Long Term Forex Growth Strategy

Rules Updated 12/03/08

This thread is not about get rich quick, it is about long term sustained growth in a safe trading environment.

This is just something that I am putting out there for you all to take a look at. Let's take a look at the pros and cons.....

Pros

1. At a glance I believe that you will always end up a winner trading this system. Eventually the market will hit the t/p target of 200 pips.
2. Limited margin usage.
3. Long term growth, with minimal input and time needing to be invested
4. It is advisable to start with a very small amount of investment capital. Recommend $100-200 USD.

Cons

1. Could see a 30% drawdown or more per cycle
2. Low risk during most cycles
3. Needs to be traded with an EA because of the demand of making a trade every 15M
4. Not yet tested as no EA is available at this time.

Rules

1. Place Bill Williams Alligator on your chart (my back testing was for the 15M TF on GBPJPY)
2. Put the Jaws and the Lips to color none. We will only be using the Teeth of the alligator for this trade
3. Whenever the teeth closed in a lower value than the previous closed value, place a sellstop (SS) order 1 pip below the low of that bar.
4. Whenever the teeth closed with a higher value than the prevous closed value, place a buystop (BS) order 1 pip + spread above the high of that bar
5. Whenever the teeth closed = to the last close, place both a buystop and a sellstop order as per the rules above
6. Close all open trades when you have reached a value of 200 pips in profit combined from all open trades.
7. After you reach your profit target of 200 pips and you have closed all your open trades, start a new cycle at the close of the current bar, while leaving all your current pending orders in place that have not yet triggered. If a pending order has not triggered within 24 hours from when you opened it, it should be closed
8. If you have a day where you have more than 5 consecutive winning cycles in a row in the same day in the same 24 hour period, sit out the next 24 hours as you will more than likely experiece a range that will be too great to want to trade this system

Money Management

1. My thoughts were to use .01 mini lots for every $100 in account balance. There are times when you will have many trades open at one time, so you need to keep your risk per open trade as small as possible.

These entry positions are using IBFX starting at 23:30 GMT

BS - 147.16 (open) -149
BS - 147.19
BS - 146.99
BS - 146.86
BS - 146.55
BS - 146.32
BS - 146.10
SS - 145.95 (open) +28
SS - 145.86 (open) +19
SS - 145.82 (open) +15
SS - 145.87 (open) +20
SS - 145.42
SS - 145.45
SS - 145.65 (open) -2
SS - 145.81 (open) +14
SS - 145.81 (open) +14
SS - 145.80 (open) +13
SS - 145.86 (open) +19
SS - 145.92 (open) +25
SS - 145.96 (open) +29
SS - 145.80 (open) +13
SS - 145.83 (open) +16
SS - 145.81 (open) +14
SS - 145.78 (open) +11
SS - 145.74 (open) +7
SS - 145.95 (open) +28
SS - 145.89 (open) +22
SS - 145.89 (open) +22
SS - 145.79 (open) +12
SS - 145.93 (open) +26
SS - 145.72 (open) +5

I just used our exit point at 145.67 giving us a total of over 200 pips in profit for the day. At this point we can either close all open and pending orders and call it a day and start fresh tomorrow, just close all open positions and leave pending orders as they are and continue for more pips, or close all open and pending orders and start over with everything new starting right now. This will be something to keep an eye on, but for the sake of testing, I will close all open and pending orders and call it a day. The rest I will just do visually as we go along and give my thoughts.

I will be back tomorrow at 23:30 and keep track of another day.

Results after day 1 of testing

1 for 1 w/l ratio
+200 pips in profit

Let's say that we decided to keep all pending trades where they were and just close the open trades when we hit our 200 pip t/p.

After our 1st trade hit t/p, here is a list of pending trades still out there. Then I will add to them the next batch of orders

BS - 147.19
BS - 146.99
BS - 146.86
BS - 146.55
BS - 146.32
BS - 146.10 (open) -95
BS - 146.09 (open) -94
BS - 145.92 (open) -87
BS - 146.24
SS - 145.42 (open) +74
SS - 145.45 (open) +77
SS - 145.57 (open) +89
SS - 145.63 (open) +95
SS - 145.48 (open) +80
SS - 145.60 (open) +92
SS - 145.82 (open) +110
SS - 144.95 (open) +27
SS - 144.58

At this point our 2nd 200 pip t/p has been reached. Moving on to Trade 3

Pending trades still available plus I will add the next entries.

