SRDC level 1 revisited | Forex Factory

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SRDC level 1 revisited

  • #1
  • First Post: Sep 21, 2009 2:25pm Sep 21, 2009 2:25pm
This method basically employs trading breakouts of previous day high or low. It is a high probability setup and can be traded on most pairs effectively. Sometime back in 2006 a guy by username of orangeroshan started a thread for his SRDC method and had quite a huge following. His methods are based on the break of yesterday high or low levels along with his so called more advanced methods or systems. However in my opinion, its the basic strategy that is worth many pips, the other complimentary methods are really "just another system". I have attached below, the original document describing his strategy uploaded by orangeroshan in his thread.

Why did I bring up this strategy again ? Not because other methods didn't work, but rather circumstances in my life has changed that I do not have as much screen time as before. I will not go too much into detail about what happened but forex trading is still a major source of income for me. (I started trading full time as of late 2007). Not being a fan automated trading, I needed a quick and decisive way to locate high probability setups and I "rediscovered" this simple and effective way to trade. Use this along with you own technical or fundamental analysis. Pull out the charts of your favourite pairs and see whats happens to the PA when these levels are breached.


If there is anybody who like me has forgotten how simple and mundane finding profitable trades can be....here is something to share

Attached File(s)
File Type: doc OrangeRoshan SRDC method.doc   113 KB | 2,881 downloads


Do note that I do not use the strategy exactly as described in the doc, but rather as a guide, I have my own ways to milk more pips out of it when opportunities occur.


Regards

mARK
  • #2
  • Sep 22, 2009 9:23pm Sep 22, 2009 9:23pm
Hi Mark,

How about sharing some of those ideas for milking more pips out of the strategy?

Thanks.
  • #3
  • Sep 22, 2009 9:47pm Sep 22, 2009 9:47pm
terrible risk reward ratio. 5 tp and 30 sl. This must b dealt with in your little additions no?

Quoting aiyahmarklah
This method basically employs trading breakouts of previous day high or low. It is a high probability setup and can be traded on most pairs effectively. Sometime back in 2006 a guy by username of orangeroshan started a thread for his SRDC method and had quite a huge following. His methods are based on the break of yesterday high or low levels along with his so called more advanced methods or systems. However in my opinion, its the basic strategy that is worth many pips, the other complimentary methods are really "just another system". I have attached...
  • #4
  • Sep 22, 2009 10:11pm Sep 22, 2009 10:11pm
thanks for share, I like it

---------------

The art of Forex Scalping
  • #5
  • Sep 22, 2009 10:35pm Sep 22, 2009 10:35pm
OK, call me crazy, but 5 TP and 30 SL is the epitome of a bad system. I think "Orange" used to use 1 pip, though, so it seems he has grown up a little bit. But I would personally warn every body who looks at this "system" that it will ruin your account, and to trade the opposite way would produce a nice system.
  • #6
  • Sep 23, 2009 3:27am Sep 23, 2009 3:27am
Hi jtmoore007, Dreamliner, I agree, lousy risk management approach in the original document, my guess is that he (the originator) intends it to be part of his other "systems".

Hi errich fx, I am glad you like it.

To Bobcat2 and others who are looking at how to trade this approach, there is really no special method towards this, in fact you can just use mainstream technical analysis to "improve" on it. Otherwise flip a coin, not much difference really. I suspect many profitable trades derived from systems happened around these levels albeit different intentions.

Some of my thoughts and approach when a potential trade appears I share below, caveat emptor.

Stoploss levels :

Usually I have hard stoploss located at the other extreme end of the hourly candle that breach the high or low of yesterday. But not all the time, because sometimes that candle can have a >50 pips range, that would result in poor risk reward ratio. Use some common sense when faced with this kind of situation.

Position entry :

Be flexible on entery. Look at what happened. How do you structure your bets ? You can :

1. Add to positions as your trade progress.
2. Enter on retracements.
3 Whatever TA or FA that works for you.

Finally on trading this approach, prices can only move either up or down, if your long breakout trade did not work out well, then the profits are usually found going the opposite way. Don't be paralysed when things go wrong, be quick to change according to what the price action is telling you.

Hope the above helps.

