******************* Please, note that this system is not being traded anymore. *************************
STOP * STOP * STOP * STOP * STOP * STOP * STOP * STOP * STOP * STOP * STOP * STOP * STOP * STOP * STOP
Why 100$ trading ?
After a long period of having been thinking and crunching numbers, calculating and removing the more possible risk, I'm now so confident with this strategy on my mind and mainly on my spreadsheet that I choose to test it NOW on a REAL account with you guessed, 100$ on it. Well, the exact amount is 101.03 We will see if this thing grows up or not in the following weeks, months, years...
I would like also to give my thanks to Dreamliner and his thread "Super Carry Trade Trading System" from which I have been inspired.
This is a boring system/method which makes pips slowly but surely. If you are looking for fast and furious scalping or some other magical and colorful indicator or other MA cross system, this is not the place to be.
If instead you are a patient trader, you want at almost any cost protect your capital and you want to stay in for a long run, continue reading, this could be of interest for you.
The System in Short:
In short, this is another grid system but with an edge on "standard" grid systems. This edge comes from the following:
First, You! you must sense the market. Yes, it's easy to say, what I mean is that you have to take care and not just apply the grid blindly !
Second, the dynamic side of the legs vs static legs in standard grid systems. The legs become larger or custom while a down-trend unfolds or when trading at historical high prices.
Third, Use only swap paying pairs and preferably (AUD/JPY). We are paid for maintaining danglers instead of hoping for a reverse or closing them at a loss.
The rules :
1 - No indicator on price is needed but you can use an oscillator on day and week time frames to check if we are over-bought/sold .
2 - No Stop loss for long orders, only for short. !Important!
3 - Use of low leverage (around 10:1), to keep sufficient margin reserves is mandatory. !Important!
What you need:
2 - Some more capital in reserve in case we are caught in a down trend at start. !Important!
Wich pair will we play and why : AUD/JPY
1 - It pays swap during losing times while we wait for a trade to be profitable. !Important!
2 - It’s enough volatile to make profits all the way up and also the way down during retracements.
The strategy :
We calculate buy levels starting from 81.00 and adding 0.3 (30 pips) all the way up : 81.30, 81.60, 81.90, etc.
When a new level is reached, you can take the profits or set a trailing stop on the precedent and do that all the way up until you feel that the trend is coming to an end.
But how do you know that the trend has come to it's end ?
Well, you will have your last order open for a day or 2, 3 or more... and certainly your oscillator is overbought...
Then when trend reverses, wait for the dust to settle or that your (daily) oscillator is near or at oversold levels, then you start buying the way down the same way but applying the following multiplicators :
Skip the text below (in gray) which is now obsolete, keep reading and look for updates at the end of this post.
1, 1, 1, 1, 1, 2, 2, 2, 2, 3, 3, 3, 4, 4, and then 5 for the following...
We subtract 1*0.30 for the first 5 levels, then 2*0.3 for the 4 following levels, then 3*0.3 for the 3 next, and so on...
Lets say we are near the end of a down trend and start buying at 78. Applying the multiplicators we would buy at:
78 (level 0)
77.7 (level 1 = previous level - 1*0.3 )
77.4 (level 2 = previous level - 1*0.3 )
77.1 (level 3 = previous level - 1*0.3 )
76.8 (level 4 = previous level - 1*0.3 )
76.5 (level 5 = previous level - 1*0.3 )
75.9 (level 6 = previous level - 2*0.3 )
75.3 (level 7 = previous level - 2*0.3 )
74.7 (level 8 = previous level - 2*0.3 )
74.1 (level 9 = previous level - 2*0.3 )
73.2 (level 10 = previous level - 3*0.3 )
and so on ...
1. You are emotionally detached from your trading. If price goes up, you take profits and when price goes down, is no more than an opportunity for future profits. This is in fact the philosophy of this strategy !
2. No more complicated charts with dozens of indicators. This saves you time and will make you more confident because this strategy is simple to manage.
3. You are paid for holding losing positions while waiting for the price to come back.
If you are curious about this, I have already began to trade this on a real account. So I will regularly post my trades, open positions, account balance, etc.
Keep in mind that we play safe and protect our capital. If you want to be rich quickly, this is not a thread for you.
Note also that as no system as to be trusted, You should use a demo account and no real money, and conduct the due diligence in the case you would test this system.
Curious and ready to go a long trip with me ? Follow the thread and you are welcome to comment.
30-10-2012 Update. Please see post 83 on page 6.
09-11-2012 Update. Please see post 86 on page 6.