FollowTheLeader System

Who wants to test the FTL System?

The rules are quite simple, and best of all, no indicators needed - just the candlesticks! Especially made for newbies and forex dummies, like me.


Time Frame - DAILY (but seems to be ok with H4, H1 too)
CURRENCY - GBPUSD (applicable to all, I suppose)

When to BUY or SELL?
At the beginning of the day, just check the previous candle. If it is positive, then BUY, if negative, then SELL

TP - let it ride, until a SL is met

SL - on BUY, if the candle reverses and reached the CLOSE of yday; or if the current candle closes on lower (next candle we open SELL)
SL - on SELL, if the candle reverses and reached the CLOSE of yday, or if the current candle closes on higher (next candle we open BUY)


Always trade with the direction of the last candle. So, if the SL of the day was hit, but it came back and went to the direction of the previoius candle, we will open a new position again. But if it is a reversal, we dont open a new position.

I think this can be best explained by using some actual candlesticks, GBPUSD, Daily timeframe

http://img17.imageshack.us/img17/593/gudaily.jpg

Jan 2 OHLC -
1.4565 1.4576 1.4377 1.4546

Jan 5 OHLC
1.4546 1.4738 1.4433 1.4699

Jan 6 OHLC
1.4698 1.4992 1.4503 1.4916

Take note of Jan 2 candle, it is a BEAR. So for Jan 5 we open SELL trade, SL at Open price of Jan 2 (1.4565). Jan 5 opened at 1.4546, reversed and went up, hit our SL. -19 pips + the 3 pip spread, net loss of 22 pips for the day. We DO NOT open BUY position on this day because previous candle was a bear.

Day #1 -22 pips

Next day, we BUY (based on Jan 5 bull candle), SL at Open of Jan 5 (1.4546), again it went to a low of 1.4503, thus hitting our SL and a loss of 153. But lo and behold, it went back up again, and went pass our previous day's close. Since we are on a BUY trend, we opened a new position. Thus ending that trade with a nice +218, for a net profit of +59pips for the day. We only open a SECOND TRADE for the day, if it is on the same trend.

Jan 7 (#4) - no doubt a winner on BUY. +175 pips
Jan 8 - another winner with BUY +118 pips

Jan 9 (#5) - the candle closed lower, thus we close the trade, and end the day with -54 pips

So far, as of now, we have +276 pips.


If we go on, we'll have 2 more winning days with SELL, +244, +319. Assuming we close the trade everyday, at the end of the day. That's why we count the 3 pips spread. Then lost on the 3rd day Jan14, with -115pips.

Total is net gain of +724 pips. Not bad for a "no-brainer," just follow the leader trading, huh?

For the days of Jan here are the results: Net gain of +1407 pips

2009.01.02
2009.01.05 (19)
2009.01.06 59
2009.01.07 175
2009.01.08 118
2009.01.09 (54)
2009.01.12 244
2009.01.13 319
2009.01.14 (115)
2009.01.15 (92)
2009.01.16 96
2009.01.19 (102)
2009.01.20 493
2009.01.21 (32)
2009.01.22 (32)
2009.01.23 73
2009.01.26 (79)
2009.01.27 134
2009.01.28 114
2009.01.29 (68)
2009.01.30 178

For the first 7 months of the year, from Jan 2 to Jul 31, net gain is +3132 pips, if my computation is correct. Maybe someone knows how to code an EA, so we can backtest/forward this? I just used excel sheet to compute them manually.


Here's the EA, as provided by Ronald Raygun - http://www.forexfactory.com/showpost...8&postcount=24

I guess your results will depend on which broker you are using and therefore at what your time - EST or GMT - your daily candle opens......http://www.forexfactory.com/images/icons/icon12.gif

hey 10pips.

Nice method, good luck

Does it matter a lot? Over a period of time ...

Well, my broker starts on GMT, I guess?!?

hey 10pips

is your stop loss is placed at the open of the previous day?

this bit confuses me?

SL - on BUY, if the candle reverses and reached the CLOSE of yday; or if the current candle closes on lower (next candle we open SELL)
SL - on SELL, if the candle reverses and reached the CLOSE of yday, or if the current candle closes on higher (next candle we open BUY)

What happens when the currency is going sideways and not trending????

^Yes, it does.


http://img17.imageshack.us/img17/593/gudaily.jpg

Jan 2 OHLC -
1.4565 1.4576 1.4377 1.4546

Jan 5 OHLC
1.4546 1.4738 1.4433 1.4699

Jan 6 OHLC
1.4698 1.4992 1.4503 1.4916



So for Jan 5 SELL trade, we set SL at Open price of Jan 2 (1.4565). Jan 5 opened at 1.4546, reversed and went up, hit our SL. -19 pips + the 3 pip spread, net loss of 22 pips for the day.

Next day, we BUY (based on Jan 5 bull candle), SL at Open of Jan 5 (1.4546), again it went to a low of 1.4503, thus hitting our SL and a loss of 153. But lo and behold, it went back up again, and went pass our previous day's close.

Since we are on a BUY, we opened a new position. Thus ending that trade with a nice +218, for a net profit of +59pips for the day.

So, stoploss is at the previous bar's open price and re-entry is at the previous bar's close price?

We keep the position open, until TP or SL is reached!

Yes, SL at previous day's open.

Re enter ONLY if the same trend.

We did not enter a BUY on Jan 5, because Jan 2 is a SELL.

Somehow, we re-enter a BUY on Jan 6, because Jan 5 is a BUY, even after we hit our SL earlier on.

Keep the questions coming please, as I hope this thread will generate enough interest for someone to make an EA and share it publicly as well.

Go for it.

You can set the long-term timeframe (let's say daily), and attach the EA to a lower timeframe (like 1M).

You can also set the maximum trades allowed per day. By default, there are two trades allowed, the initial trade + one reentry.

Great! Thanks man! That was fast!

Will have this tested immediately and see how it goes!


Maybe you guys can test it too, and let's compare notes.


Obviously, to have better results, we must develop a good filter for entry. Now, that, is a bit way over my head... indeed, suggestions are welcome!

Go the other way.

Develop a good filter for exit.

I am trying to see how MA crosses will give a good signal for ENTRY and EXIT.

Btw, this EA works on all TF right?


Is there a setting I should know? I used the StrategyTester on Daily GU, and it did not trigger any actions?

Lot size is 0 by default.

Other than that, the EA should work by default.

After certain profit (let say 50 pips profit) set it BE to let it continue run.

Fixed.

SL and TP are now properly placed.

A yellow line will appear when and where there is supposed to be a reentry.

everything else seems to backtest properly.

Go ahead and break it again!

i tried all default settings and it is not making any trades

Because the default lot size is 0

It won't work for me either and I changed the lot size.
I never have been able to make one of your EAs work.
I'm sure it's just me doing something wrong.