Forex Factory (https://www.forexfactory.com/)
-   Trading Systems (https://www.forexfactory.com/forum/71-trading-systems)
-   -   Quantum 00 Level Daily Trading (https://www.forexfactory.com/thread/843621-quantum-00-level-daily-trading)

mer071898 Nov 4, 2018 4:25pm | Post# 1

Quantum 00 Level Daily Trading
 
4 Attachment(s)
Hello gang, I'm back!!!! I hope all of you are still learning and have made loads of money in my absence. I have been out of the loop for the past few years because of some family issues, health issues that needed to be addressed, and yes, I've been testing a new system for you to use.

With all the issues and changes in my life, I seriously thought about just retiring and sitting on a beach somewhere with an umbrella drink in my hand and sand in my feet. But alas, my retirement funds are not quite there yet for me to retire as comfortable as I would like. Forex trading has really helped increase that, but since I’ve decided to keep trading, how do I make it easier to manage to trade and get more time for myself and my family? The answer:

Quantum 00 Level Daily Trading

As we all know, some traders are successful with short-term trading, but most of the truly successful traders, whether it be Forex, Stocks, Options, or whatever instrument they choose, will trade long term. Why? In a nutshell, market noise. Market noise on lower timeframes is what makes trading Forex difficult. Large swings, volatility, daily news, national events, all of which can change the market very quickly, wiping out accounts and disrupting the space-time continuum (sorry, that’s the nerd in me). Trading consistency is proven to be easily controlled over the long term and my system is based on that principle. Market swings, corrections, retracements, and trading psychology all play a factor and I’m hoping this new system will help those who are struggling with short-term trading and convert you into long-term traders.

This system is a Daily system and can also be used as a Weekly or Monthly system as well. So, if you do not like to trade timeframes longer than a Daily system, this is not for you. If you’re looking to try and double your account in a short period of time, this is not for you. I know a lot of you want to get rich quick fast, but the reality is this, it doesn’t happen. No matter what fancy-schmancy system you try, no matter what up and coming EA’s you buy, 90% of it is not going to work. You need to let the market give you what you need to be successful.

A little bit about the basics.

Indicators

For those who have followed my Quantum thread know about the Quantum indicator and have taken the indicator to different levels (Mastermind) to suit his or her trading style. In this system, the Quantum indicator is only for showing us trading entries, and that’s it. Targets and stop levels are a little later. For those who don’t know what the Quantum indicator is, I’ll tell you. The Quantum indicator is basically a modified Wave indicator in which the boxes left on the chart represent the top or bottom of a wave. What is different about this indicator is that when a new high or low is made the previous box stays on the chart and a new box is drawn. In a standard Wave indicator, the line would just be re-drawn, so you would never know it’s past history by looking at it in current time. We will be looking at these boxes as our trade entries at the close of the Daily candle.

The next indicator we are using in the Round Number indicator. We are going to use this to mark our “00” levels and form a type of "grid" in which we will use for targeting and trailing stops. The “00” levels are strong areas on a psychological level and we will show you how to utilize this.

The third indicator we will use is the Spread/Swap indicator. This basically tells us the current spread and whether the swap rate is positive or negative. With this system, we are only looking to place trades on pairs with positive swap only! The reason is that we may have to hold open positions for extended periods of time until a retracement or market correction will occur. This way you can accumulate swap while holding onto the trades until they close and become profitable. Don’t worry, we will be watching 14 pairs on this platform (Trader's Way), so there will be plenty of trades to look at. My live trades are on a different broker but the concept is going to be the same. Now, these are going to be the perfect setup to explain the strategy and not taking into account the actual time of entry, broker pricing, and swap rates, etc...

All 3 indicators are posted below along with a zip file with templates for all 14 pairs we will be using for demonstration purposes.

Over the next several days will post pics of how the trades are placed and closed, along with examples of current and past trades that are still open and earning swap.

As usual, please refrain for adding indicators or making suggestions to the strategy. If you feel you want to expand or use any part of this strategy to help in your particular way of trading, feel free to do so, but please open a new thread and post about it there, thank you.
Quantum.mq4
Round Numbers.mq4
Spread Swap.mq4
templates.zip

mer071898 Nov 4, 2018 4:40pm | Post# 2

1 Attachment(s)
Okay, once you have all the indicators and templates installed, the first thing we want to do is make sure your chart looks like the one below. The main thing to look for is making sure our "00" levels look correct. On this Aud/Cad chart, our main levels like 1.100, 1.000, .9000, etc... should be a solid green line. The next thing is to make sure there is a grid between these lines. The space in between these whole numbers (Blue Lines) should be divided into 5 sections and there should be a dotted Red line dividing those. As you can see on the chart, the price is reacting to all the different 00 levels and we will exploit that.

