This is one of the many system that I use and so far this is the most profitable one. Here is the setup:
1) Bollinger Band 20,2
2) Stochastic 9,3,3
I use 4H charts, using EURUSD, GBPUSD, USDCHF, USDJPY, AUDUSD
For the Trender system:
Long Entry:
1) As Image 1, the prior candles must close in the area between the middle bollinger line and the upper bollinger line, preferably a strong uptrend candle.
2) Now wait for retracement in the following candles, the candles must not breach the middle bollinger band, it's fine if it's just touching the middle bollinger line. Trade can be considered if the middle line is breached and followed by a strong reversal candle pattern that breaches the middle line again in the long direction
3) When the fast stoch line changes direction upwards, enter long at the close of the candle. Note that only change of direction matters, the oversold/overbought areas are not considered.
4) Stop loss is the recent lowest swing and take profit is twice the stop loss size.
Short Entry:
1) The prior candles must close in the area between the middle bollinger line and the lower bollinger line, preferably a strong downtrend candle.
2) Now wait for retracement in the following candles, the candles must not breach the middle bollinger band, it's fine if it's just touching the middle bollinger line. Trade can be considered if the middle line is breached and followed by a strong reversal candle pattern that breaches the middle line again in the short direction
3) When the fast stoch line changes direction downwards, enter short at the close of the candle. Note that only change of direction matters, the oversold/overbought areas are not considered.
4) Stop loss is the recent highest swing and take profit is twice the stop loss size.
Special rules:
1) The candle pattern must signify bottom/top, no continuation patterns are considered
2) The success rate is about 40% to 50%, it is enhanced by using smart money management techniques (contact me privately to eloborate as it is a commercial technique)
3) Usually, a continuous streaks of losses will be followed by a continuous streaks of wins, so don't despair and follow these rules religously, especially in ranging times
4) Exercise caution if the bollinger bands narrow
5) Don't hesitate to open successive positions if the setup occurs
6) Opposite positions must be opened if the setup occurs, so you must be able to hedge or get 2 subaccounts
7) You can move to breakeven at the same size of the stop loss, trailing stops don't seem to work in long term.
8) If the candle after the retracement shoots beyond the recent swing high/low, the probabilities are lower. The reversing candles must be within the recent swing high/low, also beware of candles that are too large.
I have traded this system live for past 2 years with 30% to 40% returns PA, if anyone could backtest further than that, I would appreciate it. Please feel free to comment.
1) Bollinger Band 20,2
2) Stochastic 9,3,3
I use 4H charts, using EURUSD, GBPUSD, USDCHF, USDJPY, AUDUSD
For the Trender system:
Long Entry:
1) As Image 1, the prior candles must close in the area between the middle bollinger line and the upper bollinger line, preferably a strong uptrend candle.
2) Now wait for retracement in the following candles, the candles must not breach the middle bollinger band, it's fine if it's just touching the middle bollinger line. Trade can be considered if the middle line is breached and followed by a strong reversal candle pattern that breaches the middle line again in the long direction
3) When the fast stoch line changes direction upwards, enter long at the close of the candle. Note that only change of direction matters, the oversold/overbought areas are not considered.
4) Stop loss is the recent lowest swing and take profit is twice the stop loss size.
Short Entry:
1) The prior candles must close in the area between the middle bollinger line and the lower bollinger line, preferably a strong downtrend candle.
2) Now wait for retracement in the following candles, the candles must not breach the middle bollinger band, it's fine if it's just touching the middle bollinger line. Trade can be considered if the middle line is breached and followed by a strong reversal candle pattern that breaches the middle line again in the short direction
3) When the fast stoch line changes direction downwards, enter short at the close of the candle. Note that only change of direction matters, the oversold/overbought areas are not considered.
4) Stop loss is the recent highest swing and take profit is twice the stop loss size.
Special rules:
1) The candle pattern must signify bottom/top, no continuation patterns are considered
2) The success rate is about 40% to 50%, it is enhanced by using smart money management techniques (contact me privately to eloborate as it is a commercial technique)
3) Usually, a continuous streaks of losses will be followed by a continuous streaks of wins, so don't despair and follow these rules religously, especially in ranging times
4) Exercise caution if the bollinger bands narrow
5) Don't hesitate to open successive positions if the setup occurs
6) Opposite positions must be opened if the setup occurs, so you must be able to hedge or get 2 subaccounts
7) You can move to breakeven at the same size of the stop loss, trailing stops don't seem to work in long term.
8) If the candle after the retracement shoots beyond the recent swing high/low, the probabilities are lower. The reversing candles must be within the recent swing high/low, also beware of candles that are too large.
I have traded this system live for past 2 years with 30% to 40% returns PA, if anyone could backtest further than that, I would appreciate it. Please feel free to comment.
Attached Image (click to enlarge)
Adaptive autotrading is the future...