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Attachments: Please suggest a simple & effective Method/System of "Trading System" Forum to newbie
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Please suggest a simple & effective Method/System of "Trading System" Forum to newbie

  • Post #1
  • Quote
  • First Post: Jun 27, 2007 12:12pm Jun 27, 2007 12:12pm
Dear Friends in FF,

I have read most threads of 5 stars trading strategys and methods form "Trading System" Forums of FF, but certain systems have more than 3 indicators and some of them are new to me, eg. vages tunnel and sidus. (I traded stocks before and know only traditional TA indicators, like MACD, Stoch., MAs, William %R, RSI, as well as the concept of triple-timeframes)

Can any friends suggest a relatively simple but effective method/system from "Trading System" Fourm to a newbie, like me. It is better for this method/system to have less then 3 traditional indicators and less then 3 timeframes.

Due to full of frustration in past and present jobs, I am eager to learn and trade for a living (not for rich).

Thanks a lot in advance.
Living needs faith!
Quoting Faith
Dear Friends in FF,

I have read most threads of 5 stars trading strategys and methods form "Trading System" Forums of FF, but certain systems have more than 3 indicators and some of them are new to me, eg. vages tunnel and sidus. (I traded stocks before and know only traditional TA indicators, like MACD, Stoch., MAs, William %R, RSI, as well as the concept of triple-timeframes)

Can any friends suggest a relatively simple but effective method/system from "Trading System" Fourm to a newbie, like me. It is better for this method/system to have less then 3 traditional indicators and less then 3 timeframes.

Due to full of frustration in past and present jobs, I am eager to learn and trade for a living (not for rich).

Thanks a lot in advance.
Have a look over at the James16 thread. No indicators needed. Price action.

Best of luck,
Mike
Thanks, Mike.
Living needs faith!
Hey Faith,

Before getting into the whole system research/tweaking phase, spend some time studying trends. Not how to trade the trend, or trend-following system or whatnot, JUST study trending charts and the basics behind a healthy trend.

Understanding trends is CRUCIAL for trading. Until you moreless understand that, I'd avoid wasting time with systems. It's like trying to learn how to drive before understanding what the wheel or the gear-stick are for.
Quoting WTB
Hey Faith,

Before getting into the whole system research/tweaking phase, spend some time studying trends. Not how to trade the trend, or trend-following system or whatnot, JUST study trending charts and the basics behind a healthy trend.

Understanding trends is CRUCIAL for trading. Until you moreless understand that, I'd avoid wasting time with systems. It's like trying to learn how to drive before understanding what the wheel or the gear-stick are for.

Dear Hector,

Thanks you for your recommendation.

Trends is very important. Traders should trade in the direction of the market tide and take advantage of the waves but ignore the ripples. (from p.236 of the book "Trading for a Living")
Living needs faith!
faith,

i think, it all starts with your goal...what do you want to achieve ?

second...what EXACTLY do you want to do ?

what market conditions, setup, price action patterns, time-of-day charateristics, market dynamics etc do you want to exploit ?

if you have found out, you can design you "system" around this
Buy the following pairs
EURUSD
GBPUSD
USDCHF
USDJPY

Sometime during the next trading day, your account will show a profit. CLose all trades, bank the profit, and start again. You will have drawdowns, but you will also have profits. Hang in with the drawdowns. They won't get too large because this is simply a dollar hedge.
Might want to take a look at Woodies CCI. One indicator, One timeframe.
Good luck!
Quoting bhale
Buy the following pairs
EURUSD
GBPUSD
USDCHF
USDJPY

Sometime during the next trading day, your account will show a profit. CLose all trades, bank the profit, and start again. You will have drawdowns, but you will also have profits. Hang in with the drawdowns. They won't get too large because this is simply a dollar hedge.
This is pretty-much a "no-brainer" system (just what I need!). How well does it work for you bhale?
I'm not 100% keen on the system, because it seems to me that it would just be a play on the carry trade against the (EURJPY, GBPJPY, EURCHF and GBPCHF). As long as the JPY and CHF are weak, you'll be in great shape.

As far as closing and starting over, also doesn't make sense. Unless you wait for a pull-back or you're buying at a specific time of day every day (in essence dollar-cost-averaging), then it's pointless...you're just paying the spread for no good reason.

It's hard to argue, though, as long as the JPY and CHF remain weak, you're in pretty good shape.

Quoting BeachBum
This is pretty-much a "no-brainer" system (just what I need!). How well does it work for you bhale?
Quoting mrmikal
I'm not 100% keen on the system, because it seems to me that it would just be a play on the carry trade against the (EURJPY, GBPJPY, EURCHF and GBPCHF). As long as the JPY and CHF are weak, you'll be in great shape.

As far as closing and starting over, also doesn't make sense. Unless you wait for a pull-back or you're buying at a specific time of day every day (in essence dollar-cost-averaging), then it's pointless...you're just paying the spread for no good reason.