BS - 147.19
BS - 146.99
BS - 146.86
BS - 146.55
BS - 146.32
BS - 146.24
BS - 144.16
BS - 144.14
SS - 144.58 (open)
SS - 143.26 (open)
SS - 143.54 (open)
SS - 143.72 (open)
SS - 143.10

At this point we have reached another 200 pips in profit. I will now move the pending orders and add additional orders for trade 4

BS - 147.19
BS - 146.99
BS - 146.86
BS - 146.55
BS - 146.32
BS - 146.24
BS - 144.16
BS - 144.14
SS - 143.10 (open)
SS - 142.63 (open)
SS - 141.83
SS - 142.16 (open)

At this point we would have reached another 200 pips in profit. I will now move on to trade 5

BS - 147.19
BS - 146.99
BS - 146.86
BS - 146.55
BS - 146.32
BS - 146.24
BS - 144.16
BS - 144.14
SS - 141.83 (open)
SS - 141.71 (open)
SS - 140.96 (open)
SS - 140.31

At this point we would have reached another 200 pips in profit. I will now move on to trade 6

BS - 147.19
BS - 146.99
BS - 146.86
BS - 146.55
BS - 146.32
BS - 146.24
BS - 144.16
BS - 144.14
SS - 140.31
SS - 140.69
SS - 140.88 (open)
SS - 141.25 (open)
SS - 141.09 (open)
SS - 140.96 (open)
SS - 140.83

Tonight I will finish this up and then add the scenario where we canelled all pending trades each time we entered a new cycle...later

Damonl very interesting, you can display a graphic with instructions?

Please illustrate this system with a chart,
Also do you change the settings of the alligator?

Thanks

I have decided not to go into detail about the rest of the day, because I think the day was trending and any system can make money when the market is trending. How does it do when the market is ranging, that is the question.

Today, would have netted us without really looking close to 2000 pips using this system. That is almost 20% profit, with little to no risk I might add However, it is important to know that today is not like everyday. But, let's looks at the 2 things I want to accomoplish from a trading strategy.

1. Make a killing when the market is trending - Accomplished, and this system will do this every time the market trends.
2. Keep your profit when the market is ranging. This has yet to be seen, but rest assured, you might be surprised.

I will start today out new at 23:30 GMT as I worked all day and don't want to go back and do all this calculations from today. Rest assured you would have made big money....See you all at 23:30.

Please do you mean place a buy stop when candle closes above teeth etc? As currently stated above today would have been a losing day.

Okay, for those that want to follow along. I am assuming all pending orders from yesterday are closed and am starting from scratch.

At 23:15, the Teeth of the Alligator did not change from 23:00. therefor we place both a BS (buystop) and a SS (sell stop) above the high and the low of that bar. The SS already triggered.

At 23:30, the teeth of the alligator registered a lower value than that at 23:15, so we will place a SS only. That entry is listed below.

