Very conservative or too conservative perhaps.
I can’t see anywhere in the recent trend where EU would have qualified so that’s a missed 1000pip move for something that is trending strongly.
Again, simple rules like this might suffice but it’s never that simple.
Also, anytime a pair is above an MA for 10 days or more, it’s very open to the probability of retracing much further than that MA. EU has been okay on this but I can find plenty of apirs with stop outs for this method though I suspect you’d get back into the trade later.
San,
[B]or too conservative perhaps [/B] IMO YES!
I’ve been studying both the “FX-Ed” strat and the Ichimoku Kinko Hyo and I prefer the Ichi-cloud stuff over the “FX-Ed” strat.
For those that aren’t familiar with the Ichimoku, I’ve attached the PDF titled “IchimokuWiki”, it gives a nice clear explanation of the trading method.
IchimokuWiki.pdf (466 KB)
Ditch the indicators.
At the start of a session, whether monthly, weekly ,daily,hourly,etc.
if the candle is green then buy
if red then sell.
simple.
note the open high and low. people will be selling on the highs/ buying on the lows. of course breakouts may happen.
price may return to the open and resume original direction. so if the candle is green price may return to open. that is when you look for a bullish signal.
AUD/USD monthly started green, so i bought. two times so far price has returned to the open price (appx. .9050) and shot upwards. people are selling at .9131 (as noted by the candle shadows or sticks).
Try it on demo and you’ll see how simple it is.
LOL!
Okay, when do you determine “the start of the session”?
And ‘open price’?
Open of what? Daily? Weekly? Monthly? Quarterly? The next candle?
Risky strategy without some knowledge of price action, and some definitions resolved.
How long have you been doing this ‘successfully’?
You mention 2 times… Is that it?
Win loss ratio?
What is your money management setup?
So easy a caveman could do it…
Yes, it is easy this way. Try it on a demo, you have nothing to lose.
Have a look at AUDCAD or EURCAD and overlay the EMA on those Daily charts. That is the sort of trend I believe is being referred to. With more experience you could possibly take out the 200MA from the equation and trade some retraces like on GU and EU recently but then why would you need to if you could get in on a good pair like that.
I see the occasioanl retraces to the 20EMA in some cases and that might just nab your stop loss using a 50% ATR/.
How can you determine whether a candle is bullish or bearish by its open price ?
A candles open price is the first price quote recieved at the beginning of its time period, it is neither bullish or bearish at that time, it becomes one or the other after the next tick, then the candle will switch back and forth between bullish and bearish several times before it is complete, I know you said in your other reply it is rare for this to happen, that is not so.
Take a look at your chart, the only candles that never switched during their formation are those with the open price at the very bottom or the very top of the candle, every candle with a wick at the same end as the open price switched between bullish and bearish during its formation.
Even if you did somehow determine whether it is bullish or bearish at its open price I doubt very much whether this strategy would work.
I have done some testing using EA’s on the open price as an experiment.
If you open a buy position every time the open price is higher than the previous close with stop losses of 20 pips, the strategy fails and loses your entire account within a few months.
If you do the same with stop losses of 1000 pips the strategy fails and loses your entire account.
If you do the same with stop loss of 1 pip the strategy fails and loses your entire account.
If you reverse this and open a sell order every time the Open price is higher than the previous close the strategy loses the entire account.
If you open a sell order every time the Open price is lower than the previos close, the strategy fails.
I tried many combinations in an experimental EA backtesting and all of the strategies simalar to the one you describe, using the Open price, with many combinations of stop loss and take profit all failed and lost the whole account within 7 months.
Why ?
Because the Open price, as with the close price, is an entirely random event.
This makes it a 50/50 bet.
Until you add the spread.
The odds are then less than 50/50 so over time it will lose.
Each hourly candle is made up of several hundred ticks, they do not care what time it is they just keep comming, the open price is the first tick to arrive after the clock strikes 12 so to speak.
As far as trading by the open or the close of a candle is concerned, this is a frozen moment in time it has no special distinction from any of the other ticks that arrive, for all intents and purposes, in the price feed as a whole, it is a random event so no strategy based on the Open price or close price is ever going to work, except maybe, one based on the Open price at the start of the session on Mondays this is not random in the middle of the price feed it is the very first price the whole market is aware it is the first price, it may have some distinction from the rest, I dont know I have not experimented with this.
Hi Edacsac. I’m new on the site and your posts are pretty old by now but I was wondering if you made some improvements in your trading strategy and found something working for you?
I don’t think that you should feel disheartened because you have been losing money in the forex market. These are like pillars that pave your way to success. In the beginning, when you are testing your knowledge, you will come across several challenges that will help you become a better trader.
I’ve been loosing money in forex since 2009, still haven’t created a working formula. It is frustrating
I believe that your losses are connected to the fact that you haven’t worked out some consistent trading strategy. If the price doesn’t move the direction you want it to move, you close the deal, but it doesn’t work this way. Before opening a deal you should have some hypothesis of where the price will go. You should remember the indicators which support your hypothesis. Don’t be mislead by fluctuations. If you have the idea, stick to it.
- Find a reputable broker.
- Keep your charts clean.
- Protect your trading account.
- Use a practice account.
- When going live, start small.
This was me many years ago. What did it for me was learning and finally seeing why price moves and where it is ‘likely’ to go. Money management; scaling in and out, and adjusting size to probability was the other key factor. Hugs, you keep pushing enough, you’ll get there.
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