================================================================================================
Major update to thread on post #297 - http://www.forexfactory.com/showthre...74#post8604674
================================================================================================
Major Edit - 8/11/15, 8/18/15
REPS trading rules -
We've come to the point where we can put our rules to "pen and paper". We may find it necessary to tweak them as we go but I'm trading them as listed below in the attached explorer.
This is a long term trend trading system with an emphasis on low risk, high return.
Instruments - Just about anything that moves, but we may select pairs that tend to trend regularly (think Eur/Aud vs. Eur/Gbp)
Trading Criteria -
1. Initial series entry
Break of the 20 period Donchian Channel on the Weekly chart would constitute the beginning of a trend. Initial entry taken at that point.
Position size at trader's discretion but the goal here is to make this a low risk, or in other words not a big hit to our trading balance. So I'm sticking
with a low % of account balance. .25 - 2% would seem a valid range.
Stoploss on initial entry (and all subsequent entries) will be the opposing side of the 20 period Donchian Channel on the H4 tf.
2. Trade management
We want to get these trades to BE as soon as practicable. There's always going to be a trade off between moving to BE to preserve our trading capital
vs. risking loosing a position by stopping out at BE.Look for market structure and price movement to help determine a good spot but should be
around 50 pips depending on pair.
EDIT 8/18/15 - Trail s/l on the H4 DC until BE
3. Add on trades
New trades will be added on a break of the 20 period Donchian Channel on the Daily tf. Obviously not every break is taken. Location of trade will be
determined when trade will allow for use of MM as discussed below.
EDIT 8/18/15 Aggressive addon - If H4 DC pushes in opposite direction of Daily DC then reverses in direction of trend, then take entry on break of H4 DC with s/l at opposite H4 DC as always.
If we are attempting to enter a trend that is already established we can enter on either of the above 2 criteria if conditions are met.
4. Money management
Once our initial series entry is at BE and risk free we will use the floating profits from our position(s) to fund further positions. We will lock in via moving s/l
50% of our floating profit and use the other 50% for our next entry. For example, if we risk $10 on initial entry and then we have $30 of floating profit
at time of addon trade, we would "lock in" $15 of profit and use $15 to open next position. Typically this would increase our position size each step of
the way, while adding no further risk.
EDIT 8/18/15 - If a trade is taken out at a loss then we only reenter using a MM reset to the lesser of the newly calculated entry stake minus the amount lost in previous trade OR our initial entry risk %...whichever is greater. (Never put locked in "50%" at further risk in financing addons)
5. Series exit
When price hits the opposing 20 period Donchian Channel on the Daily tf this will signify the end of the trend and all positions will be closed.
================================================================================================
ORIGINAL MATERIAL -
Going into the weekend on a "Dog Days of August Trading" Friday afternoon, I thought it might be interesting to develop a new...or at least revised...trading system with the input of the FF community.
It seems typically as we develop a system to trade we look at charts and indicators and how they may tell us where the market is going and how we can enter. As the system evolves (or oftentimes devolves) we make changes and corrections as we are not arriving at our desired outcome in one way or another.
So instead, I'd like to look at it the other way around, so to speak. We'll start with where we want to end up and see if we can't develop a way to get there...
To start with, just a little bit about my trading style.
I favor long term trend following. Ultimately I would like a system that's low maintenance (in terms of computer time), stress free (which means, among other things, low risk) and of course wildly profitable...
Don't get me wrong...I like to dabble in shorter term trading, higher risk/leverage ideas, etc. etc. But that's mainly a past time or trading fix solution. For a go to, make a living system, those just won't work for me.
Everyone's welcome to chime in and participate and share ideas. That doesn't mean I'll necessarily incorporate them in what I'm doing, or in this thread, but I fully expect to get some good ideas from you guys as hopefully I share a few with you.
I just ask that everyone play nice and get along...
So....off we go
Major update to thread on post #297 - http://www.forexfactory.com/showthre...74#post8604674
================================================================================================
Major Edit - 8/11/15, 8/18/15
REPS trading rules -
We've come to the point where we can put our rules to "pen and paper". We may find it necessary to tweak them as we go but I'm trading them as listed below in the attached explorer.
This is a long term trend trading system with an emphasis on low risk, high return.
Instruments - Just about anything that moves, but we may select pairs that tend to trend regularly (think Eur/Aud vs. Eur/Gbp)
Trading Criteria -
1. Initial series entry
Break of the 20 period Donchian Channel on the Weekly chart would constitute the beginning of a trend. Initial entry taken at that point.
Position size at trader's discretion but the goal here is to make this a low risk, or in other words not a big hit to our trading balance. So I'm sticking
with a low % of account balance. .25 - 2% would seem a valid range.
Stoploss on initial entry (and all subsequent entries) will be the opposing side of the 20 period Donchian Channel on the H4 tf.
2. Trade management
We want to get these trades to BE as soon as practicable. There's always going to be a trade off between moving to BE to preserve our trading capital
vs. risking loosing a position by stopping out at BE.
EDIT 8/18/15 - Trail s/l on the H4 DC until BE
3. Add on trades
New trades will be added on a break of the 20 period Donchian Channel on the Daily tf. Obviously not every break is taken. Location of trade will be
determined when trade will allow for use of MM as discussed below.
EDIT 8/18/15 Aggressive addon - If H4 DC pushes in opposite direction of Daily DC then reverses in direction of trend, then take entry on break of H4 DC with s/l at opposite H4 DC as always.
If we are attempting to enter a trend that is already established we can enter on either of the above 2 criteria if conditions are met.
4. Money management
Once our initial series entry is at BE and risk free we will use the floating profits from our position(s) to fund further positions. We will lock in via moving s/l
50% of our floating profit and use the other 50% for our next entry. For example, if we risk $10 on initial entry and then we have $30 of floating profit
at time of addon trade, we would "lock in" $15 of profit and use $15 to open next position. Typically this would increase our position size each step of
the way, while adding no further risk.
EDIT 8/18/15 - If a trade is taken out at a loss then we only reenter using a MM reset to the lesser of the newly calculated entry stake minus the amount lost in previous trade OR our initial entry risk %...whichever is greater. (Never put locked in "50%" at further risk in financing addons)
5. Series exit
When price hits the opposing 20 period Donchian Channel on the Daily tf this will signify the end of the trend and all positions will be closed.
================================================================================================
ORIGINAL MATERIAL -
Going into the weekend on a "Dog Days of August Trading" Friday afternoon, I thought it might be interesting to develop a new...or at least revised...trading system with the input of the FF community.
It seems typically as we develop a system to trade we look at charts and indicators and how they may tell us where the market is going and how we can enter. As the system evolves (or oftentimes devolves) we make changes and corrections as we are not arriving at our desired outcome in one way or another.
So instead, I'd like to look at it the other way around, so to speak. We'll start with where we want to end up and see if we can't develop a way to get there...
To start with, just a little bit about my trading style.
I favor long term trend following. Ultimately I would like a system that's low maintenance (in terms of computer time), stress free (which means, among other things, low risk) and of course wildly profitable...
Don't get me wrong...I like to dabble in shorter term trading, higher risk/leverage ideas, etc. etc. But that's mainly a past time or trading fix solution. For a go to, make a living system, those just won't work for me.
Everyone's welcome to chime in and participate and share ideas. That doesn't mean I'll necessarily incorporate them in what I'm doing, or in this thread, but I fully expect to get some good ideas from you guys as hopefully I share a few with you.
I just ask that everyone play nice and get along...
So....off we go