Hi traders. Welcome to my channel - YouTube
[B]I have updated post to clarify the Slingshot strategy & filters I use.[/B]
I have only recently found out about the Slingshot strategy on youtube. Please watch this video first before reading my rules/filters I’ve added to this strategy - Forex Trading - SlingShot 30M 100% Mechanical Scalping Forex System Part 1 - YouTube. After some research I found a thread on Babypips & also forex factory which eventually died of death. For some reason I was intrigued by this strategy because of its mechanical simplicity & contrarian approach to trading the markets. Now we all know that around 95% of traders loose money give or take a few per cent & most of these follow the trend. Well isn’t that what you’ve all been taught “The trend is your friend”. So why are the loss percentage’s so high? Its got to be something to do with the crowd of novice traders falling into the same trap. Now I wont go into detail about this but what I want is to find a way to trade the markets that does not follow the crowd (hence “Contrarian”), that has no emotional control & is 100% mechanical.This doesn’t mean counter trend either, but something different to what everyone else uses & more importantly…Believes in.
[B]Lets talk briefly about belief.[/B]
For Me, belief is the most important trait to successfully following your strategy & becoming a professional trader. Without belief you wall fall at the first sign of a drawdown. So how do we really believe in our strategies, or someone else’s for that matter?
[B]For me there is only two ways.[/B]
[B]Faith[/B]…but that doesn’t seem to work, well not for long. I would say 95% of trader go by faith. Sounds familiar, ummm 95%.
[B]Belief[/B]…by putting your strategy through a rigorous back test (or possibly a forward test) which could take years to know for sure) to see how robust it is over hundreds of trades over many years of data proving that following the rules of your strategy through wins & losses builds your account up over time. Two step forward, one step backwards. I call this the Hoover test. Think about it…
I’ve personally tried forward testing but I do believe this also comes into the category of ‘Faith’ too.
So the only way to know for sure if a strategy is profitable is to make a scientific journal of my live account & also to record all back testing data so I can see if this is consistently profitable over time. This will take time & effort. Once the data has been recorded & proven to be profitable, I can then have the belief to follow my rules. I will also have plenty of recorded data to cross reference any new rule’s or filter’s I may add, before using them live.
So far I’ve recorded some initial back testing using Daily, Weekly & Monthly bars to see if there is an Edge to this strategy. So far the answer is YES. Even though this strategy is extremely simple & originaly used for scalping using a 30 min time frame, many have added rules & tinkered with the strategy but with no back tested data for credibility. I saw potential in the original Slingshot & wanted to add my own rule’s/filter’s to increase the edge.
The rule’s added so far are:
1/ I only take setup bars that close within the 40% of the top/bottom of the bar/candle. Any close within the 40 to 60% will be a void setup bar.
2/ If price opens & moves to the opposite high/low of setup bar or breaks the opposite high/low of the setup bar before valid entry has initiated, then that bar is invalid.
There are two trade management’s that im currently back testing:
1/ Exit only where the entry candle closes. (Original)
2/ Use trade management which again is explained on one of my video’s. Slingshot Live account 14 FEB 2014 - YouTube
So far there does not seem to be a great deal between either but I have plenty more back testing to complete before coming to a final conclusions. The main thing is both seem to be profitable.
Currently I am trading my live account - using original exit (close of entry bar).
I did use trade management for a week on my live account but I could not get to my charts due to work so have now gone back to original exit to keep my trading 100% mechanical.
As for back tested data:
I done an initial back test on the weekly bars Slingshot GBPUSD 2001 to 2002 Weekly bar back test - Trade management applied - 69 5% profit - YouTube to see how well this strategy performs over the long period & to my excitement it worked very well.
I dont believe in trying to filter out all losses as this is part of the game, but I do intend on maybe tweaking to squeeze a better overal yearly profit, but that will come in time with experimenting & plenty of cross reference back testing.
Im currently live trading all the majors & four cross pairs, a total of eleven pairs, across Weekly & Monthly time frames. This has enabled me to take the full advantage of this incredible & simple strategy by smoothing my overal profit/loss without the human emotion or ego taking control. I get plenty of trades to satisfy my thirst of trading & also allows me to continue my full time job.
Please feel free to contribute or ask any questions.