Here is tonights trading. In red, is the time the order was placed. In GMT time

BS - 138.75 (open) 23:30 +25
BS - 139.93 (open) 01:30 -93
BS - 139.94 (open) 01:45 -94
BS - 140.06 (open) 02:00 -106
BS - 140.07 (open) 02:15 -107
BS - 140.06 (open) 02:30 -106
BS - 140.03 (open) 02:45 -103
BS - 139.80 (open) 03:00 -80
BS - 139.88 (open) 03:15 -88
BS - 139.86 (open) 03:30 -86
BS - 139.73 (open) 03:45 -73
BS - 139.71 (open) 04:00 -71
BS - 139.41 (open) 04:15 -41
BS - 139.43 (open) 04:30 -43
BS - 139.56 (open) 04:45 -56
BS - 139.68 (open) 05:00 -68
BS - 138.71 (open) 06:00 -71
BS - 138.79 (open) 06:15 -79
BS - 138.76 (open) 06:30 -76
BS - 140.47 (open) 13:15 -147
BS - 140.77 (open) 13:30 -177
BS - 140.98 13:45
BS - 140.98 14:00
BS - 140.76 (open) 14:15 -176
BS - 140.88 (open) 14:30 -188
BS - 140.35 (open) 14:45 -135
BS - 140.89 (open) 15:00 -189
BS - 140.90 15:15
BS - 140.59 15:30
BS - 140.29 (open) 15:45 -129
BS - 139.93 (open) 16:00 -93
BS - 139.63 (open) 16:15 -63
BS - 139.62 (open) 16:30 -62
BS - 140.06 (open) 16:45 -106
BS - 140.12 (open) 17:00 -112
BS - 139.89 18:15
BS - 139.76 18:30
BS - 139.70 18:45
BS - 139.08 (open) 22:30 -8
BS - 139.08 (open) 22:45 -8
BS - 138.82 (open) 19:30 +18
SS - 138.40 (open) 23:30 +79
SS - 138.32 (open) 23:45 +71
SS - 138.27 (open) 00:00 +66
SS - 138.37 (open) 00:15 +76
SS - 138.97 (open) 00:30 +136
SS - 139.16 (open) 00:45 +255
SS - 139.28 (open) 01:00 +167
SS - 139.42 (open) 01:15 +181
SS - 139.41 (open) 05:00 +180
SS - 139.23 (open) 05:15 +162
SS - 138.77 (open) 05:30 +116
SS - 138.31 (open) 05:45 +70
SS - 138.14 (open) 06:30 +53
SS - 138.41 (open) 06:45 +80
SS - 138.43 (open) 07:00 +82
SS - 138.50 (open) 07:15 +89
SS - 138.71 (open) 07:30 +110
SS - 138.63 (open) 07:45 +102
SS - 138.07 (open) 08:00 +46
SS - 137.07 08:15
SS - 137.09 08:30
SS - 137.22 08:45
SS - 137.27 09:00
SS - 137.78 (open) 09:15 +25
SS - 137.94 (open) 09:30 +41
SS - 137.80 (open) 09:45 +27
SS - 137.86 (open) 10:00 +33
SS - 137.92 (open) 10:15 +39
SS - 137.72 (open) 10:30 +19
SS - 137.66 (open) 10:45 +13
SS - 137.52 11:00
SS - 137.54 11:15
SS - 137.74 11:30
SS - 137.85 11:45
SS - 137.92 12:00
SS - 138.75 12:15
SS - 138.86 12:30
SS - 139.05 12:45
SS - 139.57 13:00
SS - 139.52 (open) 17:00
SS - 139.74 (open) 17:15
SS - 139.59 (open) 17:30
SS - 139.32 (open) 17:45
SS - 139.36 (open) 18:00
SS - 138.29 (open) 19:00
SS - 138.16 19:15
SS - 138.19 19:30
SS - 138.46 (open) 19:45
SS - 138.28 20:00
SS - 138.43 20:15
SS - 138.80 (open) 20:30
SS - 138.55 20:45
SS - 138.83 (open) 21:00
SS - 139.06 (open) 21:15
SS - 138.89 (open) 21:30
SS - 138.79 (open) 21:45
SS - 138.57 (open) 22:00
SS - 138.86 22:15
SS - 138.89 22:45
SS - 138.87 23:00
SS - 138.99 23:15


Okay...I am off to bed. I will try to get things caught up on the thread before I head off to work. Currently at 05:00 we are down just over 300 pips, or about 3% drawdown. We'll see where we will be at when I awake. later.

My latest calculation was done use the low at 11:00 GMT for the calculations. I now need to get ready for work, but at that time we were down 340 pips with 26 long trades open and 12 long trades open. This means that we are using 7% or our margin at the moment in open trades with just over a 3% drawdown. I don't have time to do anymore at the moment, ans so will have to pick back up when I get home.

The next calculation is done at 23:15 GMT at the price of 139.00

This is a list of questions that I am still not sure of the answer and might not be sure until I run across a ranging market.

1. After we reach our initial 200 t/p, do we call it a day and end the trading. To me, in a trending market, no, but we will have to see how this handles a ranging market.
2. After we reach a t/p target, do we continue a new cycle there and keep all pending orders as they are. Still, I think the ranging market will tell. However, I think that all pending orders should be removed after 24 hours if this is choosen
3. After we reach a t/p target do we also cancel any pending orders and start over with a new cycle immediately. In a trending market no, but a ranging market will tell us the truth.
4. When the teeth give us "no movement" from the previous bar, what trades should we enter? Currently I am entering a long and a short pending order when this happens. Maybe it would be better to enter no trade in either direction. Time will tell.

Please keep this in mind as you follow along......Thanks

Please also remember that on a ranging day, you could have many open trades in both directions. No more than .01 mini lots per $100 of equity. This is a growth fund, safe and sure....I think.

Please also do not trade this live under any circumstances without an EA. It requires you to make a pending trade order either long or short every 15 minutes of every hour. Missing too many trades in a row could be a major set back.

@ Damonl;

Please explain Rule# 4 a little better if you could. My understanding is if the teeth is between the the High and Low of the candle open both a BuySyop and SellStop?

TimeFreedom

Hey TF.

If the teeth has the same value at the close of the current bar as it did at the close of the last bar, then you would open up up both a BS and a SS. If the teeth has direction, the trade would only be opened up in the direction of the teeth.

