EDIT 13 Dec 2012
Anyone beginning this thread from today should read original rules below and go to post #186
http://www.forexfactory.com/showthre...20#post6288320
where I have updated the current rules.
Please also note that this system is running in my demo account and you should also test this thoroughly before committing real $$ to it.
Welcome to my thread where I present a system I have been testing for the past month. This is a very simple daily system I have been working with to catch minor and major trending moves or waves in price action. Over the past 12 months I have been reading every forex trading book I can get my hands on and testing all sorts of ideas, both back testing and forward testing, along with money management and psychology. I feel this little system really captures the most fundamental aspects of the movement of price action in forex – the investment of the market and the probability of what will happen next. With a couple of rules I get myself into a place where the probability weighs in my favour. And really I feel that is what it’s all about. Price can only really go in 1 of 2 directions. So you really have 50% chance of getting it right. So then it’s all about finding an extra few % and how you limit those that go against you and exploit those that you win.
During my time of study I have found that the market is not so trending as it once was. There appear to be more toing and froing and so this system is designed to find a change in trend early and get in and out in time for to make a profit before it turns again.
About pips. Pips mean nothing to me. I do not go for 20 pips a day or 100 pips per week or whatever. If I did then some trades where I need stop of 150pips or such will scare me. Instead I always set a risk limit per trade. I use 2% of my bank. So I take 2% of my account and divide into the size of my stop to find the position size. So the most I can lose if things go bad is 2%. I do this on any system and any trade so it doesn’t matter if the stop is 23 pips or 223 pips.
The intent is to have something mechanical that takes a lot of the analysis and decision making out of entering and exiting trades.
I focus on the main pairs such as GBPUSD, GBPAUD, EURUSD, EURAUD, AUDUSD but any pair could be used.
My aim in sharing this is not only to share something I think can work for other people but to also discuss and find methods for avoiding bad signals and riding out good ones.
Anyone beginning this thread from today should read original rules below and go to post #186
http://www.forexfactory.com/showthre...20#post6288320
where I have updated the current rules.
Please also note that this system is running in my demo account and you should also test this thoroughly before committing real $$ to it.
Welcome to my thread where I present a system I have been testing for the past month. This is a very simple daily system I have been working with to catch minor and major trending moves or waves in price action. Over the past 12 months I have been reading every forex trading book I can get my hands on and testing all sorts of ideas, both back testing and forward testing, along with money management and psychology. I feel this little system really captures the most fundamental aspects of the movement of price action in forex – the investment of the market and the probability of what will happen next. With a couple of rules I get myself into a place where the probability weighs in my favour. And really I feel that is what it’s all about. Price can only really go in 1 of 2 directions. So you really have 50% chance of getting it right. So then it’s all about finding an extra few % and how you limit those that go against you and exploit those that you win.
During my time of study I have found that the market is not so trending as it once was. There appear to be more toing and froing and so this system is designed to find a change in trend early and get in and out in time for to make a profit before it turns again.
About pips. Pips mean nothing to me. I do not go for 20 pips a day or 100 pips per week or whatever. If I did then some trades where I need stop of 150pips or such will scare me. Instead I always set a risk limit per trade. I use 2% of my bank. So I take 2% of my account and divide into the size of my stop to find the position size. So the most I can lose if things go bad is 2%. I do this on any system and any trade so it doesn’t matter if the stop is 23 pips or 223 pips.
The intent is to have something mechanical that takes a lot of the analysis and decision making out of entering and exiting trades.
I focus on the main pairs such as GBPUSD, GBPAUD, EURUSD, EURAUD, AUDUSD but any pair could be used.
My aim in sharing this is not only to share something I think can work for other people but to also discuss and find methods for avoiding bad signals and riding out good ones.
Winners add to winning trades!