Simple and profitable trading style

Focusing on only one strategy means we have to wait for eternity before we can see setup

Waiting for NZDCAD and NZDUSD

Their positive correlated pairs have been bullish

Joined the bulls on them

What a volatile day.

After a long absence (years) I have returned to FF with an idea that was kind of bubbling away for some time and which I would like to get some feedback on.
The core idea owes a great deal to Fibonacci and was further tweaked by a post from Steve Hopwood https://www.forexfactory.com/thread/...liments-simone. Other bits and bobs owe a lot to the THV system forexfactory.com/thread/127271-thv-system-final-edition which Cobra and many others worked on so there is really nothing original here, but bear with me please.

Here is my thinking:-
1. Fib essentially breaks up the price action into 6 slices giving 3 Resistance and 3 Support levels, with levels 2 and 3 being of the most interest to currency traders.
2. I/we want to capture the times when price is moving - which in a lot of cases may occur once 1 day in a week but depending on the pair may get to as many as 5 or more.
3. There is no crystal ball BUT...we can assume based on past history that price will range from low to high and back again - even in a strongly trending period there are pullbacks and breakouts along the way.

Based on that I got to thinking what if I only enter a trade when the price makes a new high or low? That is - enter a Sell at new High/Buy at new Low - and set my TP to the opposite High/Low.

There are some pretty obvious issues to be addressed so let me list a few of them:
1. The price may simply continue setting new highs for days before a pullback. What sort of stop loss strategy should I implement?
2. The price may only pull back a relatively short distance before resuming a strong trend. What sort of profit target should I set?
3. Even with good money management failed trades will happen. Is there a viable loss recovery strategy that can address failed trades?
4. Should I try to enter a trend which starts somewhere between the supposed High/Low prices? How is the High/Low price determined?

I am sure there are plenty more so hopefully this can start a discussion and maybe a thread to look at developing a system?

In any case I have made a start as follows:
1. Use a lookback approach which assumes that price action for the last 10 days is sufficient to establish a starting post and range for the initial High/Low prices.
2. Use the high 25% and low 25% of the range as the "trade entry zone". We only trigger an entry inside these zones.
3. If a new high/low is established we enter as above.
4. An alternative entry could be triggered in the zone if other strict criteria are met. I have implemented the following rules on a trial basis:
For a Buy (opposite for a sell, natch)
a) 3MA above 20MA and both bullish
b) Awesome Oscillator and Accelerator both bullish
c) OSMA is bullish
d) MACD bullish
e) Smoothed Heiken Ashi bar is Bull
f) Candle just closed was a Bull but not a DOJI
g) Double Smoothed Stochastic is bullish
h) 3MA on next lower time frame is bullish
Quite a list I know but I want as much assurance as I can get that the entry is not based on fools gold.

5. I set an absolute initial $ DD of $50 or 22.25% of the account balance - whichever is least.
6. I set an initial risk of 2.75% of free margin which is then used to size the position
7. If the trade is successful I take profit at either (1) Fib Support Level 2; or (2) the TOP of the BUY ZONE - the bottom 25% area of the 10 day price action.
8. If the trade fails and hits SL then (1) increase the $ DD by the initial $ DD - now=$100; (2) increase the position of the next trade by doubling the position thus:
Failed trade 1 SL $50 LotSize 0.01
2 $100 LotSize 0.02
3 $150 LotSize 0.03 ..... etc
9. I check that the position size never exceeds the maximum lot size possible by assuming an absolute maximum Free Margin draw of (again) 22.25%

In testing to date I have found that the above scenario seems to be profitable with low absolute and relative DD and good numbers from QuantAnalyzer - that is the Sharpe, CAGR, Expectancy and other numbers are all in the good to great range.

I have been running this "live" on a couple of pairs for the past few weeks (using Demo accounts of course) and am seeing good returns.

Unfortunately I only have a low-end desktop and back-testing has been very slow so establishing the right time frames and parameter settings is extremely tedious.
If someone would like to walk with me on this journey I would be happy to share my very poor code with the aim of further development and hopefully a profitable outcome.
I have attached a regrettably short back test report and brief video showing the system in action.
If you believe I'm chasing my tail you wouldn't be alone - my wife has told me this for years now. All contributions and reviews (good, bad, ugly) received happily - just don't get too personal - I am a sensitive soul.

Best
Bryan

Bullish Engulfing sent the pair up like rocket

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It was a great continuation setup as it was formed on existing uptrend and was supported by fundamentals from the UK this morning

Second bullish signal. The first one was faces with retracement. Am still holding on to the position and am not adding

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Unique setups even as market scars me from taking positions

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After painful Patience

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Both have closed above

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upper band

I just wish their movement starts new trend

Am out

I caught these two on 1 hr. And so will be following it closely more on the TF instead of my usual 30 mins

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Correlation can be sweet when they work out, but purges account when they make U-turn

Caught all these

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The bearish signal on GBPJPY .New strategy I have introduced into my entry point

I will be following and updating on this pair from Monday

Painful that I cannot place it on live account as I already have USDCHF short on live account. So painful