I still don't know for sure if this is the best way to handle it as it is still being tested, but i have to do something, so I thought I'd try this.

I hope that you have been well.

Okay, for those that want to follow along. I am assuming all pending orders from yesterday are closed and am starting from scratch.

At 23:15, the Teeth of the Alligator did not change from 23:00. therefor we place both a BS (buystop) and a SS (sell stop) above the high and the low of that bar. The SS already triggered.

At 23:30, the teeth of the alligator registered a lower value than that at 23:15, so we will place a SS only. That entry is listed below.

Here is tonights trading. In red, is the time the order was placed. In GMT time

BS - 138.75 (open) 23:30 -243
BS - 139.93 (open) 01:30 -361
BS - 139.94 (open) 01:45 -362
BS - 140.06 (open) 02:00 -374
BS - 140.07 (open) 02:15 -375
BS - 140.06 (open) 02:30 -374
BS - 140.03 (open) 02:45 -371
BS - 139.80 (open) 03:00 -348
BS - 139.88 (open) 03:15 -365
BS - 139.86 (open) 03:30 -354
BS - 139.73 (open) 03:45 -341
BS - 139.71 (open) 04:00 -339
BS - 139.41 (open) 04:15 -309
BS - 139.43 (open) 04:30 -311
BS - 139.56 (open) 04:45 -324
BS - 139.68 (open) 05:00 -336
BS - 138.71 (open) 06:00 -339
BS - 138.79 (open) 06:15 -347
BS - 138.76 (open) 06:30 -344
BS - 140.47 (open) 13:15 -415
BS - 140.77 (open) 13:30 -445
BS - 140.98 13:45
BS - 140.98 14:00
BS - 140.76 (open) 14:15 -444
BS - 140.88 (open) 14:30 -456
BS - 140.35 (open) 14:45 -403
BS - 140.89 (open) 15:00 -457
BS - 140.90 15:15
BS - 140.59 15:30
BS - 140.29 (open) 15:45 -397
BS - 139.93 (open) 16:00 -361
BS - 139.63 (open) 16:15 -331
BS - 139.62 (open) 16:30 -330
BS - 140.06 (open) 16:45 -374
BS - 140.12 (open) 17:00 -380
BS - 139.89 18:15
BS - 139.76 (open) 18:30 -344
BS - 139.70 (open) 18:45 -338
BS - 139.08 (open) 22:30 -276
BS - 139.08 (open) 22:45 -276
BS - 138.82 (open) 19:30 -250
BS - 138.96 (open) 23:45 -264
BS - 138.73 (open) 00:15 -241
BS - 138.69 (open) 00:30 -237
BS - 139.65 (open) 03:00 -233
BS - 139.41 (open) 03:15 -209
BS - 139.84 03:30
BS - 139.51 03:45
BS - 139.49 04:00
BS - 139.33 04:15
BS - 139.16 04:30
BS - 138.85 (open) 04:45 -253
BS - 138.72 (open) 05:00 -240
BS - 138.81 (open) 05:15 -249
BS - 138.79 (open) 05:30 -247
BS - 138.98 (open) 07:15 -266
BS - 138.33 (open) 07:30 -201
SS - 138.40 (open) 23:30 -19
SS - 138.32 (open) 23:45 -27
SS - 138.27 (open) 00:00 -32
SS - 138.37 (open) 00:15 -22
SS - 138.97 (open) 00:30 +38
SS - 139.16 (open) 00:45 +57
SS - 139.28 (open) 01:00 +69
SS - 139.42 (open) 01:15 +83
SS - 139.41 (open) 05:00 +82
SS - 139.23 (open) 05:15 +64
SS - 138.77 (open) 05:30 +18
SS - 138.31 (open) 05:45 -28
SS - 138.14 (open) 06:30 -45
SS - 138.41 (open) 06:45 -18
SS - 138.43 (open) 07:00 -8
SS - 138.50 (open) 07:15 -9
SS - 138.71 (open) 07:30 +12
SS - 138.63 (open) 07:45 +4
SS - 138.07 (open) 08:00 -52
SS - 137.07 08:15
SS - 137.09 08:30
SS - 137.22 08:45
SS - 137.27 09:00
SS - 137.78 (open) 09:15 -81
SS - 137.94 (open) 09:30 -65
SS - 137.80 (open) 09:45 -79
SS - 137.86 (open) 10:00 -73
SS - 137.92 (open) 10:15 -67
SS - 137.72 (open) 10:30 -87
SS - 137.66 (open) 10:45 -93
SS - 137.52 (open) 11:00
SS - 137.54 (open) 11:15
SS - 137.74 (open) 11:30
SS - 137.85 (open) 11:45
SS - 137.92 (open) 12:00
SS - 138.75 (open) 12:15 +16
SS - 138.86 (open) 12:30 +27
SS - 139.05 (open) 12:45 +46
SS - 139.57 (open) 13:00 +98
SS - 139.52 (open) 17:00 +93
SS - 139.74 (open) 17:15 +115
SS - 139.59 (open) 17:30 +100
SS - 139.32 (open) 17:45 +73
SS - 139.36 (open) 18:00 +77
SS - 138.29 (open) 19:00 +70
SS - 138.16 (open) 19:15
SS - 138.19 (open) 19:30
SS - 138.46 (open) 19:45 -15
SS - 138.28 (open) 20:00 -31
SS - 138.43 (open) 20:15 -16
SS - 138.80 (open) 20:30 +21
SS - 138.55 (open) 20:45 -4
SS - 138.83 (open) 21:00 +24
SS - 139.06 (open) 21:15 +47
SS - 138.89 (open) 21:30 +30
SS - 138.79 (open) 21:45 +20
SS - 138.57 (open) 22:00 -4
SS - 138.86 (open) 22:15 +27
SS - 138.89 (open) 22:45 +30
SS - 138.87 (open) 23:00 +28
SS - 138.99 (open) 23:15 +40
SS - 138.71 (open) 23:30 +12
SS - 138.61 (open) 23:45 +2
SS - 138.30 (open) 00:00 -29
SS - 138.15 (open) 00:45
SS - 138.18 (open) 01:00
SS - 138.18 (open) 01:15
SS - 138.28 (open) 01:30
SS - 138.65 (open) 01:45 +6
SS - 138.75 (open) 02:00 +16
SS - 138.90 (open) 02:15 +31
SS - 138.93 (open) 02:30 +34
SS - 139.21 (open) 02:45 +62
SS - 138.69 (open) 05:45
SS - 138.80 (open) 06:00
SS - 138.75 (open) 06:15
SS - 138.46 (open) 06:30
SS - 138.32 (open) 06:45
SS - 138.51 (open) 07:00
SS - 138.49 (open) 07:15
SS - 139.35 (open) 07:45
SS - 138.72 (open) 08:00
SS - 137.92 (open) 08:15
SS - 137.17 (open) 08:30