Click to Enlarge

Name: AudCad.png
Size: 144 KB

mer071898 Nov 4, 2018 5:07pm | Post# 3

1 Attachment(s)
Now as we zoom in a little, we can see the boxes placed by the Quantum indicator which will serve as our entries. The box is placed at the close of the daily candle and our trade is placed at the open of the next candle. In this pic, you can see there are 12 trades being made, with the last trade placed was on 10/5/2018 at the open @.91417. Now don't be concerned if your pricing or charts are different, all brokers will have different information. Because of the price differences, some brokers may show more or fewer boxes as you see here. The indicator is set at the default value of 300. If you want more trades, lower the value, fewer trades, raise the value. I would not suggest going much lower than 300 as you will end up carrying more trades which will affect your trade equity and free margin.

Click to Enlarge

Name: AudCad 2.png
Size: 128 KB

mer071898 Nov 4, 2018 5:36pm | Post# 4

1 Attachment(s)
So how do we close out trades? Simple. The Blue and Green lines I consider Primary Lines and the Red lines Secondary Lines. Your target is 2 Primary lines above or below your entry. In this example, we entered a trade on 12/7/2017 @.96698. After 28 days, we hit our 2nd Primary Line (Green) and closed out the trade for approximately +329 pips. Now along with that, since we are only taking trades in the direction of the positive swap, we also earned 28 days worth of swap on top of the trade profit itself. Are there alternative ways to enter and close trades, sure, it all depends on your risk level. You can enter at the first Red Secondary line if you wish and close it out at the next Primary line or even the next Red Secondary line, it's all up to you. But for all intents and purposes, we will be using the Primary lines in this thread for targeting. What I use the Red secondary lines for are my trailing stops. Once I get past my first Primary line, I wait until it hits the next Red Secondary line. Since the initial trades we place do not have a stop, we can use this to protect the trade once it reaches a certain point.


Click to Enlarge

Name: AudCad 3.png
Size: 141 KB

Zakattack Nov 4, 2018 6:06pm | Post# 5

Now as we zoom in a little, we can see the boxes placed by the Quantum indicator which will serve as our entries. The box is placed at the close of the daily candle and our trade is placed at the open of the next candle. In this pic, you can see there are 12 trades being made, with the last trade placed was on 10/5/2018 at the open @.91417. Now don't be concerned if your pricing or charts are different, all brokers will have different information. Because of the price differences, some brokers may show more or fewer boxes as you see here. The indicator...

Just so that I understand, for these 12 trades, we would have entered LONG since that gives us positive swap. eventhough the "trend" seems to be down? So we are essentially averaging down while we collect swap until our trades become profitable?

jmn5611 Nov 4, 2018 7:28pm | Post# 6

So how do we close out trades? Simple. The Blue and Green lines I consider Primary Lines and the Red lines Secondary Lines. Your target is 2 Primary lines above or below your entry. In this example, we entered a trade on 12/7/2017 @.96698. After 28 days, we hit our 2nd Primary Line (Green) and closed out the trade for approximately +329 pips. Now along with that, since we are only taking trades in the direction of the positive swap, we also earned 28 days worth of swap on top of the trade profit itself. Are there alternative ways to enter and close...
Welcome back mer, glad to see your health has improved!

Do you still use the position sizing spreadsheet from the old thread, or do you scale in differently these days?

mer071898 Nov 4, 2018 11:50pm | Post# 7

1 Attachment(s)
{quote} Just so that I understand, for these 12 trades, we would have entered LONG since that gives us positive swap. eventhough the "trend" seems to be down? So we are essentially averaging down while we collect swap until our trades become profitable?
Yes, that is correct. As you look back on most any chart, you will see major corrections to the market which usually brings the price back to the target areas. Now it may be a period of time to get back to that situation so you have to account for open trades and not utilize too much of your margin. For example, there are a couple of Eur/Aud trades from back in late October 2017 that are still open and running, but again, we have earned roughly 265 days of swap during this time period to help offset the account balance (see pic). Plus I do not use a very large lot size per trade, usually no more than 1 total lot per $10K. I may have 30-40 trades open, but no more than .01 to .1 lots each depending on your account balance and risk profile. Again, this is not a strategy that's going to double your account every month but should allow for anywhere from 20-40% per year (better than any mutual fund or 401K that I've seen). And again, in post #4, I mentioned you can decide to enter earlier at the first line you come to, whether it's a Primary or Secondary line, the choice is up to you.

