Is this more or less a coin flip entry with an attractive RR of 1:5 (assuming you use the length of the initial move as TP) or is there an another edge?
No backtested data. It's not a coin flip entry if you understand market structure. That's something I still have a hard time with on occasion, but trading successfully does not require the use of indicators as proven by other threads, and in time - this one too.
Instead of buying the breakouts, we are buying the 50% retracement with the expectation of a trend continuation.
The edge of this system is it exploits the markets tendency of mean revision in a trending market by entering at the 50% level and then exploits the markets tendency to have fat tails in a trending market, breaking the previous high/low and the continuation move being larger than the retracement leg. It should work just fine in a trending market and although simple is far better than the majority of stuff posted on here
The problem with this system is that it will not work during a non trending market (will not work most of the time), when the moves are more likely to be around 100% than 50%. To fix this would require a more non-systematic approach.
Some adive would be to only use this system during specific times when the market is more likely to be trending, so time becomes an indicator. Most other non systematic improvements would require learning to trade rather than trading a system. the downside to this is it requires a lot of time and effort, the upside is you can trade both trending and non trending markets and anything in between as long as it is moving enough to cover transaction costs. Or it will just let you know when to trade and when to not if you are specialising in a certain type of market. Another upside is very few people that post in this forum will actually put in the time and effort to do this.
The edge of this system is it exploits the markets tendency of mean revision in a trending market by entering at the 50% level and then exploits the markets tendency to have fat tails in a trending market, breaking the previous high/low and the continuation move being larger than the retracement leg. It should work just fine in a trending market and although simple is far better than the majority of stuff posted on here The problem with this system is that it will not work during a non trending market (will not work most of the time), when...
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Show me a system that works "most" the time. I'm going for quality, high return trades. Between the weekly and the 5min chart, I can show you a trending market, it just depends on how flexible you are willing to be with this system. If you want to trade only the 1hr or 5min charts, then yes, you might have to sit through some noise before the larger trend picks up steam.
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To fix this would require a more non-systematic approach. Some advice would be to only use this system during specific times when the market is more likely to be trending, so time becomes an indicator.
That's usually during regular trading hours. I try my best not to trade when the markets not open. For me, london doesn't open until 3am.
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Most other non systematic improvements would require learning to trade rather than trading a system. the downside to this is it requires a lot of time and effort, the upside is you can trade both trending and non trending markets and anything in between as long as it is moving enough to cover transaction costs. Or it will just let you know when to trade and when to not if you are specialising in a certain type of market. Another upside is very few people that post in this forum will actually put in the time and effort to do this.
The edge of this system is it exploits the markets tendency of mean revision in a trending market by entering at the 50% level and then exploits the markets tendency to have fat tails in a trending market, breaking the previous high/low and the continuation move being larger than the retracement leg. It should work just fine in a trending market and although simple is far better than the majority of stuff posted on here The problem with this system is that it will not work during a non trending market (will not work most of the time), when...
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I understand how it could work. I was just wondering if there was any substantiation that this has a positive expectancy.
Based on the 1hr charts, we have this double bottom forming, so I'm going to see how this pans out. I'm considering taking a short based off the 15min charts if
price can get up to one of these trend lines, however, if that double bottom holds, taking a long trade off the pullback will be a better move i think. IF price breaks
this double bottom, then any retracement upwards may be a good short opportunity.
Cancelled buy orders for usd/cad. I'm going to see how it reacts to the TL, and I might take a trade off the TL if it holds up. (see tl on above charts).
