Hello to all FF readers,
Let me introduce myself first before starting with the system. I am a trader from India but living in the middle east and I have been trading for about 5 years with average success (from age 15). I developed interest in the markets when I saw my father losing his money and he kept telling me its no use trading...it is a money taking machine. Like any other 13 year old I said no dad, its not so hard. I started researching day and night and started understanding all the basic terms of trading, what do indicators represent...etc etc. Did that for about a year and a half and started demo. There were no good demo accounts back then so I used to write my trades in an excel sheet. Started trading live with a small capital of $500 and blew it up 3 times before managing to get it back up in three years.
If you have any criticism for this thread or system then please keep it to yourself. If you find something wrong with the system and have a suggestion or solution then you are free to post.
Now lets begin with a system I follow.
First and foremost thing to do is to judge the trend direction. I have been trading Gold ONLY in all these years so I will talk about Gold ONLY. Gold is clearly in a multi-year bull trend and if you pick the bottom out right then you are going to make money (if the trend continues). You may try using this indicator on various currency pairs but I personally have not tried it yet.
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Picking out bottom is almost impossible unless you are very lucky. Even if you catch the bottom with your smartness, the hard part is hanging on to the trade for the best period.
I use an indicator named SOHO_VIX which was coded by a poster in another forum, so all my credits to that person. The only thing I developed was the way to use it!
Indicator setting default is 22 but I set it to 1.
Here is the strategy:
When the Gold market starts falling sharply and it closes near the lows or has been moving lower consistently...AND
1. VIX is under -2.00
2. VIX is falling sharply
then you wait for the next days close and have a look at the VIX. If VIX retraces most of the previous downside (in the indicator panel itself and not the price) then you enter a buy trade at the close and keep your stop under the previous candles low (the candle when VIX was moving down sharply).
If you get stopped out then ... I will explain this in the next few posts. If you do not get stopped out then ride the trend on the upside and use indicators which show you the strength of the trend.
In the chart below, you can see 2 stop outs of $10 (100 pips) each. The stops total up to a loss of 20$ (200) pips, which is not that bad if you think about it. If you are a conservative trader or a short term trade then you can use 1:1 RR and you will not be stopped out very often. However, if you want to ride the main trend then you need to be able to handle the stop outs.
The third trade is really the winner out there which had a large stop to it but it caught a move of 200$ (2000 pips), depending if you had closed the trade there.
This indicator works well for people who follow the saying ' Cut your losses short and ride your profits'.
This system has many other aspects, about which I will write very soon. Time is the problem for me right now as I am doing CFA. So please spare me if I am not able to reply to anyone.
Also, I have not tried trading with the system and I would be glad if you guys can help me with the research on this. I had a look on other TF's and it works fine once I explain the other aspects.
Have a nice weekend all!
Let me introduce myself first before starting with the system. I am a trader from India but living in the middle east and I have been trading for about 5 years with average success (from age 15). I developed interest in the markets when I saw my father losing his money and he kept telling me its no use trading...it is a money taking machine. Like any other 13 year old I said no dad, its not so hard. I started researching day and night and started understanding all the basic terms of trading, what do indicators represent...etc etc. Did that for about a year and a half and started demo. There were no good demo accounts back then so I used to write my trades in an excel sheet. Started trading live with a small capital of $500 and blew it up 3 times before managing to get it back up in three years.
If you have any criticism for this thread or system then please keep it to yourself. If you find something wrong with the system and have a suggestion or solution then you are free to post.
Now lets begin with a system I follow.
First and foremost thing to do is to judge the trend direction. I have been trading Gold ONLY in all these years so I will talk about Gold ONLY. Gold is clearly in a multi-year bull trend and if you pick the bottom out right then you are going to make money (if the trend continues). You may try using this indicator on various currency pairs but I personally have not tried it yet.
___________________________________________________________________
Picking out bottom is almost impossible unless you are very lucky. Even if you catch the bottom with your smartness, the hard part is hanging on to the trade for the best period.
I use an indicator named SOHO_VIX which was coded by a poster in another forum, so all my credits to that person. The only thing I developed was the way to use it!
Indicator setting default is 22 but I set it to 1.
Here is the strategy:
When the Gold market starts falling sharply and it closes near the lows or has been moving lower consistently...AND
1. VIX is under -2.00
2. VIX is falling sharply
then you wait for the next days close and have a look at the VIX. If VIX retraces most of the previous downside (in the indicator panel itself and not the price) then you enter a buy trade at the close and keep your stop under the previous candles low (the candle when VIX was moving down sharply).
If you get stopped out then ... I will explain this in the next few posts. If you do not get stopped out then ride the trend on the upside and use indicators which show you the strength of the trend.
In the chart below, you can see 2 stop outs of $10 (100 pips) each. The stops total up to a loss of 20$ (200) pips, which is not that bad if you think about it. If you are a conservative trader or a short term trade then you can use 1:1 RR and you will not be stopped out very often. However, if you want to ride the main trend then you need to be able to handle the stop outs.
The third trade is really the winner out there which had a large stop to it but it caught a move of 200$ (2000 pips), depending if you had closed the trade there.
This indicator works well for people who follow the saying ' Cut your losses short and ride your profits'.
This system has many other aspects, about which I will write very soon. Time is the problem for me right now as I am doing CFA. So please spare me if I am not able to reply to anyone.
Also, I have not tried trading with the system and I would be glad if you guys can help me with the research on this. I had a look on other TF's and it works fine once I explain the other aspects.
Have a nice weekend all!
Attached File(s)
Soho_Synthe_VIX.mq4
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3,161 downloads
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