sharply for a couple months and then sharply the opposite direction for a couple months. A four or five week channel system will get in early and take profits deep but a fifteen or twenty week channel system will give back most of the profits. Then, there may be periods where a market takes a long slow trend over eighteen months kicking the four week channel system in and out and in and out many times and generating little to no gains while a fifteen week channel system stays in throughout the bumpy ride and captures most of the trend. So the solution is system diversification.
We don’t know the future. We don’t know which if any pair will have a big move this year, we don’t know the direction it will move, and we don’t know what system will capture that move. So we trade as many pairs as we can in whatever direction our filter tells us with a few different systems to make certain we manage to snag the big move when it comes.
Thanks Adrian, will follow suit. I will move on to a few more channels whenI get he hang of the original 4 week system.
All I need now is the DC indy and settings then I can get started. I have done it manually, got the 4 week high and lows and placed my orders according to that, but it will be so much easier if I had an indy that can plot buy/sell/sl levels. Can you help?
Donchian Channels are available on many platforms but are remarkably missing on a great many also. I use fxTrade with Oanda and it does not have Donchian Channels. So I have to simply trade without the channels. It is actually easy. But with FXCM’s Trading Station platform there are Donchian Channels available and they are nice. MT4 has DCs too.
I started years ago with FXCM’s TS. I liked the platform, but because of automatic trading went to mt4.
I was looking for an reason to go back to TS, so this will be perfect. Thanks.
I forgot how user friendly TS is compared to MT4.
Wow, this morning was a trip down memory lane. A friend who went on a training course in FX 15 years ago taught me all he learned at the course and we started trading very small in TS.
It lasted for a year or so… Failed horribly, gave up. Then a few years ago I tried again. Now there was something called automatic trading, and it really hit the markets, it really fuelled the belief of so many newbies that they would become millionaires if they just bought this or that… it was like returning to mos overgrown castle. I too was sucked into believing automated trading was the way to go.
Became quite good at backtests and identifying scammers.(forex is so full of them) Tested many EAs.
Luckily didn’t lose too much - mostly on cent accounts, wanted it to work 100% before investing more. I was determined. I put a few (0.01%) of all the EAs I tested on live… All went well for a while, but it was always 3 steps forward and 5 backward.
A while ago I gave up. I was down in the dumps, I wanted to give up on FX completely. Then I thought I’d try manual a bit and came here to ask if you could recommend anything.
I don’t want to become stinking rich out of FX. The belief of sipping margaritas on my own yacht were in my newbie days. I just want something to supplement my existing income.
Question time…Please clarify… Where do I put sl? I have watched the video on Arbitage trader on Acid’s video, maybe I should watch it again.
Do I understand correctly: Say for instance I have a 4 week chart open. My trade is triggered in a downtrend. The stoploss was initially above the last candle. How do I groom? Do I move once a week to the new weekly’s range?
After a bit of trading, I seem to understand it better. The 4 week trade on breaks is a variation of the DCT.
It was confusing for me, mixing the two and trying to make out head from tail. I think I have it now. Thanks again.
The stop should start above the high (including the wick) of the highest candle of the last four candles and should be groomed once a week to a pip above the highest high of the last four candles. Some weeks there will be no grooming, others you will be able to move the stop a lot.
I just wanted to make sure you were aware it’s possible to automate trades on Trading Station as well as MT4. Also, with your FXCM account, you can access MT4, Trading Station and Mirror Trader (all 3 platforms have trade automation capabilities) with a signal account login, so you don’t have to choose between platforms to meet various trading needs.
Thanks once again for introducing me.
It seems that the most difficult part of this system is to do nothing at all. Cut loser short and let profits run. Watch winners turn into losers and then (hopefully) back to big winners…