Continuing Direction following new Daily Low or High at Close

Hi all

Been trading for 2.5 years but have struggled to make consistent profits.

This is my first thread and I'd be grateful to hear your opinions (good or bad) on the following opportunity that I have noticed.

Open a daily chart - avoid JPY crosses though!

Look for a bearish candle followed by another bearish candle that closes below the low of the previous day's low. Open a sell order on the third day

Alternatively look for a bull candle followed by another bull candle that closes higher than the previous day's high. Open a buy order on the third day.

See attached chart for examples.

Looks good on major pairs (excluding JPYs) particularly the less volatile currencies.

I have looked on James16 thread to see if anyone has pointed out a similar system, but can't see it.

Feedback welcome.

By the way....

I include sunday evenings data with Fridays, i.e. not as a separate day.

SL at day 2s high or low - no TP, close at the end of day 3.

By the way I have no trading history on this........it is the germ of an idea I came up with this week....which is why I was seeking your opinions before I stick my kids inheritance on it!

hirnant

this idea is already on forexfactory. i have read it on another thread. to be honest it doesn't work. according to the comments on that thread. people just stopped doing it.
you can backtest yourself and see.

have you followed through on the 2hr 8am candle idea you had thought of a few months back ?


regards

Blimey Whatfx, you've got a good memory!

Like most systems the 2 hour post 8am sucked when it was in a range...but profited in a trend!

Any idea where the previous poster was on this sytem? James16?

it wasn't j16 thread. its definately on another thread. can't remember the name though.


have a look at your chart above you posted:

the first entry, you would have made good pips.

second entry - you would have lost pips.

third entry - break even ?

fourth entry - lost a lot of pips.

fifth entry - made some pips.

sixth entry - lost a lot of pips !

seventh entry - made some pips.

8th 9th entry - made some pips.


overall probably break even or little profit / loss ? so is it really worth trading. also, what would happen in a ranging market ?


you should backtest it for at least 2-3 months and come up with precise win/loss figures.


regards

any further developments on this ir backtests ?