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Daily Open-SR Technique

  • #1
  • First Post: Edited Aug 13, 2009 3:18am Feb 16, 2007 8:55pm | Edited Aug 13, 2009 3:18am
[post removed]
  • #2
  • Feb 16, 2007 9:36pm Feb 16, 2007 9:36pm
If stopped out do you re-enter? If so, how many times?
  • #3
  • Feb 16, 2007 10:42pm Feb 16, 2007 10:42pm
Hi there, good question.

Re-entry can be explored. However for myself, so far I don't re-enter because my rationale is that there will be more winning than losing trades in the long run. So consider a risk:reward of 1:1, you do the math. If it is a losing trade, I will wait for the next day to enter my orders again.
  • #4
  • Feb 17, 2007 12:26am Feb 17, 2007 12:26am
very similar to SRDC Episode I
  • #5
  • Feb 17, 2007 12:36am Feb 17, 2007 12:36am
Quoting amenlo9
very similar to SRDC Episode I
The difference of the DOSR is the daily support and resistance will change according to the closing price of yesterday, not the high and the low. This adjusted Open-SR will act as a better entry point than the high and low.
  • #6
  • Feb 17, 2007 12:44am Feb 17, 2007 12:44am
Quoting FXOperator
The difference of the DOSR is the daily support and resistance will change according to the closing price of yesterday, not the high and the low. This adjusted Open-SR will act as a better entry point than the high and low.
so any suggestion for TP and SL ?

**Sorry,i just found it inside your PDF.thanks for sharing, will go to backtest it**
  • #7
  • Feb 17, 2007 12:47am Feb 17, 2007 12:47am
Quoting amenlo9
so any suggestion for TP and SL ?
Hey thanks I forgot to put in my pdf. Will update it accordingly.

My suggested pairs are EUR/USD, GBP/USD and GBP/JPY.

EUR/USD - TP and SL set at around 20 pips.

GBP/USD - 30 pips.

GBP/JPY - 50 pips.

You guys can adjust to your comfort level, so far the TP and SL I'm using is good.
  • #8
  • Feb 17, 2007 12:58am Feb 17, 2007 12:58am
Quoting FXOperator
Hey thanks I forgot to put in my pdf. Will update it accordingly.

My suggested pairs are EUR/USD, GBP/USD and GBP/JPY.

EUR/USD - TP and SL set at around 20 pips.

GBP/USD - 30 pips.

GBP/JPY - 50 pips.

You guys can adjust to your comfort level, so far the TP and SL I'm using is good.
i don't quite understand your buy and sell entry explanation.do you mind to provide some example with chart here?

our entry is base or 5M chart?
  • #9
  • Edited 1:17am Feb 17, 2007 1:15am | Edited 1:17am
This technique can be customized to both part-time and full-time traders.

In case if you are trading part-time just like me, you could set two orders (buy and sell) after the completion of the latest daily candle and set according when the DOSR indicator changes.

But if you can access to the charts during the European and US opening session, you should switch to 5-min and look at the completion of the 5-min bar for confirmation of entry.

Both styles worked, however, by switching over to 5-min bar for confirmation, the returns are much higher.

Come Monday, do a testing on it and see how it goes. I'm trading live since last year December and the returns were good, my trades comprised of preset buy and sell orders, and manual trading by switching to the 5-min bar for entry and exit confirmation. I don't have time to switch over to the 5-min candle because at times I'm not at my desk so I preset my buy/sell orders with the recommended SL/TP targets, if not, it would be even better.

If someone can make an EA out of this, it would be an icing on the cake.
  • #10
  • Feb 17, 2007 1:19am Feb 17, 2007 1:19am
Quoting FXOperator
Somehow my deep desire to share with traders around the world overcame all possible public negative comments and also prompted me to come here, one of the best forex forums in the world. I believe there are many profitable systems out there, however, it still boils down to our determination and discipline to follow a mechanical system. Here is one of the strategies that I am using now, which is called The Daily Open Support and Resistance Technique, or DOSR in short. This discretionary trading method is very simple and does not rely on any indicators but only the formation of candlestick, which is also the price action.

Attached is a brief description on how this DOSR works.

Feel free to share your comments. Thank you.
Thanks for sharing the system, though I'm not exactly sure what you mean by that in the pdf file:

Buy Order

Enter the trade when the 5-minute bar penetrates and close higher than the buy order.

Sell Order

Enter the trade when the 5-minute bar penetrates and close lower than the short order.

Shouldn't it read "Resistance level" instead of "buy order" and "Support level" instead "short order"

Thanks,
Greg
  • #11
  • Feb 17, 2007 1:25am Feb 17, 2007 1:25am
Quoting GregFF

Buy Order

Enter the trade when the 5-minute bar penetrates and close higher than the buy order.

Sell Order

Enter the trade when the 5-minute bar penetrates and close lower than the short order.

Shouldn't it read "Resistance level" instead of "buy order" and "Support level" instead "short order"

Thanks,
Greg

Thanks for highlighting the errors. You are right. However, since I've just joined this forum, so I guess you guys should do a testing before trading live. By looking back at past candles, you can roughly know that it worked. Maybe I shouldn't post it during the weekends, because we don't have market to trade! ha.
  • #12
  • Feb 17, 2007 3:50am Feb 17, 2007 3:50am
Thanks for posting the method.