It's hard to argue, though, as long as the JPY and CHF remain weak, you're in pretty good shape.
I can't argue with your logic; but in the last 30 minutes (I've got a little down-time), I have backtested this "theory", buying at NY close and selling 24 hours later, day-after-day, and the results have me staggering........ You and I are not novice traders, but I can't dispute the results using Daily charts.........huh?
Quoting BeachBum
I can't argue with your logic; but in the last 30 minutes (I've got a little down-time), I have backtested this "theory", buying at NY close and selling 24 hours later, day-after-day, and the results have me staggering........ You and I are not novice traders, but I can't dispute the results using Daily charts.........huh?
I assume this sytem is traded without stoploss
Maybe you should take a look at jacko's method. No indicators, just trend lines, s/r, 50% fib and round numbers. Pretty simple.
http://www.forexfactory.com/showthread.php?t=27286
Quoting bundubill
I assume this sytem is traded without stoploss
Not so..............I quickly put together a spreadsheet for the first six months of 2007 for EUR/USD, using a startegy of buying at 5PM ET and selling 23.9 hours later. The profitable trades required a S/L equal to approximately .5 x ATR(130). The trades that went farther than that in the wrong direction were all losers. This reasonably sized S/L eliminated large drawdowns and losses and generated an overall profit. When I have some time; I will do the same for the other 3 major pairs.
Quoting treypip24
Maybe you should take a look at jacko's method. No indicators, just trend lines, s/r, 50% fib and round numbers. Pretty simple.
http://www.forexfactory.com/showthread.php?t=27286

Dear trey,

Thanks for your recommendation.

Jacko's method is good but it seems too idea for a newbie.

Also, this method needs much more intuition which needs more trading experience and it is not easy to be catched by a newbie, like me.

However, I agree that an experience traders would finally use jacko's method.
Living needs faith!
Quoting BeachBum
Not so..............I quickly put together a spreadsheet for the first six months of 2007 for EUR/USD, using a startegy of buying at 5PM ET and selling 23.9 hours later. The profitable trades required a S/L equal to approximately .5 x ATR(130). The trades that went farther than that in the wrong direction were all losers. This reasonably sized S/L eliminated large drawdowns and losses and generated an overall profit. When I have some time; I will do the same for the other 3 major pairs.
I want to finish this "little project". Looking at the 4 Majors from 1-1-2007 thru 6-30-2007, I was able to generate over 1700 total pips profit using the "no-brainer" strategy I outlined earlier. Stop losses were: EUR/USD=50; GBP/USD=80; USD/CHF=60; USD/JPY=55. Buy at 5PM ET, sell at 4:59PM ET. It's a lot of trading for the pips gained, but many traders would probably be happy with an average of 15 pips gained per day, and there is no thought involved: just buy and sell.

I'm not advocating anyone trade this method, this was just an interesting backtest excercise. And perhaps it will stimulate someone's thinking in a positive way. I'm done...............over and out!
Well done BB thanks for that. Have you any views on how vulnerable the strategy is to fundamentals and how much these would have to change to make it unprofitable ?
Quoting bundubill
Well done BB thanks for that. Have you any views on how vulnerable the strategy is to fundamentals and how much these would have to change to make it unprofitable ?
bundubill.....................thanks!

This was just a little excercise for me, not too serious; so I think if this concept interests you, you should do some backtesting on a day-by-day basis comparing each pair's price action. I am purely a "technical" trader; I don't pay attention to fundamentals except NFP (I take the day off, more from habit than anything else). However, remember my backtest included all price action as a result of fundamentals. I do think that a trader could probably use this concept along with a little monitoring and be successful. If you bought all four pairs and then looked at what is happening to the prices after the London open, you could then make a decision about the current trend, and close the "losing pairs" while allowing the "winners" to continue. Moving the S/L to B/E at the appropriate time would increase profit too. But these are just random thoughts and observations that would need back and forward testing. As I wrote earlier; this information might serve as the basis for developing a successful trading strategy and that's what bhale was suggesting............a dollar hedge system. I believe there are many "systems" to Forex trade that will generate a profit when used correctly. The biggest obstacles for most traders are IMO money management and trading psychology (it was for me!). All the best!
Thanks BB.
  • Post #20
  • Quote
  • Edited 5:17am Jul 3, 2007 4:38am | Edited 5:17am
I caught this thread last Friday before it got moved to this section. Thanks, BeachBum, for following through and producing some preliminary numbers and calculating S/L levels.

Since this method is about as simple as it gets, I think I'll have it coded as an EA and give it a test.

If it produces 200 brainless pips a month, that's pretty damn good!

Like BeachBum, I believe that Forex is loaded with little tricks like this USD hedge. So be on the lookout for them. You strap 2 or 3 of these gimmick methods together - and suddenly you've got all of the pips you ever needed. We should find out if this is one of them.

Now there does seem to be two different approaches discussed so far. Bhale said to check in from time-to-time throughout the day - and you'll find yourself in profit. While BeachBum runs the trades to 4:59 PM, EST and re-loads at 5:00 PM, EST.

I'll probably use BeachBum's technique for my EA (easier to code). But I did try it Bhale's way yesterday - took a peek and found my equity up 1.4% ($5,000 account, 0.30 lots per trade). So I took my new demo money and ran.

If I get the EA up and running, I'll try to report back with my results for everybody.
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