Hi Guys,
I have been looking at approaches to the market that are different to price action, because as we all know reading price seems to confuse the majority of us.
With this in mind I have been thinking about a different approach.
Instead of having an entry, stop loss and profit target I have been looking at strategies that continully reverse the positions until the profit has been achieved. This can only be achieved with the assistance of an expert advisor, whose name will be WOPEA!!
See the jpeg attached for trade example.
It is a chart of GPD/USD and the logic for the trade is simple.
The line represents the weekly open. Trades are only initiated after Monday's daily bar is complete.
If or when price passes DOWN through the open price by 5 pips the EA goes short, if the price reverses back UP through the open by 5 pips, the trade is closed and a new trade long is opened.
The next part is deciding when to close the trade;
Lets go for an extreme example, price goes back and through the open
20 times, to keep it simple we now have a loss of 20 x 10 pips=200 pips.
I have decided that take profit should be 100 pips. This means the price now has to travel 300 pips away from the open price to achieve the target. This recoups the costs of 'turning the trades' and a profit of 100 pips.
If spread and swap costs need to be factured in, the EA will track current costs and add this to the profit target in pips.
To summarise: whatever the costs incurred are to take the trades, the EA will close the position only when these are recovered plus 100 pips.
The logic behind this idea stems from the fact that price HAS to move from any given price by 100, 200, 300, or any number of pips. The weekly open has been chosen as this may have significance to professional traders. With this in mind perhaps the profit target can be made greater than 100 pips, maybe 100% of the costs for turning the trades instead of 100 pips. Testing with an EA will answer this question.
So, will this work? I don't know but I am having a hard time trying to find reasons where this will fail. I am hoping that 'news announcements' won't ruin it! ie where spread widens stopping the trades being placed??
Every system, method I have thought of needs to be pulled apart mercilessly before progressing any further.
If we can't find any reasons where this will fail I will try and get the WOPEA made by putting this in the Platform Tech section on FF.
All reponses appreciated.
Thanks Slim
I have been looking at approaches to the market that are different to price action, because as we all know reading price seems to confuse the majority of us.
With this in mind I have been thinking about a different approach.
Instead of having an entry, stop loss and profit target I have been looking at strategies that continully reverse the positions until the profit has been achieved. This can only be achieved with the assistance of an expert advisor, whose name will be WOPEA!!
See the jpeg attached for trade example.
It is a chart of GPD/USD and the logic for the trade is simple.
The line represents the weekly open. Trades are only initiated after Monday's daily bar is complete.
If or when price passes DOWN through the open price by 5 pips the EA goes short, if the price reverses back UP through the open by 5 pips, the trade is closed and a new trade long is opened.
The next part is deciding when to close the trade;
Lets go for an extreme example, price goes back and through the open
20 times, to keep it simple we now have a loss of 20 x 10 pips=200 pips.
I have decided that take profit should be 100 pips. This means the price now has to travel 300 pips away from the open price to achieve the target. This recoups the costs of 'turning the trades' and a profit of 100 pips.
If spread and swap costs need to be factured in, the EA will track current costs and add this to the profit target in pips.
To summarise: whatever the costs incurred are to take the trades, the EA will close the position only when these are recovered plus 100 pips.
The logic behind this idea stems from the fact that price HAS to move from any given price by 100, 200, 300, or any number of pips. The weekly open has been chosen as this may have significance to professional traders. With this in mind perhaps the profit target can be made greater than 100 pips, maybe 100% of the costs for turning the trades instead of 100 pips. Testing with an EA will answer this question.
So, will this work? I don't know but I am having a hard time trying to find reasons where this will fail. I am hoping that 'news announcements' won't ruin it! ie where spread widens stopping the trades being placed??
Every system, method I have thought of needs to be pulled apart mercilessly before progressing any further.
If we can't find any reasons where this will fail I will try and get the WOPEA made by putting this in the Platform Tech section on FF.
All reponses appreciated.
Thanks Slim
Attached Image (click to enlarge)
