This is a strategy i'm working on since a week or two.
I dont know if it's perfect or not or needs improvement but it seems to hold a lot of promise. You'll tell me.
Edit : after 2 weeks of demo trading, i can say that it's a winner
, i'll continue demoing for 2 more weeks and go live with it.
OBJECTIVE
The idea with this strategy is to pick the first retracement of a trend usually to the pip.
THE SETUP
First you need to set your fibs to the following levels
-1, -.618, -.382, 0, .382, .5, .618, 1, 1.382, 1.618, 2
Label them respectively : T3, T2, T1, Low, Short, Pivot, Long, High, T1, T2, T3.
Add to your chart Momentum set to 14 (it's the default) and put a level of 100.
TIME FRAME
Any... but with fast TF <H1 you will have to watch the chart allmost full time. I started with M15 but i could not follow the trade. H1 is ok if you can watch from time to time your PC and it works OK on Daily. Note that several identical trades can show up on different TF.
THE RULES
This is where is it very simple. We will assume we are in a long trade, just reverse the rules if you are in a short trade.
When momentum is above 100 you are looking for a long setup. All you have to do is look for a clear uptrend. Only experience will give you an apreciation of a "clear" uptrend. It can be a break of a resistance, a reversal pattern, an candle action price pattern, bollinger expansion etc... I personnaly prefer a clear break of a resistance.
Next step is to draw your fibs fror the last recent high and the start of the up move (usually a resistance is a good start or last swing low)
Final step is to set your order. Put a pending long order on the long fib (.618) + spread , a SL a few pips (depending on your TF) below the short fib (.382) and a TP on either T1, T2 or T3.
If the trade is not triggered and the price makes new high, redraw your fib to adapt to the change (just change the high of the fibs, do not touch the low until a new swing low appears) and adapt your pending order accordingly or make a new pending order if necessary (normaly because the SL would increase your risk/trade)
Remove your trade if the momentum starts to go below 100.
T1 is hit allmost all the time. T2 is hit often. T3 is hit sometimes. Need to do some statistics here )
SAFER ENTRY
Wait for the price to retrace to the long/short zone and only once it has retraced to the zone put your pending order.
FOLLOWING THE TRADE
You can use an EA to manage your trade when you cannot watch it. Swiss Army Knife (attached but dont ask for the source, i dont have it) is very good for that.
What you want to do is set your SL to BE (+1 eventually if you are greedy ) as soon as you are positive to the same amount of pips you have risked. Then move your SL a few pips below the previous fib as the price progress. For instance, if price has reached T2 and you are aiming for T3, your SL should be a few pips below T1.
RISK MANAGMENT
Up to you, the bigger the risk, the bigger the reward but the faster your account will sink if you have several losses in a row. I would advise each trade to be maximum 2% of your account (hence 5 lost trades in a row would round -9.7% of your total equity )
This strategy has a very high return/risk ratio. T1, T2 and T3 gives respectively 3/1, 4/1 and allmost 6/1.
Et voilą... That's all. No need for further rule or hocus pocus mumbo jumbo indicators.
You can even get rid of momentum if you have a good eye of the trends ending with an indicator free chart.
I dont know if it's perfect or not or needs improvement but it seems to hold a lot of promise. You'll tell me.
Edit : after 2 weeks of demo trading, i can say that it's a winner
, i'll continue demoing for 2 more weeks and go live with it.OBJECTIVE
The idea with this strategy is to pick the first retracement of a trend usually to the pip.
THE SETUP
First you need to set your fibs to the following levels
-1, -.618, -.382, 0, .382, .5, .618, 1, 1.382, 1.618, 2
Label them respectively : T3, T2, T1, Low, Short, Pivot, Long, High, T1, T2, T3.
Add to your chart Momentum set to 14 (it's the default) and put a level of 100.
TIME FRAME
Any... but with fast TF <H1 you will have to watch the chart allmost full time. I started with M15 but i could not follow the trade. H1 is ok if you can watch from time to time your PC and it works OK on Daily. Note that several identical trades can show up on different TF.
THE RULES
This is where is it very simple. We will assume we are in a long trade, just reverse the rules if you are in a short trade.
When momentum is above 100 you are looking for a long setup. All you have to do is look for a clear uptrend. Only experience will give you an apreciation of a "clear" uptrend. It can be a break of a resistance, a reversal pattern, an candle action price pattern, bollinger expansion etc... I personnaly prefer a clear break of a resistance.
Next step is to draw your fibs fror the last recent high and the start of the up move (usually a resistance is a good start or last swing low)
Final step is to set your order. Put a pending long order on the long fib (.618) + spread , a SL a few pips (depending on your TF) below the short fib (.382) and a TP on either T1, T2 or T3.
If the trade is not triggered and the price makes new high, redraw your fib to adapt to the change (just change the high of the fibs, do not touch the low until a new swing low appears) and adapt your pending order accordingly or make a new pending order if necessary (normaly because the SL would increase your risk/trade)
Remove your trade if the momentum starts to go below 100.
T1 is hit allmost all the time. T2 is hit often. T3 is hit sometimes. Need to do some statistics here )
SAFER ENTRY
Wait for the price to retrace to the long/short zone and only once it has retraced to the zone put your pending order.
FOLLOWING THE TRADE
You can use an EA to manage your trade when you cannot watch it. Swiss Army Knife (attached but dont ask for the source, i dont have it) is very good for that.
What you want to do is set your SL to BE (+1 eventually if you are greedy ) as soon as you are positive to the same amount of pips you have risked. Then move your SL a few pips below the previous fib as the price progress. For instance, if price has reached T2 and you are aiming for T3, your SL should be a few pips below T1.
RISK MANAGMENT
Up to you, the bigger the risk, the bigger the reward but the faster your account will sink if you have several losses in a row. I would advise each trade to be maximum 2% of your account (hence 5 lost trades in a row would round -9.7% of your total equity )
This strategy has a very high return/risk ratio. T1, T2 and T3 gives respectively 3/1, 4/1 and allmost 6/1.
Et voilą... That's all. No need for further rule or hocus pocus mumbo jumbo indicators.
You can even get rid of momentum if you have a good eye of the trends ending with an indicator free chart.
The trade is not valid because first it was late friday and there was no clear uptrend (no break of resistance)
