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Keeping it simple - MY Strategy

  • #1
  • First Post: Jul 2, 2011 6:48am Jul 2, 2011 6:48am
I've always believed in keeping things simple with most things in life and when I trade I use the same way of thinking.During my normal day I'm a joiner in the construction industry in the UK.But as things this year have been pretty slow I have started trading Forex since January 2011.

I opened a mini account with £1000 which to date has now grown to just over £3500 within 6 months.Below is an example of how I usually trade and so far I'm pretty pleased with my strike rate of around 70%.Apologies for any errors I may have made in the details below but hopefully you'll get the general idea.

PLEASE READ ON

Identify 4 main currency pairs to trade for the day.These are usually the main pairs such as GBP/USD - EUR/USD - USD/JPY and EUR/JPY but you may choose any.

Using the latest TECHNICAL ANALYSIS you should clearly mark these out onto each chart.It’s recommended that you use 30 minute or hour charts which covering 4 pairs during on 24 hour period should give you several trade opportunities.

Now,access your account and check your balance from the previous day’s trading.Each new trade should limit risk to 1% of your balance.

For example;

Lets say we are opening a trade in EUR/USD. If we enter that trade at 1.4516 then using a 10 PIP stop then the amount of that stop should the trade go against us would mean we’ll lose only 1% of our account balance.

  1. Balance of £3664 means we limit risk to just £36. Then divide £36 by 10 PIPS which = £3.60 per PIP. As each currency pair varies in price it’s a good idea to get used to these first.This can be worked out quite easily and make a note of them.In time you’ll know in advance what they are.

  1. So if you think the pair will go DOWN you will need to set your STOP @ 1.4526 (10 PIPS above).Using a ratio of 2/1 the LIMIT should then be set at 1.4496.

  1. Using this formula and the amount shown a profit of £72 is made which would be 2x the amount risked. A strike rate of around 71% can be achieved using this method.

  1. With time and patience it would be quite possible to be soon earning around £30k per year from home……..and some days you might only need to trade 2 or 3 hours.

FXsniper Pips This Month: -777
  • #2
  • Jul 2, 2011 9:37am Jul 2, 2011 9:37am
Quoting paulw
I've always believed in keeping things simple with most things in life and when I trade I use the same way of thinking.During my normal day I'm a joiner in the construction industry in the UK.But as things this year have been pretty slow I have started trading Forex since January 2011.

I opened a mini account with £1000 which to date has now grown to just over £3500 within 6 months.Below is an example of how I usually trade and so far I'm pretty pleased with my strike rate of around 70%.Apologies for any errors I may have made in the details below...
So, how do you achieve a 70% strike rate with a risk:reward of 1:2? You must be insanely good at picking the right trading opportunities, otherwise I can't imagine a way of getting such a high strike rate when you risk:reward is so sided towards the reward.
  • #3
  • Jul 2, 2011 10:02am Jul 2, 2011 10:02am
Quoting Custos
So, how do you achieve a 70% strike rate with a risk:reward of 1:2? You must be insanely good at picking the right trading opportunities, otherwise I can't imagine a way of getting such a high strike rate when you risk:reward is so sided towards the reward.
Maybe only during very high volatility moves. Using very sophisticated TA with Sl = 10 usually gives total loss.
  • #4
  • Jul 2, 2011 10:18am Jul 2, 2011 10:18am
If you're good enough at TA for 71% W:L and a 10-pip stop, why limit TP at all? It just seems a copout to avoid really reading the chart. Most all moves in g/u are at least 20 pips wide, so I get that. But not all moves give you a 10-pip leeway from a random position, which is where I suppose the 71% comes from.
  • #5
  • Jul 2, 2011 10:21am Jul 2, 2011 10:21am
Quoting Custos
So, how do you achieve a 70% strike rate with a risk:reward of 1:2? You must be insanely good at picking the right trading opportunities, otherwise I can't imagine a way of getting such a high strike rate when you risk:reward is so sided towards the reward.
Maybe, he is talking of the dream he had last night!
  • #6
  • Jul 2, 2011 11:45am Jul 2, 2011 11:45am
Quoting kingsurfer
Maybe, he is talking of the dream he had last night!
Let us respect all people's ideas. About 99% are losers on this forum and we spent days and nights studying their losing systems. As for me, he gave some good idea and why not develop it.
  • #7
  • Jul 2, 2011 12:12pm Jul 2, 2011 12:12pm
It was something I picked up when I attend a couple of seminars a couple of years ago and I made notes of what was said.Since then I tried these out using a demo account and then felt confident to use a live mini account.

