I think that is a great setup and is on my radar now as well. That is pretty much how I have my new entry system setup except I have been playing these levels a bit more aggressive. I would have ideally entered on the very first retest of the level or essentially one price broke I would look for a little consolidation above the level or a few candle closes above the level and then entry on the first retest ( if I understand the definition correctly this would be at the point where the “swap” officially occurs). I would have placed my profit target a little bit below the most recent swing high and would shoot for around 1:1 risk reward. I haven’t had as much success when taking these types of trades where pice has gotten a bit far from the level, but I have seen I am missing out on some good trades though. Would you be looking for a price action signal when price gets back to this level to confirm entry or would you be taking it just as soon as price retests?
Good to hear! I’m happy that possibly someone other than my self has been able to benefit from this thread. This thread so far has taken a few turns that I wasn’t planning on and has been sort of a self discovery process but I guess that’s how trading works until you find a method that’s custom fit to yourself.
And yes, please keep me updated on your progress and feel free to post any charts and we can all give our two cents.
Thank you for your detailed response. I’ve looked into forex tester 2 and it looks really awesome. It is a little pricey but in the long run $200 is not much money. I’m currently limited by 180 days on the 1 hr chart by Thinkorswim, but they do have a thinkback feature or on demand where you can go back further in time I think only to late 2009 though… I don’t have any Internet at my new place yet but I will definitely be going back at least to 2009 to get more data once that is up and running. You make some great points on the different types I markets and it is true that it could be the case where certain strategies don’t work in certain types of markets. I do need to find a way to test this going back further in time.
Yeah, 33 trades doesn’t show you much statistical significance yet and I will be doing some more back testing and update my findings. I agree that doing your homework and back testing is important in trying to develop method. I need to start gathering data though on applying in real time trades as well. It’s a different stage when applying in real time and plays with the emotions in a different way and it makes you wait longer haha.
I will send some updated results once I get more data. I appreciate your comments!
I got some more data on this newer method i was referencing. Here it is:
Total Trades: 92
Wins: 64
Accuracy: 69%
Total Pips: 587
Through all of this backtesting i have uncovered some major flaws though not only in the way i have been back testing but in the timeframe I have been trading off of. I have not considered spreads in my backtesting methods and I believe that would reduce my win rate a good amount (if not considerably) since many of my wins were barely going past my profit target. This would make the way i’ve been trading more ideal in the futures market vs the forex market if trading off the one hour chart. I have experienced a good amount of variability between trading certain pairs and I think it has to do with the volatility differing from one pair to the next, but this may have to do with just the strategy just not working as well on one pair vs the next. I’ve tried backtesting on 7 different pairs but again this is only going back 180 days on the 1 hr chart. I’m satisifed with the win ratio, but again the 1 hr timeframe is not ideal to forex so i need to start getting data on the 4 hr or daily charts. Also, I feel like the more pairs I trade the lower my win ratio is getting. Not sure if this is just the way i feel or the reality of the situation.
I’ve thought about keeping the 1 hour chart, but trading two lots and letting the second one run. I’m missing out on some very big moves and I believe I could be very profitable if i can leave trades open to capture those bigger moves. Well nontheless it looks like i’m back to more testing. I will explain in more detail and post some charts of the way in which I am trying to trade soon. I’d like to get more data first if possible.
Yes, over 180 day period. Wish it was higher lol but I am happy that over a large amount of trades I could be profitable in the current market environment. Using a 1 hour Chart my average winning trade is only about 9 pips, since I’ve been shooting for around a 1 to 1 ratio and aiming for a little bit before the most recent high or low. I am goin to play with different take profit techniques to get that average winning trade up including just trading on a higher time frame. I like the entry setup, but the take profit needs a little work.
The method I do is i pull up a 180 hr chart and zoom into a smaller time frame so I can’t see too far ahead or back in time. I then scroll all the way to the beginning of the period and as I am advancing bar by bar, I mark my entry Stop loss and Take Profit. Forex tester would be nice though…=)
Not bad, I had a good month.
My last trade was last week Thursday. My profits for the month are above 20 percent, so I decided to leave it alone and start again next week. Earlier in the year I had 3 consecutive months of good profits, then I put pressure on myself and tried to beat it. Also, I tried a different strategy that I hadn’t properly tested, so I gave back in two months what I made in 3. But now I’m positive again, but I had to do some soul searching first.
This is more a game of discipline than anything else, and I think I’m getting there. I used to trade everyday, now I pick levels and wait for the market to get there. Less stress. I think this thread pushed me in the right direction.
Have you ever tried one of those simulators for testing? I used one once, not sure if I still have it. They are great because you don’t see whats on the right hand side of the chart until you click the button, and you can speed it up or slow it down.
I think I’ll start that again, but I’m still refining my rules. I just don’t have enough time at the moment, but I will let you know what I come up with.
I’m glad to hear that this thread has helped you be more patient with your trading. 20% is a good month! How much are you risking per trade? And how many trades did you take this month? Also, what risk to reward ratio do you use or how are you setting up your stop losses and take profits?
I risk 3 percent on each trade.
I took 24 trades for the month, most stop losses are around 20 pips (sometimes less), but one was 30, and that was a loss.
However, not all my stop losses trigger because I babysit my trades. Some losses are around 10 pips, others just a few pips.
The same goes for my winners, the biggest win was 50 pips, second biggest 30, and the rest are between 10 and 20 pips.
Overall I had 14 winners and 10 losers.
So trying to calculate a reward to risk doesn’t make any sense in my case. However, when I enter a trade I always make sure there is a greater potential reward to risk, so a lot of my small winners could have been much bigger if I hadn’t closed them too soon. On the other hand some of them were closed at just the right time. I don’t have any regrets about anything. Small wins are good for confidence at the beginning.
Anyway, I have said too much. If you ask me for a myfxbook account I’ll unsubscribe from your thread lol.
Thanks for sharing and I won’t be asking for your fx book as long as you don’t ask for mine haha. Been making some progress on the back end here and making tweaks. Starting to eliminate pairs with higher spreads and I’ve been gathering some data on spreads with Oanda I try an narrow it down the amount of pairs I watch. I’ve gotten some pretty decent results trading on the 4 hr but need to get a bigger sample size to see I this is something I could start trading some real $$ with. Some of the trading setups that I come across just don’t have the profit margin when you factor in the spread so I’m trying to figure out a plan or a method to still be able to capture these trades. Some go on I be big winners so maybe just move to be quick or something. I’ve been more akin to the 4 hr lately since it works better with my sleeping schedule lol. If I plan it out right I could only miss one candle formation at 2 in the morn and be up for the 6 o’clock am candle PST.
I’m not sure if anyone is still following this thread, but if you are, I’m curious to know how long it has taken you to become consistently profitable? I’ve been testing out many different methods over the past year and a half and I feel like I’m very close. I think my problem is that I haven’t been able to commit to just one method and I keep switching to a new one every few monthes. Anyone feel the same?
And another question to those traders that are consistently profitable, once you found your method did you consistently stay with that method or did you still find yourself switching things up?