Greetings,
The following is a complete profitable system that you can use at your discretion. It is very simple, includes charts and indicator, entry, exit, and money management, and it makes thousands of pips per year (over 200% per year with positive swaps and compounding). It also survived the 1600 pip loss of GBP/JPY starting on 2/22/07 just fine (though not without large drawdown). This system aims to take some profit out of the middle, not guess highs and lows, and it takes advantage of the huge swap rate on the GBP/JPY.
I am sure that there will be the usual “if you just added a ziz zag pipsical oscillating MACD you could improve your pips by 1000%” but my point in using only one indicator is to keep it as simple as possible so that anyone can use this and make money doing so.
GBP/JPY is a carry trade, and as such its directional movement is assumed to be up, though it suffers large corrections for several weeks at a time. So because this pair moves up as its bias, we will trade it long only. This system is also easily backtestable.
Charts and Indicator:
GBP/JPY 4H
Only RSI (14 period)
Rules:
Entry:
Enter long with 1 lot (see money management below) whenever RSI touches 30 from above or goes below (at close of 4h bar).
Trade Management:
Upon entering long, place a buy stop order 250 pips below entry, another buy stop order 500 pips below entry, another at 750 below, another at 1000, another at 1250 and the final one at 1500.
Exit:
Exit as soon as RSI touches 70 (at close of 4h bar)
Close all pending orders
Repeat
Money Management:
Use 1 lot per $50,000.00
1 mini lot per $5,000.00
1 micro lot per $500.00
Compound by increasing 1 micro lot every $500.00 closed profit.
Warning: this system suffered a 50% drawdown with the end of February 2007 unwind (but subsequently closed out with a large profit). If you wish to have less drawdown percentage simply increase your starting capital, and/or set your buy stop orders 300-400 below market entry instead of 250.
The following is a complete profitable system that you can use at your discretion. It is very simple, includes charts and indicator, entry, exit, and money management, and it makes thousands of pips per year (over 200% per year with positive swaps and compounding). It also survived the 1600 pip loss of GBP/JPY starting on 2/22/07 just fine (though not without large drawdown). This system aims to take some profit out of the middle, not guess highs and lows, and it takes advantage of the huge swap rate on the GBP/JPY.
I am sure that there will be the usual “if you just added a ziz zag pipsical oscillating MACD you could improve your pips by 1000%” but my point in using only one indicator is to keep it as simple as possible so that anyone can use this and make money doing so.
GBP/JPY is a carry trade, and as such its directional movement is assumed to be up, though it suffers large corrections for several weeks at a time. So because this pair moves up as its bias, we will trade it long only. This system is also easily backtestable.
Charts and Indicator:
GBP/JPY 4H
Only RSI (14 period)
Rules:
Entry:
Enter long with 1 lot (see money management below) whenever RSI touches 30 from above or goes below (at close of 4h bar).
Trade Management:
Upon entering long, place a buy stop order 250 pips below entry, another buy stop order 500 pips below entry, another at 750 below, another at 1000, another at 1250 and the final one at 1500.
Exit:
Exit as soon as RSI touches 70 (at close of 4h bar)
Close all pending orders
Repeat
Money Management:
Use 1 lot per $50,000.00
1 mini lot per $5,000.00
1 micro lot per $500.00
Compound by increasing 1 micro lot every $500.00 closed profit.
Warning: this system suffered a 50% drawdown with the end of February 2007 unwind (but subsequently closed out with a large profit). If you wish to have less drawdown percentage simply increase your starting capital, and/or set your buy stop orders 300-400 below market entry instead of 250.