Regards

mARK
  • #7
  • Sep 29, 2009 12:10pm Sep 29, 2009 12:10pm
Quoting Dreamliner
OK, call me crazy, but 5 TP and 30 SL is the epitome of a bad system. I think "Orange" used to use 1 pip, though, so it seems he has grown up a little bit. But I would personally warn every body who looks at this "system" that it will ruin your account, and to trade the opposite way would produce a nice system.
Not to step on any toes, since I have been following your correlation "hedge" thread with much interest, but, although I agree with your point on poor R:R, your system suffers from the same symptom. In reality, your system has a pretty poor R:R too; Modest wins:margin call/"too large of a loss". I still appreciate your system and have high hopes for it, but it does kind of negate your advice here, to a certain extent....

Please correct me if I am wrong, and I apologize for the thread originator for cluttering the thread...
  • #8
  • Sep 29, 2009 1:23pm Sep 29, 2009 1:23pm
Hi nysnowboard,

no need to apologize, the way I appreciate this SRDC "system" is really how it quickly it can help to zoom in to high probability S/R levels. TA, FA, systems or any form analysis are really just subjective interpretation. Whether that level will hold or not, just play accordingly.

I don't do those mt4 or any programming stuff, too much technical mumbo jumbo for me. Like I explained earlier, I can't afford as much screen time now (at least for the time being), I need to be able to locate setups fast, this SRDC thingy can be located with a glance, which is what I liked about it. The rest is really pretty much how you trade it.

Regards.

mARK
  • #9
  • Jul 12, 2011 3:13pm Jul 12, 2011 3:13pm
Hi, did you have any luck with this system? looks like all talk on SRDC has died down?
  • #10
  • Jul 14, 2011 10:45am Jul 14, 2011 10:45am
Quoting smad
Hi, did you have any luck with this system? looks like all talk on SRDC has died down?
I lloked at the last few days using just the breakout of the previous days Highs and Lows.

Day 1. Win 20+ Judged by eye

Day 2. BEx2

Day 3. Win 50/60

Day 4 Win 35

Day 5 Lose 5, win 50

Day 6. Win 60

Day 7. lose 25

Day 8. win loads - 229 in fact, measured
  • #11
  • Jul 18, 2011 5:06pm Jul 18, 2011 5:06pm
I have backtested this on EURUSD from jan 2010 to current day and results seem pretty good, which is why I was curious as to why we hear so little about it?

The results are attached and the settings were as follows
SL: 25
TP: 15
Lock in 2 pip profit once price reachs 5 pips above entry.

Result is 90% winners (31 losers out of 337 trades).
Modelling Q was @ 90% so data was good.

Would like to hear anyones thoughts on the results
Attached Image (click to enlarge)
Click to Enlarge Name: StrategyTesterEURUSD.gif Size: 8 KB
  • #12
  • Jul 18, 2011 6:01pm Jul 18, 2011 6:01pm
Quoting Dreamliner
OK, call me crazy, but 5 TP and 30 SL is the epitome of a bad system. I think "Orange" used to use 1 pip, though, so it seems he has grown up a little bit. But I would personally warn every body who looks at this "system" that it will ruin your account, and to trade the opposite way would produce a nice system.
You're crazy.

Anyone who is going to ignore a system solely because of a poor R:R is an idiot.

What matters is expectancy, and frequency.

I can't believe you're really of the opinion that merely by having winners 6x that of losers you'll have a "nice system". There's this thing called win rate, maybe you've heard of it.

You're the epitome of what's wrong with retail trading forums, people just regurgitating BS they've heard, without ever thinking, or encouraging others to.

http://en.wikipedia.org/wiki/Ab_initio
  • #13
  • Jul 18, 2011 6:52pm Jul 18, 2011 6:52pm
Quoting smad
I have backtested this on EURUSD from jan 2010 to current day and results seem pretty good, which is why I was curious as to why we hear so little about it?

The results are attached and the settings were as follows
SL: 25
TP: 15
Lock in 2 pip profit once price reachs 5 pips above entry.

Result is 90% winners (31 losers out of 337 trades).
Modelling Q was @ 90% so data was good.

