Hi everyone,
Im very new to forex trading, in fact I know nothing about this market.
But I just wanna throw up an idea and get some feedback as to if this sort of strategy has a chance.
From my research in trading stocks, I have found that in intraday timeframes, mean reversion systems seem to work very well. I have no reason to think otherwise in forex.
Im thinking this would work best on pairs with tight spreads and wide ranges.
For the entry we look at the direction of the trend and use a ROC filter and take a position in the same direction of the trend.
There are 2 exits, a stop loss at Z pips and a profit target at Z pips.
For example, if the longterm uptrend is up, and the pair has dropped X pips in Y bars, then go LONG with a stop loss at Z pips, and a profit target of Z pips.
We can optimise the values for X and Y and Z.
Would this type of system have a high hit rate?
Im looking at designing a system with a high win% (70-80%) and low R/R (~1)
Does this sound like a viable strategy?
Why wouldn't this work?
I'd be keen to hear everybodys thoughts.
Thanks,
Nizar.
Im very new to forex trading, in fact I know nothing about this market.
But I just wanna throw up an idea and get some feedback as to if this sort of strategy has a chance.
From my research in trading stocks, I have found that in intraday timeframes, mean reversion systems seem to work very well. I have no reason to think otherwise in forex.
Im thinking this would work best on pairs with tight spreads and wide ranges.
For the entry we look at the direction of the trend and use a ROC filter and take a position in the same direction of the trend.
There are 2 exits, a stop loss at Z pips and a profit target at Z pips.
For example, if the longterm uptrend is up, and the pair has dropped X pips in Y bars, then go LONG with a stop loss at Z pips, and a profit target of Z pips.
We can optimise the values for X and Y and Z.
Would this type of system have a high hit rate?
Im looking at designing a system with a high win% (70-80%) and low R/R (~1)
Does this sound like a viable strategy?
Why wouldn't this work?
I'd be keen to hear everybodys thoughts.
Thanks,
Nizar.