My Virtual Forex Business

Hi,

This post will be for the Strategy, Indicators and any other useful info.

1. Current strategy - http://www.forexfactory.com/showpost...71&postcount=9

A bit about why I created this thread next ....
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Typing Google into Google destroys the Internet.

I have been demo trading now for about 6 months and it looks like I've fallen into the trap of having too many systems to choose from and too many indicators on my charts, at the last count I had 1059 to choose from - this is ridiculous

I've created this thread to try and give me some focus. Here is what I like to see.

I like trading trends.
I like the E/U because I live in Europe, has tight spread and it trends well.
I like divergences (CCI 55)
I like inside bars.
I trade the M1 as I can't afford to risk too much.
I like tight stops
I like to let my winners run.
I don't trade 15 mins before and after news.

What's tricky is spotting the trend, before it runs away and you have nowhere to place your stop (based upon your Money Management), keeping out of range bound situations and having the confidence in your strategy to let your winners run.

Money Management - Max 2% / trade. Therefore my mechanical entry point has to be no more than that.

Indicators I like - Heiken Ashi Kuskus (Period 40) (doesn't repaint), keeps me in the trend really nicely, but when range bound, kicks me badly, Pivot Points and CCI.

I would like constructive advise re: a mechanical system that we can put together, I don't like looking at Candlestick patterns etc, I want something that says buy/sell, as simple as that, I know we can do it!

It has to be business like, no confusion, it also has to be K.I.S.S.

I'll create a free chat room to discuss my trades in demo, when and if there are enough people interested in what I have to say.

That's enough to get this kicked off I hope

May the Forex be with you. (I know it's corney, but I like it.)

Alf.

I'm going to try a simple strategy.

1. Look for Inside Bars on H1 and above.
2. Trade the breakout.
3. Only trade EU, GU, UJ, UC in the EURO/NY sessions. (Most Volume)

Not sure about TP and SL's yet.

Anybody got any idea's?

Thanks

Hi Alf, About 3.5 years ago I was where you are now, and if you don't mind I'd like to input my 2 pips into your thread.

I really like the fact that from the start you are trying to create and apply rules. This usually the make or break factor for traders. I myself started to apply rules to trading when I learned to abide them elswhere, like behind the wheel of a car. I reasoned that I will never be able to follow my own rules if I can't respect a set that exists already.

You wrote:

And also:


The way to find out is through a backtest. This is a game of probabilities, therefore, knowing some average values of how far the price goes will give you an idea of what to expect as you forward trade.

Each trade is like buying a cat in a bag. You don't know which bag will hold a black cat that will be worthless, or a blue one, which you could resell for profit, but a trader that has bought hundreds of cats in bags knows that he has a 40% chance of finding a blue cat and 60% of finding a black one, but the blue one pays 3 times more than the black.

I hope you see the point in this highly hypothetical tale about a cat in bags market and will use it to your advantage.

Good hunting,

Daniel

PS. One of my biggest mistakes in the past was not testing for probabilities.

Hi,

Thanks for the post.

Do you manually backtest?

P.S. I guess you're not a cat person then, if you like putting them in bags.

H4 G/U IB breakout long, looking for retrace.

Didn't retrace far enough, then shot up because of NFP, I'm getting better at noticing the news these days.

My last system, the one I'm currently trading, I let evolve over months from a mad idea of trying to catch all moves to trading with choosing a direction first, so many months forward testing it was.

You can read the story in detail on my blog (link in signature). You ought to go and have a look at the first year of my posting and see how chaotic my trading was. Notice my jumps from one sys to the next and most of all, lack of my ability to refrain from trading without one.

I like your signature about consistency. I initially misunderstood consistency with win rate, but really it's consistency at applying rules.

Good luck

Daniel

PS. I grew up with a dog

Sure, I'll read your blog...

In the meantime, along with my Inside Bar Trading, I am going to start trading the Asian/London session breakout, firstly on the UJ, EU and GU.

1. The average session is 9 hours, therefore there are 108 M5 bars.
2. Plot the High / Low of the previous 108 bars, gives you support / resistance.
3. Use standard Heiken Ashi Candles. (Settings 0,1,0,1)

Reasoning : Volume moves the markets and more volume comes in when the sessions overlap, so there is an opportunity to spot the breakout, wait for the pullback, (in order to set S/L) and hopefully ride the trend up / down with Heiken Ashi candles. Trailing the stop above / below every pull back.

Ranges are a phenomena of traders not buying or selling, I don't think so , they are accumulating or distributing, so it stands to reason that price won't be range bound for too long!

Backtested and looks good, just need to forward test.

Alf I apologize, I didn't mean to sound superficial, and now you made me realise that I may have.

It's just that when I now look at my early blog posts I see all the mistakes I have made and initially thought others could benefit from reading about them.

I realise that they were my mistakes, and others need to make their own to get to the point where I am now.

Hope my remark didn't antagonise you

Regards,

Daniel

Erm, no, I wasn't being sarcastic, I have read some of your blog and yes it does help knowing there are other people out there experiencing the same frustrations.

Trading, like life, is a balance, I think you overanalyse things, try not to take things the wrong way.

P.S. Do you think I'm making a mistake with my suggested strategy.

Cheers.

Alf, thank you for the enlightening chat we had today

Keep up the attitude

regards

Daniel

I hate being in a losing trade, hoping for it to come back and become a winner, I'd rather cut it as soon as possible, because, yes, sometimes I am wrong.

Dito.

You're Welcome.

I have clearly defined rules.

I must trade without hesitation or reservation!

New $10,000 demo account opened.

Sorry but the Admins don't like my chatroom, but hopefully they won't mind me posting how my trades went in the chatroom today :-

Alf: uj just broken back into daily range
Alf from x.x.x.x joined the chat 6 hours ago
Alf: eu might break to the downside
Alf: eu break
Alf: wait 4 pullback
Alf: same on gu but not as strong
Alf: eu retrace
Alf: looking 2 short
Alf: short eu
Alf: 1.3890
Alf: stop 1.3902
Alf: 12 pips
Alf: no trailing stop
Alf: up 30, so tempting to close out - lol
Alf: must stick 2 rules
Alf: stop set to 1.3869
Alf: previous swing high
Alf: stoped out at 21
Alf: plus 21
Alf: 1.75 R:R
Alf: uj breaking lower, waiting 4 retrace
Alf: short uj 98.30
Alf: stop 98.36
Alf: 6 pips
Alf: stopped out minus 6
Alf: i didn't go against my system