Would like to hear anyones thoughts on the results
Smad,

Can you give us the buy rule you used? How many pips above yesterdays high or low was your entry? and as you mover your stop to BE+2 at +5 pips profit how many trades out of 337 got stopped out at +2?
  • #14
  • Jul 18, 2011 7:04pm Jul 18, 2011 7:04pm
Hi Fugly

The entry is on break of previous High or low +/- spread + 2 pips

Of the 337 winnders, 203 were closed at around 2 pips and 103 were taken to the full 15 pips. There could obviously be a little more tweaking to see if i can get full profit number higher by perhaps allowing more breathing room after 5 pips is hit (although i prefer to lock in in profits straight away, thereby increasing win rate and reducing change of consecutive losses)

I've attached the full results from strategy tester. I think a year of back testing is sufficient - any more may not be representative as markets and ranges change meaning the parameters may not be relevent.
Attached File(s)
File Type: zip Strategy EURUSD.zip   46 KB | 735 downloads
  • #15
  • Jul 19, 2011 5:04am Jul 19, 2011 5:04am
seems fine ..... thx smad ....... in the test you've used fixed lot, could you you use mm say 3% or 5% (since losses are very few and no string of losses) and see how the result comes out?

thx again
  • #16
  • Jul 19, 2011 6:09am Jul 19, 2011 6:09am
Quoting fugly
seems fine ..... thx smad ....... in the test you've used fixed lot, could you you use mm say 3% or 5% (since losses are very few and no string of losses) and see how the result comes out?

thx again
I've attached the results from Jan 2010 - current day when using risk of 5% (which i'm comfortable with in order to build account).

Results is £10,000 account yields a profit of £66k.

Now I'm waiting for someone to tell me what i've missed and why this would never work...
Attached File(s)
File Type: zip Strategy (5risk).zip   50 KB | 546 downloads
  • #17
  • Jul 19, 2011 8:27pm Jul 19, 2011 8:27pm
I wrote my own (simple) EA to try to duplicate what's in the thread and I'm not able to match your results, smad.

The results are attached. Don't worry that the report says I ran it on H4 timeframe. My EA actually looks at D1 only anyway. For some reason I had data mismatch errors on D1 so I used H4. It could be I simply have a data problem in my backtest.

If you want we can swap EAs here on the thread. I show you mine, you show me yours.
Attached File(s)
File Type: zip tester.zip   52 KB | 496 downloads
You are in a maze of twisty little passages, all alike.
  • #18
  • Jul 20, 2011 3:58am Jul 20, 2011 3:58am
Quoting stevegee58
I wrote my own (simple) EA to try to duplicate what's in the thread and I'm not able to match your results, smad.

The results are attached. Don't worry that the report says I ran it on H4 timeframe. My EA actually looks at D1 only anyway. For some reason I had data mismatch errors on D1 so I used H4. It could be I simply have a data problem in my backtest.

If you want we can swap EAs here on the thread. I show you mine, you show me yours.
Hi Steve,

Couple of things i notice which may cause the difference:
- I enter at hi/lo + 2pips + spread. Are you entering directly on the hi/lo?
- Your lots are fixed. My lots were determined using 10% risk per trade (although this will only affect final profit)

Could you try again based on the first point? I would expect to see a similar win rate.
  • #19
  • Edited 6:30am Jul 20, 2011 6:10am | Edited 6:30am
One of the inputs to my EA is a variable called "Stretch" which is the number of pips beyond the high/low at which to place the buystop/sellstop. The test run I posted had Stretch=0 so you're right, I was taking trades right at the high/low of the previous day.

When I get a chance tonight I'm going to re-import my backtest data (M1 data from Forexite) just to be sure. What data are you using? Is it Alpari data or some external source?

I already played around with the Stretch and never got the results you did. In fact a Stretch of 4 (2 pips + 2 pip spread) performed the worst.

*later*

OK I couldn't stand waiting for tonight. I re-imported my data and re-ran my tests with the same result. The Stretch really doesn't affect the results that much.
You are in a maze of twisty little passages, all alike.
  • #20
  • Aug 18, 2011 6:47am Aug 18, 2011 6:47am
Hello folk's,

Anyone trading this method live? I'm going to give it a run.

Good trading all.
'Fail to plan, plan to fail'
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