It is very important for all of us to understand that i still did not trade this system, its just a flash poped into my mind after loosing too much in forex and after some success in trading options.
This trading system came into my mind after i really wanted to eliminate the gambling part of the trading as i want to make this as a career to me, it really delivers the financial freedom we all dream about.
This system works like this,
- First we determine the trend (visual, MAs, trendlines, RSI…etc). - MORE ON THIS ONE BELOW
- we determine supports and resistance (visual Support and resistance determination, Fib. retracements, MAs and the like) - MORE ON THIS ONE BELOW
- Now our bets, when with the trend we place our bets on R1/S1 with the direction of the trend. when against the trend we place our bets on R2/S2.
This system has worked nicely in options trading, yet did not use it in FOREX because after you buy the option there is no way out but in forex alot of bsycology is there.
TP & SL.
SL is placed at 40 pips the distance between S-R
TP is placed at the other end of S/R - 30 pips.
i will add more to this, using indicators alone was never predicting the market, its all averages or averages of averages, always lagging providing a signal too late thats why i think a strategy that depends on S/R and using past performances (prces history) will bear more probability and will put the odds at your side.
Again,
on point 1 above - The trend:
We will use the daily chart (as we are dealing with S/R/Pivots) To draw the trend. Then we will move in to lower time frames H1 - 30M and wait for a pull back to near PIVOT or Resistance 1 then place our order with the trend. Now in Cases where the price opens beyond pivot (lets assume it is an up trend) and reaches R1 we do not open any trade we wait, from my previous experience it will reach at least half the distance between Pivot and R1 and R2. The rule is we open when prices reach R2 (since this is against the trend) and aim for R2-R1-40.
A great deal with Money management is here, we will aim at 1:1.5 minimum entry and no more than 5% of your account. say your account is 5000, you want to enter at Pivot targeting R1-40 say its TP is located at 80 Pips. your SL should not exceed 60 that also should be near S1) there fore 0.05x5000 = $250 divided by 60 pips = 4.167 / pip (i.e. 40,000 deal) you can be more conservative and put it 30 pips below the R1 and use lesser deal (25,000)
what do you all think about the idea of this system, i am sick of indicators but am welling to put them somehow to help the general concept of this trading strategy.
Lets work together on this system, backtest it (paper trading) lets see the results each one of us will get one month and analyse it repost the results for all of us to compare and study. your contribution and analysis is welcomed.
Why i say this worked for options, because in options if you are only 3 pips at your side at the expiary date you will win the same thing as if you were 500 pips in green and vice versa, also because bsycology can not play aftter you have bought the option you just wait the expiary.
Let me know what do you think and lets all work to add a constructive contribution to the system.
Wish you all green pips