My broker's daily candles open at 4am GMT. Yesterday the GBP/USD entry would have been 1.9500 at the 8:05 GMT open - neither the profit target or stoploss was triggered during the UK/US sessions. When would you exit trades in this instance?
  • #13
  • Feb 17, 2007 4:30am Feb 17, 2007 4:30am
Quoting ChowClown
Thanks for posting the method.

My broker's daily candles open at 4am GMT. Yesterday the GBP/USD entry would have been 1.9500 at the 8:05 GMT open - neither the profit target or stoploss was triggered during the UK/US sessions. When would you exit trades in this instance?
That's a good question on how to exit the trade if the triggered position is not close on SL or TP at the end of the day.

In my case, I would let the position TP and SL targets handle by itself on the next day price action. If stop out then let it be.

My rationale on this method is that there will be more winning trades than the losing ones (so far it is), which is why I don't change my TP and SL target. Most of the time, I trade on preset buy and sell orders, so I just fire and "forget". At the end of each day, I will take note of the opened positions and the pips lost/made that day.

However, I would suggest that for those who are interested, try to add some variation to the TP and SL strategies, probably you will have a better idea then.

My orders are set at GMT 0000H.
  • #14
  • Feb 17, 2007 4:56am Feb 17, 2007 4:56am
how many trade u enter per day?the price might break and retrace a few times per day, will you entry at the second penetration?
  • #15
  • Feb 17, 2007 7:28am Feb 17, 2007 7:28am
Quoting amenlo9
how many trade u enter per day?the price might break and retrace a few times per day, will you entry at the second penetration?
I've noticed that when it breaks, it breaks hard. Although it will retrace, however, a SL designated for each pairs such as 30 pips for GBP/USD is sufficient enough to prevent being stopped out.

I don't re-enter any stopped out position. It does come back at times, but if it doesn't, you will have two losing trades on a single day on that particular currency pair, then you will have to win back two trades to breakeven on the money management for that pair. That would be damaging for the money management.

But if you were to accept the single trade loss and move on to the next day, you will have higher chance to recoup it back. Why? Because the momentum will be different and to repeat the process of having to hit the high or the low and to retrace back as far as 50 pips (GBP/JPY) or 30 pips for GBP/USD, then it would need to have an identical momentum flow of the previous day, and I would doubt that pattern to occur that frequently.

But let's say if you did not lose but already take profit on your first trade, then you have the liberty to decide whether or not to enter again on the same day since you did not lose.

Since this will involve money management, let me explain a simple risk management for this method. If your initial capital is 2,000 USD and you are trading 1$ per pip, then your % risk per trade should be about 3-5%. I'm using a 5% management; that breaks down to a maximum 100 pips lose on a single day for a 2,000 USD initial capital. Which is also why SL of 20 pips for EUR/USD, 30 pips for GBP/USD and 50 pips for GBP/JPY (total 100 pips) is just nice for this technique. If you wish, you can actually use that 5% risk on a single pair, and you will have more freedom to adjust to suit your trading style.

Bottom line: protect your capital.

*forgive my bad english. I just type on as I write on.
  • #16
  • Feb 17, 2007 8:20am Feb 17, 2007 8:20am
i like the simplicity of this method. i'm not familiar with SRDC1 since i'm fairly new to the forex factory forums. i like having the option of setting it up before bed and a better way should i be awake for the session. one could set alerts to wake up when price is at the entry price for you to do it manually based on the 5 min but i like to sleep.

thanks again for posting this method
  • #17
  • Feb 17, 2007 8:46am Feb 17, 2007 8:46am
I understand that there is no re-enter if stopped out. If the losing trade was a long, will you enter a short that same day if triggered? Also, could you post the results you have so far? Thanks!
  • #18
  • Feb 17, 2007 9:10am Feb 17, 2007 9:10am
Quoting drayco
I understand that there is no re-enter if stopped out. If the losing trade was a long, will you enter a short that same day if triggered? Also, could you post the results you have so far? Thanks!
Yes I would still enter the opposite order if one is stopped out.

I did paper trading before going live, so I don't have any results to show. Even if I did on a demo, I would probably delete it away by now cos I don't have a habit to keep demo statements for too long. My live results would preferred to be kept in private.

One thing I've realized, doing forward testing by ourselves would be better, because we are immersed with the market and we will gain confidence from it when we see real time results.
  • #19
  • Feb 19, 2007 6:23am Feb 19, 2007 6:23am
today your sell orders were hit, how do you handle opening of candlestick with gaps?
  • #20
  • Edited 6:25pm Feb 19, 2007 2:14pm | Edited 6:25pm
Quoting FXOperator
Somehow my deep desire to share with traders around the world overcame all possible public negative comments and also prompted me to come here, one of the best forex forums in the world. I believe there are many profitable systems out there, however, it still boils down to our determination and discipline to follow a mechanical system. Here is one of the strategies that I am using now, which is called The Daily Open Support and Resistance Technique, or DOSR in short. This discretionary trading method is very simple and does not rely on any indicators but only the formation of candlestick, which is also the price action.

Attached is a brief description on how this DOSR works.

Feel free to share your comments. Thank you.
Hello, FXoperator,
This is about the indicator you have posted. Thank you.
1. What purpose does the yellow line (open of today) serve here?
2. What do you do if the market opens above the resistance or below the support?
3. If I bring up the 5-minute chart and apply the indicator, then do those red and blue lines indicate resistance and support based on the daily chart?
Thanks.
-Chan
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