**** IT'S ALL IN THE TITLE ****
What's new is old and what's old is new. I'm sure I'm not the first person to post a system like this, I learned this set up from a guy who use to trade the GOLD pits in Chicago. In the Year 2000 he retired and started trading electronically, says he hasn't traded any other way since, I took his word for it and as of now have been testing it on Demo.
The system consists of a 3 Bar Fractal as the entry criteria and a moving average as a filter, nothing more and nothing less.
The rules of this system were taken from great a thread which was started almost a decade ago here is that link >>>>> Buy sell line trading | Forex Factory All credit goes to 60minuteman. All I did was change the system to a fractal entry since it resonated more with my personality and risk tolorance.
RULE 1 TREND
IF PRICE IS ABOVE THE 50SMA WE WILL ONLY LONG.
IF PRICE IS BELOW THE 50 SMA WE WILL ONLY SHORT
IF THE 50SMA IS FLAT OR PRICE IS CHOPPING ABOVE AND BELOW THEN THE TRADE IS HIGH RISK AND YOUR WIN RATE WILL BE AFFECTED.
ideally we are looking for a nice slope on the 50sma showing a sustained trend in one direction...
RULE 2 PRICE ACTION
3 BAR FRACTAL LOW FOR LONG (BLUE)
3 BAR FRACTAL HIGH FOR SHORT (RED)
WE CALL THIS A SIGNAL
RULE 3 ENTRY
LONGS- price must break the high of the fractal by 1 pip to confirm signal.
SHORTS - price must break the low of the fractal by 1 pip to confirm the signal
(don't wait for this bar to close, once you exceed the high or low of fractal enter the trade)
****IMPORTANT*****
ENTRY MUST BE TRIGGERED ON THE VERY NEXT CANDLE
WE ARE LOOKING FOR MOMENTUM BACK IN THE DIRECTION OF THE TREND.
***** If bar after fractal doesn't break high (Longs) or Low (Sells) we skip the trade and wait for the next set up, which won't be long.******
RULE 4 STOP LOSS
STOPS ARE PLACED 1 PIP ABOVE THE HIGH OF THE FRACTAL FOR SHORTS. AND
1PIP BELOW THE LOW OF THE FRACTAL FOR LONGS.
RULE 5 POSITION SIZING
ALL TRADES SHOULD HAVE A RISK OF 2%, REGARDLESS OF PIP SIZE YOU MUST ADJUST YOUR LOT SIZE SO YOUR RISK IS EQUAL ON EVERY TRADE..... VERY IMPORTANT !!!!!!!!
RULE 6 TRADE MANAGEMENT
YOUR TARGET SHOULD BE 1/1
AT 1/1 R/R MOVE YOUR STOPS TO BREAK EVEN
if your risk is 50 pips you would move your stops at +50 pips.
AT 2/1 R/R TAKE SOME PROFITS OFF THE TABLE. THE AMOUNT IS ENTIRELY DOWN TO YOUR RISK TOLERANCE, I WILL USUALLY CLOSE 1/2 OR ALL OF MY POSITION.
***** If bar after fractal doesn't break high (Longs) or Low (Sells) we skip the trade and wait for the next set up, which won't be long.
What's new is old and what's old is new. I'm sure I'm not the first person to post a system like this, I learned this set up from a guy who use to trade the GOLD pits in Chicago. In the Year 2000 he retired and started trading electronically, says he hasn't traded any other way since, I took his word for it and as of now have been testing it on Demo.
The system consists of a 3 Bar Fractal as the entry criteria and a moving average as a filter, nothing more and nothing less.
The rules of this system were taken from great a thread which was started almost a decade ago here is that link >>>>> Buy sell line trading | Forex Factory All credit goes to 60minuteman. All I did was change the system to a fractal entry since it resonated more with my personality and risk tolorance.
RULE 1 TREND
IF PRICE IS ABOVE THE 50SMA WE WILL ONLY LONG.
IF PRICE IS BELOW THE 50 SMA WE WILL ONLY SHORT
IF THE 50SMA IS FLAT OR PRICE IS CHOPPING ABOVE AND BELOW THEN THE TRADE IS HIGH RISK AND YOUR WIN RATE WILL BE AFFECTED.
ideally we are looking for a nice slope on the 50sma showing a sustained trend in one direction...
RULE 2 PRICE ACTION
3 BAR FRACTAL LOW FOR LONG (BLUE)
3 BAR FRACTAL HIGH FOR SHORT (RED)
WE CALL THIS A SIGNAL
RULE 3 ENTRY
LONGS- price must break the high of the fractal by 1 pip to confirm signal.
SHORTS - price must break the low of the fractal by 1 pip to confirm the signal
(don't wait for this bar to close, once you exceed the high or low of fractal enter the trade)
****IMPORTANT*****
ENTRY MUST BE TRIGGERED ON THE VERY NEXT CANDLE
WE ARE LOOKING FOR MOMENTUM BACK IN THE DIRECTION OF THE TREND.
***** If bar after fractal doesn't break high (Longs) or Low (Sells) we skip the trade and wait for the next set up, which won't be long.******
RULE 4 STOP LOSS
STOPS ARE PLACED 1 PIP ABOVE THE HIGH OF THE FRACTAL FOR SHORTS. AND
1PIP BELOW THE LOW OF THE FRACTAL FOR LONGS.
RULE 5 POSITION SIZING
ALL TRADES SHOULD HAVE A RISK OF 2%, REGARDLESS OF PIP SIZE YOU MUST ADJUST YOUR LOT SIZE SO YOUR RISK IS EQUAL ON EVERY TRADE..... VERY IMPORTANT !!!!!!!!
RULE 6 TRADE MANAGEMENT
YOUR TARGET SHOULD BE 1/1
AT 1/1 R/R MOVE YOUR STOPS TO BREAK EVEN
if your risk is 50 pips you would move your stops at +50 pips.
AT 2/1 R/R TAKE SOME PROFITS OFF THE TABLE. THE AMOUNT IS ENTIRELY DOWN TO YOUR RISK TOLERANCE, I WILL USUALLY CLOSE 1/2 OR ALL OF MY POSITION.
***** If bar after fractal doesn't break high (Longs) or Low (Sells) we skip the trade and wait for the next set up, which won't be long.