Click to Enlarge

Name: AudCad 4.png
Size: 129 KB

mer071898 Nov 4, 2018 11:56pm | Post# 8

{quote} Welcome back mer, glad to see your health has improved! Do you still use the position sizing spreadsheet from the old thread, or do you scale in differently these days?
Thank you jmn5611, I actually have gone back to a fixed lot size and I only increase the lot size only if there are more than 20 trades on a pair (which rarely happens) and only if I'm within my rule of 1 total lot per $10K rule. I have learned over the years that the position sizing that I used to use is not only risky but something that the average trader will never be able to use.

And with that note, since I've already check charts (once a day is so much easier), it's off to bed for me. I will be back tomorrow to show some more examples and advanced options for trailing stops to take advantage of the really large trends. Good night everyone and go make money.

tenthman Nov 5, 2018 12:05am | Post# 9

1 Attachment(s)
The Spread/Swap monitor on my charts doesn't register the swap rates and the spread is jumbled up as to make it difficult to read. Any suggestions?Click to Enlarge

Name: EURAUDDaily.png
Size: 49 KB

jmn5611 Nov 5, 2018 12:14am | Post# 10

The Spread/Swap monitor on my charts doesn't register the swap rates and the spread is jumbled up as to make it difficult to read. Any suggestions?{image}
You will need to go into the code and adjust the scaling. Every monitor is different.

{quote} Yes, that is correct. As you look back on most any chart, you will see major corrections to the market which usually brings the price back to the target areas. Now it may be a period of time to get back to that situation so you have to account for open trades and not utilize too much of your margin. For example, there are a couple of Eur/Aud trades from back in late October 2017 that are still open and running, but again, we have earned roughly 265 days of swap during this time period to help offset the account balance (see pic). Plus I...
Go to know that there are actually managers of money on this site. So many people on here trying to throw Hail Mary's and change their lives in a year.

tenthman Nov 5, 2018 1:09am | Post# 11

1 Attachment(s)
I adjusted the scaling ... it's not perfect but I can deal with it. The swap rates are still showing up as 0:00. And it's like this on all the charts.

Click to Enlarge

Name: EURAUDDaily.png
Size: 48 KB

jmn5611 Nov 5, 2018 1:16am | Post# 12

I adjusted the scaling ... it's not perfect but I can deal with it. The swap rates are still showing up as 0:00. And it's like this on all the charts. {image}
Not sure why that is happening. We are into the trading week. Your broker should be broadcasting the data.

mer071898 Nov 5, 2018 11:17am | Post# 13

I adjusted the scaling ... it's not perfect but I can deal with it. The swap rates are still showing up as 0:00. And it's like this on all the charts. {image}
It's gotta be something with the broker as I have tried it on every MT4 platform that I've ever used with no issues, sorry. Maybe post in the Platform Tech section and see if someone could look at it or try a different broker's MT4.

{quote} You will need to go into the code and adjust the scaling. Every monitor is different. {quote} Go to know that there are actually managers of money on this site. So many people on here trying to throw Hail Mary's and change their lives in a year.
jmn5611, thanks. I actually only trade for myself now. When I was trading for family and friends, I think the stress and hours I put in actually was causing some of my health issues. The good thing is they all know how to trade themselves now if they choose to so I don't have to worry about it. But yes, so many people are lured in thinking they can become millionaires overnight and the reality is that it just doesn't happen.

mer071898 Nov 5, 2018 12:56pm | Post# 14

2 Attachment(s)
Okay, I've already got a few PM's about how to protect trades. I will explain it this way, all my trades run until a target is hit. It is my way of trading and I don't expect everyone to follow that to the tee. I have enough account equity and free margin to allow for holding trades for extremely long periods of time, even if it goes against me, but most do not. Here is an example of a few different ways to either get in early on a trade or to protect it from going against you. Let's look at a trade taken on May 11th of this year. The trade was entered on this day @.96127 and we can see there is quite a bit of distance to reach our first target point @.9800 and then our final Primary Line target (Green line) @1.0000. You have some options:

 

  1. Use the original strategy and close the trade at 1.000 (currently still an open trade per my original rules and on its 127th day of earning swap)
  2. Instead, use the Secondary line (Red) @.9700 as your first line target and then close the trade at either .9800 (Blue Primary) or .9900 (Red Secondary) and call it a day with either +185 w/ 10 days swap or +288 w/17 days swap and you're out of the trade.


