This is my first post at Forex Factory. I have benefited greatly from reading the forums here, and though I am new to Forex trading, I would like to submit a strategy which I am currently testing and which I believe has excellent potential. The detailed explanation is in the attached PDF, but I'll provide an overview of the concept and the basic trading rules here:
THEORY:
It is seldom that the OPEN price is also the HIGH or LOW of the day with price action only in one direction. In fact, this occurs only 1% or less of the time. Usually, there is a "shadow" or tail from the OPEN to the HIGH or LOW of the day, meaning that there is almost always action on both sides of the OPEN price. This system takes advantage of this fact and the small shadow that exists between the OPEN price and the HIGH or LOW of the day. This system attempts to capitalize on this by capturing a fixed amount of that movement every day. This is a low-risk, high-probability, mechanical system without regard for trends, indicators, interest calculations, and so on. The only things that matter in this system are daily price action and probabilities.
The system as I am using it involves two pairs with relatively high volatility and low correlation (GBPJPY and USDCHF), though other pairs could be substituted.
RULES:
1. Enter at the OPEN (long USDCHF / short GBPJPY)
2. Set ProfitTarget (PT) at +30/+40 pips
3. Set Stop-And-Reverse (SAR) at -30/-40 pips
4. Set SAR catastrophic StopLoss at -200 pips
5. If SAR hits, exit at CLOSE
6. If neither PT nor SAR hits, exit at CLOSE
EXPECTATION:
The expected return with this system is approximately 400 pips per month. I am currently trading at Oanda and my return since 6/12 is 589 pips.
I welcome your comments, criticisms, and improvements!
All the best!
THEORY:
It is seldom that the OPEN price is also the HIGH or LOW of the day with price action only in one direction. In fact, this occurs only 1% or less of the time. Usually, there is a "shadow" or tail from the OPEN to the HIGH or LOW of the day, meaning that there is almost always action on both sides of the OPEN price. This system takes advantage of this fact and the small shadow that exists between the OPEN price and the HIGH or LOW of the day. This system attempts to capitalize on this by capturing a fixed amount of that movement every day. This is a low-risk, high-probability, mechanical system without regard for trends, indicators, interest calculations, and so on. The only things that matter in this system are daily price action and probabilities.
The system as I am using it involves two pairs with relatively high volatility and low correlation (GBPJPY and USDCHF), though other pairs could be substituted.
RULES:
1. Enter at the OPEN (long USDCHF / short GBPJPY)
2. Set ProfitTarget (PT) at +30/+40 pips
3. Set Stop-And-Reverse (SAR) at -30/-40 pips
4. Set SAR catastrophic StopLoss at -200 pips
5. If SAR hits, exit at CLOSE
6. If neither PT nor SAR hits, exit at CLOSE
EXPECTATION:
The expected return with this system is approximately 400 pips per month. I am currently trading at Oanda and my return since 6/12 is 589 pips.
I welcome your comments, criticisms, and improvements!
All the best!
Attached File(s)
