Hello FF Community,
In this thread, I will introduce a straightforward trading system that relies on two indicators: the Five-Star Signals indicator (attached to this post) and the 100 SMA (Simple Moving Average).
Rules: 
While the system may encounter losing trades, the fundamental principle is to capture opportunities with a high risk-to-reward ratio that aligns with the prevailing trend. Even when employing a 1:3 risk-to-reward ratio, the system remains profitable with just a 3/10 win rate (3 * 3(TP) > 7 * 1(SL)). This implies that if you risk 1% of your capital in each trade, achieving 3 winning trades out of 10 would result in a profit of 3 * 3 = 9% and a loss of 7%, equaling a net gain of +2% of the capital.
Examining the examples provided, the first entry in EUR/USD shows a RR ratio of 1 to 5.5, and the second entry shows a ratio of 2.3 ((2.3+5.5)/2 = 3.9 average RR ratio of winning trades). In the case of EUR/GBP, the first entry hits the stop loss, but entry 2 boasts a 4.5 RR ratio, entry 3 has a ratio of 3.6, and entry 4 has a ratio of 1.5 ((4.5+3.6+1.5)/3 = 3.2).
Indicator & Template:
In this thread, I will introduce a straightforward trading system that relies on two indicators: the Five-Star Signals indicator (attached to this post) and the 100 SMA (Simple Moving Average).
Rules:
- Long Positions: Enter when the price is above the 100 SMA, and the Five-Star Signals indicator provides a buy signal.
- Short Positions: Enter when the price is below the 100 SMA, and the Five-Star Signals indicator generates a sell signal.
- Set your stop loss at the high (for sell positions) or low (for buy positions) of the signal candle.
- Exit the trade when the price crosses (closes above/below) the 100 SMA or when the Five-Star Signals indicator gives an opposite signal.
I will also attach the indicator & the template to this post. Please note that the Five-Star Signals indicator does not repaint.
Examples:
Here are some few illustrative examples:
While the system may encounter losing trades, the fundamental principle is to capture opportunities with a high risk-to-reward ratio that aligns with the prevailing trend. Even when employing a 1:3 risk-to-reward ratio, the system remains profitable with just a 3/10 win rate (3 * 3(TP) > 7 * 1(SL)). This implies that if you risk 1% of your capital in each trade, achieving 3 winning trades out of 10 would result in a profit of 3 * 3 = 9% and a loss of 7%, equaling a net gain of +2% of the capital.
Examining the examples provided, the first entry in EUR/USD shows a RR ratio of 1 to 5.5, and the second entry shows a ratio of 2.3 ((2.3+5.5)/2 = 3.9 average RR ratio of winning trades). In the case of EUR/GBP, the first entry hits the stop loss, but entry 2 boasts a 4.5 RR ratio, entry 3 has a ratio of 3.6, and entry 4 has a ratio of 1.5 ((4.5+3.6+1.5)/3 = 3.2).
Indicator & Template:
