Hi, this is my first trading stratergy input I have made on Babypips. I am looking for your input and guidance, to make this system stronger. I am sure that this stratergy is nothing new or exciting to most of you guys any input will be benificial.
Anyway this is the basic breakdown of the system;
Indicator I use;
-50 SMA applied to all timeframes (I use Daily, 4HR, 1HR charts)
Breakdown of stratergy;
Sell;
- Select the daily chart
- If price is under 50 SMA only sell can be taken (check 1 of 3).
- Mark chart with verticle line on daily to show when price last crossed 50 SMA and confirmed the sell.
- With horizontal line mark main resistance/ support areas only focus on points that have been tested multiple times.
- 4hr chart, check that price is still in same direction as daily chart (check 2 of 3).
- 1hr chart, check that price is still in same direction as daily chart and 4HR charts (check 3 of 3).
- Wait for candle to close if candle is a sell candle then place a sell order 3 pips below the low of that candle.
- SL is set 3 pips above that candle that you entered in on.
- Tp is set 3 pips + commision below the entry point.
Trade setup requirements.
- Every hour check that charts still confirm direction of trade.
- Risk/reward: I set a 1:1 risk reward including spread.
- If price is rejecting at a level wait for the box range to be broken before taking a trade in either direction.
- Only trade in the direction if all timeframes are confirming the direction.
- Never risk more than 1-2% of capital.
- Money management is key.
- If price is above on the 1HR timeframe but 4HR and Daily still confirm the direction. Trades can be taken at 1/2 the normal lot size. This is due to the greater potential risk.
Buy;
- As per sell signal requirements but in a buy senario.
Summing up.
As I said before this is most likely nothing new at all, I just started using it after backtesting EUS/USD last week. I am changing my own stratergy to set 1:1 risk/reward with no trailing stop just just hard stop/take proffit levels. This is due to going live on a small account and setting trailing stop and loosing out on higher proffitable trades. Also added the 1hr chart to my trading rather than just 4hr.
Starting account $1500, currently trading live for a week on .01 lot size, account is $1516.40. I will be adjusting my lot size this week to be 1-2% of my capital. Live update will be attempted each week. More charts will be on the way as I enter trade and set or change rules.
Hope you can understand what I am attempting to get accross in this post.
Cheers.
I am also considering adding candle stick reversal signal and counter trend trading stratergies but for the time being I will keep it very simple and easy as it shows promise.
Anyway that is it I will update charts and possible trades in the comming week. Thanks for reading.
The above image shows how I enter trades.
Image shows a general entry, after confirmation of daily-4hr-1hr are all under or above the 50 SMA.
Potential AUS/USD trade, I didnt take this trade due to a resistance area being shown on the charts.
However this trade went on to make 25pips the following hour, using my system it would have proven positive. I feel it is better to be out of a trade than trading into a resistance or support zone. Wait and see what the trade does.
AUS/USD possible trade after it broke through resistance area trade will be triggered at 1.01520 if triggered. SL 1.01685
TP 1.0122 higher than 1:1 I will close manually at 1:1 if triggered unless strong movement.
Trade triggered +30 pips.
Currency is trading in a box range, I am adding no more trades untill this range is broken, however I am keeping my trade from previous candle at base of box. This is so I will pick up the down move SL it to be placed at top of box range. 1:1 RR.
No trades have been triggered today so far from candlestick analysis
I think this is a really good strategy. It is very similar to the “Buy Sell Line” strategy on FF. I think it can be added to by taking some trades where bars reverse toward the 50 sma line. For example – You enter a trade short, it then reverses on you. – on each of the reversal bars why not place another entry order below the reversal bar and keep moving to the next and so on so that when the price eventually comes back to the trend you are in position to capitalize on it.
Just a suggestion. Like i said - Your strategy as posted is a really good one.
Cheers mate for the input, still in develpoment of this stratergy. I will back test EURUSD to see if what you suggest works. Are you saying that if price on the 1HR goes over 50SMA but stays under on the 4HR and Daily charts, keep following it on the hourly.
Currently I watch and use candle patterns and look for engulfing or doji signals. I have seen a lot of charts that work a treat using your suddjestion. Trying to cut back on the whiplash. I am also considering lowering my entry point from 3 pips to just 1 pipas this covers my spread price. Not shore if this is a smart move but I will soon find out.
