I am beginning with this thread (in July 15, 2013) to explain my system - AckelSystem - and share my point of view about trading forex.
(Edited in July 22, 2013. I found other systems named "Double Bollinger" systems, with different approaches and different settings, indicators and metodologies. So I am now renaming this system to "AckelSystem".)
I am neither a guru nor an expert in forex. I am just a trader learning everyday. Because I learn everyday, this system can evolve to reflect my discoveries.
I hope the ideas I will share here can be usefull to someone.
Plus, English is not my primary language, so please forgive my mistakes using this language.
Finally, I am writing this thread to myself, to make clear for me my thoughts and to help me to commit to the rules.
I am sure that the criticism and interactions will to help to put in check all I know about this market and about this system.
Use two timeframes, one for filter trades and a smaller for entries. I am using H1/M15 timeframes, most of time, but in my template (see below) I always have the daily timeframe in a minichart. Stay away of news and the period between end of NY session and opening of Tokyo session. Test this system in a demo account. Forex involves significant risk.
Main window (mw): Candles or bars, Bollinger 20/2. EMA 55 close. Any support/resistance indicator or put S/R lines by yourself. Any news alerter (FFCal attached). SMA 10 close. EMA 55, EMA 89, EMA 144 and EMA 233 (I call these EMAs of "Fibonacci's EMAs").
Indicator window 1 (iw1): RSI 8; EMA 8 close applied at First indicator data. Bollinger 20,2 applied at First indicator data. (Or Ackel_TDI_modified indicator, attached).
Indicator window 2 (iw2): ADX 14 with lvls 10, 20 and 30.
Adittional indications - divergences between price and RSI (You can change your graphics to line chart for easier visualization). Expansion or retraction of BB.
TREND - Trend is identified using EMA 55 (mw) and EMA 8 (iw). Price above EMA 55 suggest up trend. EMA 8 above lvl 50 of RSI suggest up trend. The opposite for down trend. Trendlines (in price, RSI and EMA 8 lines) and higher highs/lower lows concept are also applicables. The major trend can be seen when EMA 144 and EMA 233 are aligned.
TRADE A SETUP: In a uptrend, price come back to MA 20 (Bollinger in mw) and price action suggest indecision. MA 20 (mw) is ascendant. RSI cross above EMA 8 while price action suggest main trend will resume. Stop loss is put bellow last support level. Take profit is put bellow next resistance lvl. ADX is rising and +DI > -DI. If ROI (relation between risk and return) is good, enter a buy order.
TRADE B SETUP: In a uptrend, RSI is overbought. Better if, after a strong wave, price is far over upper bollinger band. Then price action (in or near a resistance lvl) suggest a correction. RSI cross below EMA 8. Enter a sell order if the ROI is good enough.
TRADE C SETUP: After cross from below, price was consolidating near MA 20, then price action suggest it will continue to hit the upper BB. RSI crossed above EMA 8 AND upper BB (iw). Enter a buy order if ROI is good enough.
TRADE D SETUP: Bollinger bands are tight, candles are small, indicating low volatility for some time. A candle does a strong movement, breaking the upper BB and the MA 20 inclines to follow this movement. BB expands in mw and in iw. RSI crosses above EMA 8 and upper BB. ADX is rising and +DI > -DI. Enter a buy order if ROI is good enough.
Generally Trade A and Trade D setups are the best. Trade B setup is good too. Trade C is risky but yet profitable with good money management (MM). Trade A&D > Trade B > Trade C.
About money management and lots: post #8
About trade management: post #22
The "Twilight's Channel" - post #42
Using TDI: post #78
Trading Range Boxes: post #157
Metatrader indicators and templates - last updated in Sep 16, 2013: