Traffic Light System

It's taken me a while to get the nerve to present this method for my fear of ridicue. But nothing ventured, nothing gained. So I formally present the "Traffic Light" daily trending system (or method). I've been trading this method now since the beginning of December with much success. Admittingly I have over-traded, traded with no SL or TP, and not use any sensible money mangement, yet I have made a little over $7400 in profit, starting with $300 (I have attached a spreadsheet with all my trades).

Since I have a non-trading job ( I hope to change that one day), and don't have access to my trades during the day, I've been trying to find/develop a method that would allow me to just trade at night. After a year and half of blowing three live accounts, a ForexFactoryFriend (FFF) suggested a scalping system, which I immediately put it on the daily charts. I fooled around, added/subtracted indicators, consulted with my FFF (on a daily basis), finally coming up with what I think is a pretty good method of trading - well it works for me! So let me thank everyone on FF for all their system, methods, ideas, indicators, etc. It's because of all I've read here, and some great help from a friend (you know who you are) that I offer this method for your consideration.

T.F - Daily (that's all I use)
Platform - MT4 (build 220)
Broker - IBFX (not that this method is broker specific, they are just who I use)
Pairs - ALL (whatever you are comfortable with)

Indicators:
HMA Modified
RSI Custom
Goldminer 2
(i will attach indicators and template in subsequent posting)

These are all indicators that visually show the trend, and thats is what this method is all about. I can't really talk about what makes these indicators do what they do, all I can say is together they visually tell you which way the trend is going and when to get in (pretty early in most cases) and when to get out.

For Sell Trades:
The HMA Modified must be Red, Goldminer2 must be Red, and RSI Modified must be Red or Yellow.

For Buy Trades:
The HMA Modified must be Green, Goldminer2 must be Green, and RSI Modified must be Green or Yellow.

Exits:
You exit when either the HMA Modified line changes colors or Goldminer2 changes to the opposite color of the HMA Modified Line.

That's it, pretty simple!

I have attached a chart that demonstrates how to get in and out of trades. Now I'm sure there will be those that say that my indicators re-paint so this method is useless. I have not found this to be an issue. I usually take trades Sunday night (giving the new daily bar time to settle in). Around Wednesday morning I try to take some profits and be out Wednesday night/Thursday morning. It seems that the market tends to take back towards the end of the week - I'm still researching this.

Ok now it's your turn, what do you think.

sounds good haw about alittle more info
would like to see what it is about
unable to trade all the time either

More Info Please

Thanks !

OK Mitch you've got my interest peaked. I would be very keen to participate...

are you going to post indicators and template?

Hey mitch, it looks pretty solid. I too, have found the best way to be profitable is trading the longer TF's. I would like to take this set up for a ride and see how it does for me...

You guys are too fast for me. Here is the template and indicators.

According to your system, I see 9 trades in that picture.

Any particular reason they weren't pointed out? Or am I getting the system wrong?

I just pointed out a few to illustrate how to trade this method. You can see how easy it is to spot the trades.

Nice to see you here, this was the method I was asking you about programming an EA.

Mitch

All,

I just noticed that Paulus has a system call Traffic Lights. Any suggestions for a new name would be appreciated.

Thanks
Mitch

This looks pretty nice. I am primarily an end of day trader as well. Thanks for the info. How are you calculating your s/l?

Damonl,

I have tried many scalping systems and they are just not for me - never made any money with them. I currently have a full-time job that doesn't allow me the opportunity to check on trades during the day. I have been search for a good daily systems that didn't require you to make your trades exactly on the new day bar. The key is to find the best time, for your broker, to make your trades to maximize your profits.

Stop Loss, this is where I'm going to get clobbered. I don't use any, or at least not yet. My trade decisions are based upon that I am very confident that I am trading in the correct direction of the immediate trade.

Mitch

So then, how did you determine it was time to close the trades that you took for losses on your .xls file. Was it the end of the day type of decison?

Looks pretty good on a 15M TF with just a LAG added.

Mitch,

Thanks for sharing the system. Like you, I work full time, which means scalping isn't really an option for me either. The longer I am in this "game", the more convinced I am that the big money is made in the higher time frames, anyway. Plus, it's usually a lot less stressful!

I will be eager to try out your method on a demo account and see how it does.

You mentioned the method was viable for ALL pairs. Which pairs have you tested this on to date?

Scott

Damonl,

What I've been trying to figure out is when to take profit (without letting greed take over). I ususally make my trades Sunday Night and things usually go well till Wednesday. When I let things ride into Thursday or Friday I usually end up giving back some $$ (still quite profitable I must say). So lately I have been taken back some profit before Wednesday (cutting my trades in half) and then letting everything ride till Wednesday night. Depending upon my profits for the week, I either cut my trades in half again or let them ride one more night. Not really a sound process but I'm still experimenting and hope the real traders out on Forex Factory can help steer me straight

Mitch, I'm a little confused by your reference to making trades on Sunday night. Are you only placing new trades only on Sunday night (and then only if all the signals line up)? Do you not initiate trades at other points during the week even if the signals suggest you should?

Scott

Sorry for the confusion, I start trading Sunday Night and will usually have 6-10 trades going. I will run these trades throughout the week, cutting my loses when I think it's time and running with trades that are going in my favor. I will pick up occational trades during the week when the signal
initate trades during the week when the signal are right.

I still don't have all the rule down, that's why I put this system up on FF, too learn from all of you.

Mtich

No problem... sounds like a great group project. Let's see what we can come up with.

Scott

Can It Be Used On Lower Time Frames?