Click to Enlarge

Name: AudCad 5.png
Size: 121 KB

One more option is a trailing stop. When you hit your first target point at the Primary Blue line @.9800, you place a stop at your original entry @.96217, then as you move up a line to .9900 (Red secondary line), we can now move the stop to .9700. And even though the trade did reverse on us, you would still close the trade with roughly +87 pips and 37 days of swap. Again these are all different options you can use depending on your risk tolerance and how you want to approach the strategy.

The trailing stop is something I've played with this year. For example, I would enter say .04 lots on a trade instead of .02 lots, I would then close out .02 lots at my normal target, and then trail the remaining lots until stopped out. I'm basically freerolling here with the remaining trades once I've locked in pips. A good example of this was on December 21st and 22nd in 2017 on Eur/Nok. I closed out half the trade at my original target @9.800 for +179 and +115 respectively and trailed the rest down to 9.700 for +280 and +217. It doesn't happen too often but it works great when it happens. It doesn't seem like much, but the added pips and extra swap can add up over time.

Click to Enlarge

Name: AudCad 6.png
Size: 133 KB


tenthman Nov 5, 2018 11:57pm | Post# 15

Thankyou jmn5611 and mer071898 for your help. I've contacted the broker but haven't received a response from them as yet. I've also posted a query in Platform Tech.

Since the swap rates aren't showing, is it safe to assume that whenever I see the little squares under a price bar to go long or one over the bar to go short, that we have a favorable swap rate?

Lastly, the pairs you chose to use the quantum system have fairly large spreads for me. I'm talking 5 or 6 pip spreads! Are the higher spreads to be ignored because of the favorable swap rate?

Thankyou, and thankyou for putting in the effort to share your system.

cfudge Nov 6, 2018 12:49am | Post# 16

Hi
What are the settings for the round numbers indy? I can not get it to look like that without using the template.

Platanero Nov 6, 2018 5:15am | Post# 17

Sub'd!

I've played around with Quantum a bit.

My way of executing it has also evolved into using Daily charts and more 'set-and-forget' than before.

mer071898 Nov 6, 2018 10:57am | Post# 18

Thankyou jmn5611 and mer071898 for your help. I've contacted the broker but haven't received a response from them as yet. I've also posted a query in Platform Tech. Since the swap rates aren't showing, is it safe to assume that whenever I see the little squares under a price bar to go long or one over the bar to go short, that we have a favorable swap rate? Lastly, the pairs you chose to use the quantum system have fairly large spreads for me. I'm talking 5 or 6 pip spreads! Are the higher spreads to be ignored because of the favorable swap rate?...
tenthman, sorry you are having issues. You can also open Market Watch on top of the platform, right click and hit Symbols, click on a pair and hit Properties on the right and you can see the swap rate. Have you tried a different MT4 from a different broker? Spreads are pretty inconsequential because, yes, we will be earning swap and the pips you earn will easily cover the larger spread.

Hi What are the settings for the round numbers indy? I can not get it to look like that without using the template.
Then why not just use the templates in Post #1, that's why they're there.

Sub'd! I've played around with Quantum a bit. My way of executing it has also evolved into using Daily charts and more 'set-and-forget' than before.
Glad to here that, and hope continued success in your trading!

cfudge Nov 6, 2018 11:46am | Post# 19

1 Attachment(s)
Yep can do, just curious as I cant get the same look...
The other thing is I have no green lines. I have posted a month pic to show no green lines.
Does it matter that the swaps are both negative?
Chris
Click to Enlarge

Name: qu.jpg
Size: 289 KB

Platanero Nov 6, 2018 3:28pm | Post# 20

Yep can do, just curious as I cant get the same look... The other thing is I have no green lines. I have posted a month pic to show no green lines. Does it matter that the swaps are both negative? Chris {image}

Might try switching from a monthly chart to a daily chart and increasing the size of your candles by one or two measures.

Also, that is an AUD/CAD chart which does not pay positive swap. Not all pairs pay positive swap. Only the following: (Broker: Oanda - USA)

EUR/USD - short
AUD/JPY - long
AUD/CHF - long
USD/JPY - long
CAD/JPY - long
EUR/AUD - short
EUR/CAD - short
NZD/JPY - long

Hope this helps.-


© Forex Factory