I will defently look into your suggestion, cheers for the input keep them coming. I will also look at the FF and see what they are doing.
Cheers.
This is a trade I am taking using candle pattern and a well established box range that has formed on EURUSD over the last day. This is a seperate entry and not related to the stratergy I have posted. I also use candle pattern analysis for entry and exit.
This trade has a 2:1 RR set and I am searching price to hit the bottom of the box range.
Update on this trade, box range held as resistance for half a session but eventially broke down.
Took a hit of .75%. taking my account down to $1505.00. still in front.
I like this. Been working in reversal candles a bit lately.
Any idea if this works in higher time frames? I usually play with daily candles.
Hey mate, are you talking about box range trading? if you are it works on all timeframes it will just be the higher the timeframe ensure that a confirmation candle forms at the top of the range or bottom depends with direction you want to trade. Usually if it is a doji or high wave spinning top I will enter a trade if it confirms resistance or support level of the box. SL should be set above the high of the box, target the bottom of the box range. I usually use 4HR charts, I used the 1HR charts in my stratergy but that is proving to much commitment with work for me So I will most likely be using 4HR.
I will try find some examples of box trading and post them and show signals that you should look for.
Cheers.
Hi Jmg06jan - I was just thinking of one timeframe – whatever that may be. If you are trading the Daily E/U and price is just closing below the 50SMA then according to you and me we make an entry order 1 - 3 pips below the closed Daily candle. The price continues down for two more candles and we are still in. Then we get a retrace candle – I say put an entry order below that retrace candle just as we originally did – even tho it is going up — if the next candle goes up move the entry order up to just below it. This way when the price comes back to the trend (short) it will trigger the new entry order and we will have multiple orders going with the trend. We could also move the SL from the original signal candle right down as price goes south. I love the system but would just like to see it run longer on each order. What think you?
Very interesting Sixdogtrader, that sounds like a solid idea. I only like to trade in the direction of the dialy chart for a little more safety. But you are defently onto somethig with following the order. If one of these candles trigger would you use the same SL as set previously close above the candle that created signal. Or would you ride the storm hoping price reverts back to the entry level.
I was thinking of adding some criteria that closes 1/4-1/2 trade when price reaces 1:1 risk and moving SL to BE+5. The markets I am following are EUR/USD-AUS/USD why I am still ironing this stratergy. These two markets I follow expecially EUR/USD is in extreme sideways action ATM. I entered a box range trade that failed.
I also like to enter aggresive on candle signals engulfing and spinning top at support resistance levels. Due to time constraints and market noise being less, I will be using 4HR-Daily from today. I understand this is not the stratergy but I just like analysis candle patterns.
Cheers for the idea I will keep looking. Should make a strong stratergy in no time. I am trying to search and learn how to develope and create EA for this stratergy, as I feel this could easily be made into one if it had the appropriate inputs.
As long as the price action stays below (or above) as is the case - I would ride the storm (retrace). I do think moving the SL down to protect some unearned assets may be prudent - just not sure where. To tell the truth I actually have
another moving avg - the 240 Lwma Open and I set my SL on the other side of it. Usually a long way away. I really try my best to ride horse a long waay. Not always successful but I think it is the way to really earn some good money in this rodeo. I really think you are on a good track here - keep up the good work.
Tom
Cheers, I will defently look into it thanks for the input. Looking at the daily, no trades are able to be taken ATM due to I feel the market is about to swing. Both AUS and EUR against USD are gathering strength.
Do you enter using candlestick patterns at all? I like to use them expecially on the daily as I feel they are stronger than other time frames. I am glad I am on the correct path with this stratergy.
Thanks
Attached is a image of a possible trade setup on the daily AUS/USD. price under 50 SMA so can only sell will follow up the rally with sell stop order untill triggered or price goes over 50 SMA meaning buy will be triggered. I am using Daily chart for this trade just to determine what time frame works better for me.
1/1 RR 80 pips, I will be playing with moving stops and closing 1/2 position in proffit. Or playing with the idea of letting the trade run for as long as possible. I will keep you all posted if I decide to change anything.
Cheers for reading.
Absolutely love using a few candlestick patterns - Pinbars, Outside bars, Engulfing bars and inside bars.
so what sort of success rate do you have for this for every 10 trades then?
Just gone live with this on a account, from demo and back test data I would say 6-7 as long as you stay away from side ways markets. If u keep entering in sideways market you will get caught up the wash more often than not.