Most recent calculation was done at 09:00 GMT at price 136.32

I am off to bed so I will catch back up again when i can.

We seemed to have gone to extremes. 1 day super good, the next day super range.

In the month that I backtested this, I never saw a day like today. The range here has been very large and that has worked against us in this case causing a little more drawdown than I would have liked to see. However we are far from a margin call and closer to our 200 pip t/p.

Today will be a telling day as we have a doji bar on D1 chart which signals we should see some move move today...with upward suggestion.

As we did not hit our t/p for today, I will continue to monitor the trading in the post above.

http://i34.tinypic.com/3507ati.png

Hello RaR,

Yes, i believe that you have your chart set-up correctly and it looks like your trades are in the right spot. You can check your entries with my current entries post.

Also...please don't trade live unitl you have tested this out. Today with such a larger range, drawdown has been more than ecptected. Already it is starting to tighten and a break will get us to our t/p.

also, I believe that you are using too much margin for your account size...in fact, i know so

Thanks for your reply,

I was shocked my self when i saw it... maybe i missed type my demo deposit.. my fault.

Btw, right now i deliberately didn't set a couple orders (BS & SS) on the same closed price... i'd like to test it that way,.. is that ok?

Thanks,
RaR

1. At a glance I believe that you will always end up a winner trading this system. Eventually the market will hit the t/p target of 200 pips.

http://i37.tinypic.com/1zmgjn9.png

Rules

1. Whenever the teeth closed in a lower value than the previous closed value, place a sellstop (SS) order 1 pip below the low of that bar.
2. Whenever the teeth closed with a higher value than the prevous closed value, place a buystop (BS) order 1 pip + spread above the high of that bar

Kind to explain why only BS order that should be placed with more adding like spreads, while the SS order's shouldn't?... The spreads on my broker for GJ is 7, so i have to add +8 for my BS, while the SS just adding 1 from the low.

Thx,
RaR

Oops... some trades with other pairs... just curiosity..)

http://i38.tinypic.com/28049d2.png

the total for today (half day trades)... nice wind, nice waves!

http://i38.tinypic.com/2mi5kz7.png
Great system ......

Damon, u !!

Btw,.. definitely needs an EA for this!