I realise this is a bold title for a thread given that this is my first post but I’ve been a silent participator in trading forums for a number of years now, in addition to having being involved in the trading game as an independent trader, a commercial broker and an introducing broker (although not all at the same time!). For a number of reasons, now feels like the right time to start contributing to a couple of my favourite forums in the hope I might be able to bring something constructive to the party.
With a goal in this first post of keeping as much transparency as possible without wasting too much time building unnecessary suspense, I’ll outline that I have to two aims for this thread:
- To draw attention to the significantly positive impact that claiming trading rebates can have on your trading balance.
- To encourage discussion about a sound method of trading I term ‘IRP trading’, shortened from ‘intraday-retracement-pattern trading’ or ‘intraday-range-pattern trading’, whichever you prefer.
Now, before I get to the “including results!” part in the thread title (which, admittedly, was thrown in as a bit of a hook), I want to make clear that I will likely refer back to blog posts or general information on my own trading website in order to supplement shorter posts on here. This trading website does indeed provide a rebate service that lists in excess of twenty brokers but it’s important to get across that I am absolutely not posting here in order to try to sell something down the line. If you do visit the website and take advantage of any of the free rebate offers then that’s great but if it isn’t for you then that’s fine and I wish you the best. All I ask, ever hopeful, is that if this thread does get some traction then we can keep it constructively civil for the sake of those who are interested.
Ok, let’s move on to IRP trading. The overall concept here isn’t by any means a new concept but rather a method of trading that I personally love and that is surprisingly lucrative if traded properly, yet I haven’t come across too much in depth discussion about it. The method generally avoids trading during the height of the European and US sessions but rather focuses primarily on trading the ‘chop’ around the open and close of markets, in addition to trading the overnight consolidation, by simply trading around a moving average.
As this post is already starting to get a bit long, it’s probably about time I backed this all up with some stats, so I’ll sign off for now by taking an excerpt from [B]‘The PloChop System’[/B], a piece I’ve recently posted on my blog [B](the full article elaborates the thought process, the financial implications and includes seven years of results)[/B]:
[B]Rules of the PloChop system[/B]
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Open a 15 minute EURUSD chart and apply a set of standard Bollinger Bands (Bands Period = 20, Bands Shift = 0, Bands Deviation = 2.0).
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Only open a trade at (UK time) 06:00, 06:15, 06:30, 06:45, 07:00, 07:15, 07:30 or 07:45. Do not open at 08:00, when the London market opens. Please note that most MT4 charts are on Cyprus time so, if you are using such charts, the corresponding time range for opening trades is between 08:00 and 09:45.
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Only open a short (sell) trade once there has been a bullish close outside the upper band, followed by a bearish candlestick. You open once the first bearish candlestick is completed, except where the candlestick has touched the 20SMA. If the first completed bearish candlestick touches the 20SMA, the set-up is cancelled and you wait for another bullish close outside the upper band to start the process over again.
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Only open a long (buy) trade once there has been a bearish close outside the lower band, followed by a bullish candlestick. You open once the first bullish candlestick is completed, except where the candlestick has touched the 20SMA. If the first completed bullish candlestick touches the 20SMA, the set-up is cancelled and you wait for another bearish close outside the lower band to start the process over again.
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Set a standard stop loss of 20 pips (or points) for each trade. Please note that sizes of stop losses are crucially important to the outcome of overall end results and you should make them your own. We’re using set stop losses at 20 pips here for the purpose of results.
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Only close a trade once the price has closed back across the 20SMA (unless you get stopped out first, of course).
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Multiple entries in the same session are applied, except when a trade is stopped out. Sit out for the remainder of the session if a trade is stopped out. It is very rare for more than one entry to trigger per session.
*The charts above are GMT+2, therefore the London open is at 10:00 rather than 08:00.
[B]The Results [/B]
As it is March 2015 at the time of writing, I’m going to list a set of full ‘pip’ profit (or loss) results from the PloChop system for EURUSD in January and February of this year. Results might vary slightly from one platform to another but, if you check for yourself on your own preferred trading platform (and you should take the time to do so), I’m confident there will be minimal difference. All results factor in a [B]‘1 pip[/B]’ standard spread charge.
January
Date / Result
2nd: +11.1
5th: +11.3
6th: +13.2
7th: +11.2
8th: -20.0
9th: +6.9
12th: +3.0
15th: +13.6
19th: +10.9
20th: +2.7
21st: +13.5
22nd: +22.8
26th: -20.0
27th: +11.1
28th: +23.3
29th: +23.2
30th: +12.8
February
Date / Result
2nd: +11.7
4th: +14.5
6th: +5.5
9th: +2.1
10th: -20.0
18th: +18.0
20th: -20.0
24th: +6.2
25th: -20.0
[U]Total pip profit (or loss) for January and February = [B]+148.6[/B][/U]
Cheers for now,
Alasdair
