Review my system

Beginner Questions
1

Didn’t know whether to put this in the newbie section or somewhere else such as the trading system section as i’ve only been demo trading and reading upon forex for roughly 2 weeks. In no way shape or form am i saying this does work but i do want opinions on it and see if i’m going in the right direction. Anyway, here it goes…

The system consists of a 4hr timeframe, using MA’s, stoch and RSI. I’ve gone way back throughout the year looking where i could trade using the system and it seems to workout well. As for what pairs to trade, i’m not too sure. But, I have noticed that GBPUSD is definitely the most successful with a 100% success rate (I think) from the past 7 potential trades.

How it works
There are 2 moving averages, one of which is 60 and the other being 130. Stochastic and RSI are also needed at there default settings. Stochastic being 5,3,3 and RSI being 14.

When to buy
You simply buy when the stochastic and RSI both signal that they are oversold but you must buy it against the direction of the 60 MA.

When to sell
Simply the opposite of when to buy. When the stochastic and RSI signal signal that they are overbought you must buy it against the direction of the 60 MA.

Now you’re wondering where does the 130MA come into it? If the 130MA line is closer to where you want to make an order (buy or sell) than the 60MA line, then you do not make an order unless the 130MA line is moving in the direction you want to by or sell rather than against.

When to T/P
When it touches the 60MA again.

S/L
Honestly i’m not too sure.

Here are some pictures of where you could make an order.

Screen Shot 2015-12-10 at 16.36.34.jpg350×700 30.7 KB

Screen Shot 2015-12-10 at 16.37.43.jpg261×700 24.6 KB

Both were GBPUSD, Red line is 60MA and Blue is 130MA

I put this here in order to get peoples thoughts so i can learn as fast as I can. Literally made this about 3 days ago and been tweaking it since here and there. only tried it on the 4hr chart. I looked at the pairs GBPUSD, USDJPY, AUDUSD and EURUSD and marked out 27 potential trades, only 6 of which being a loss. Although 3 of them were small losses at roughly -5, -15 and -30 pips. 4 of the losses come from EURUSD which i looked at 7 potential trades. Most profits come at 100+ pips per trade. I have a trade open right now on EURUSD for +70 pips which i guess is kind of ironic considering it caused me the most losses.

I also have the dates/pairs and potential profit/loss of all 27 trades if anyones interested.

2

Hi Luke,

It’s great that you’re seeking out feedback on your demo trading.

In order for your strategy to be complete, you need a plan to manage your losses. You said you’ve closed some trades at a loss, but I’m not clear on what made you decide to close out at that point.

Am I missing something?

3

Hi, sorry if my explanation wasn’t too clear, not used to writing this sort of stuff up.

These are simply potential trades. I looked at the last 7 potential trades i could of made using the strategy by looking at the history of the graph with the stated pairs(GBPUSD, USDJPY, AUDUSD and EURUSD). Is this reliable? Obviously live trades would be more reliable but i want to make use of what i’ve got right now to see if the strategy can work out.

As for my S/L, i wouldn’t know where to put it with my given strategy atm and thats where i would like to develop it further.

I’ve been testing it and i feel it works a lot better with the 4 major pairs. Other pairs seem hit and miss.

Hope this makes sense and thanks for your input.

4

For some reason this strategy doesn’t seem to work well with EURUSD and i’m not too sure why. It feels like it’s on the constant decline and doesn’t meet the 60MA for a long time for me to TP

5

good strategy

6

Here’s some info to help you with that: Setting Stops 101

It’s my pleasure, Luke :slight_smile:

7

I think that using Stochastic and RSI in same strategy is not the best idea since both indicators shows pretty much the same values.

8

Get rid of indicators and think about why the market is crossing your MA at this precise level.
Why RSI/Stoch is at the extremes at this level.
There is so many redondant information that you will just mess this up.

Keep it simple, the less the better.