I'm getting a little more confident with things now but have to admit to being cautious.At the moment it's helping me pay a few bills until my work picks up in construction,which might take some time.All I can say is that I must be doing something right to increase my balance as I have done so that in itself is proof,if only to myself.

It's sensible to place the 10 PIP stops as on occasions trades have gone completely opposite direction.Remember though,this strategy is just one I have chosen to use and I have no doubt many of you have your own.........good and bad.So far this one works well enough for me and I'm happy with that but if you have any questions I'll try to explain them.

For those who wanted to know more,I use the candle charts and watch multiple pairs for wicks.When I see 2 or 3 gather together then I trade on those usually when those pair are fairly volatile.Often it'll provide me with a few opportunities each day.Hope that helps.If I can figure out how to post a chart as an example I'll do so.
FXsniper Pips This Month: -777
  • #8
  • Jul 2, 2011 12:52pm Jul 2, 2011 12:52pm
Quoting Expert44
Let us respect all people's ideas. About 99% are losers on this forum and we spent days and nights studying their losing systems. As for me, he gave some good idea and why not develop it.
Assuming the spread for GBPUSD is 3 pips, then distance from entry to SL is only 7 pips. Distance to take profit will then be 23 pips. Assuming random entry he can only hit profit 23% of the time.

Any forex trader who can hit consistent 35% against this odds will put all brokerage firms out of business in a few months.

He says he has a hit rate of 71% and he picked this up from someone in a seminar! And you say he was not sleeping on duty. If you are his friend please wake him up.
  • #9
  • Jul 2, 2011 2:05pm Jul 2, 2011 2:05pm
Quoting paulw
It’s recommended that you use 30 minute or hour charts which covering 4 pairs during on 24 hour period should give you several trade opportunities So if you think the pair will go DOWN you will need to set your STOP @ 1.4526 (10 PIPS above).[/size][/font][/list]
What difference in using M30 or M5 for a move. You think that pair will go down, so based on what is this thinking? You can download setupscreenhunterfree
and it is easy to cut out any part of chart and upload it here.
please show us your examples...
  • #10
  • Jul 2, 2011 2:14pm Jul 2, 2011 2:14pm
Quoting Expert44
What difference in using M30 or M5 for a move. You think that pair will go down, so based on what is this thinking? You can download setupscreenhunterfree
and it is easy to cut out any part of chart and upload it here.
please show us your examples...
or you could just hit "PRTSC"

then paste into "paint"

save and upload attachedment
  • #11
  • Edited 4:41pm Jul 2, 2011 4:12pm | Edited 4:41pm
Hope I've done this right.Copied one of the charts I use to show you an example so here goes.

Attached Image (click to enlarge)
Click to Enlarge Name: eurusdex.jpg Size: 69 KB

The area is indicated by 2 black lines.......in this case the pair went down.Remember,I watch upto 4 pairs on days I trade and this will usually give me at least 4 chances of a trade.If I can I'll show a few more charts this week when I have time.

Someone rightly pointed out that a 10 pip stop would actually result in a 7 pips stop and they are quite right.However,so far I've got away with this and perhaps I should pay more attention to this in my future trades.That said,at present I'm really just trading on my days off to supplement my falling income from my employer.Hard times I know but that's life.

Attached Image (click to enlarge)
Click to Enlarge Name: gbpusdex.jpg Size: 70 KB


The chart above shows 2 trades.Both started on positions I thought would go up.Both did indeed prove correct,however,on the later of the 2 trades I used a 10 pip SL only for it to be taken out by a sudden and sharp drop BEFORE it went on to climb.Notice though how I only trade AFTER I see two wicks together (or tails as I prefer to call them).The first of the two GBP/USD trades actually went some distance before a reversal but my limit kicked in first.A missed chance maybe but I'm happy with that.Last week (week ending July 1st) I placed a total of 7 trades of which 2 went against me.I know there'll be one or two people on here who don't believe my method but I can't argue with the fact I've made at least a small amount of money so far this year.
FXsniper Pips This Month: -777
  • #12
  • Jul 2, 2011 4:43pm Jul 2, 2011 4:43pm
Quoting paulw
I've always believed in keeping things simple ...

Using the latest TECHNICAL ANALYSIS you should clearly mark these out onto each chart.
"Using the latest technical analysis," two traders can often trade in opposite directions.

Quoting paulw

  1. Using this formula and the amount shown a profit of £72 is made which would be 2x the amount risked. A strike rate of around 71% can be achieved using this method.

Again, what method exactly?
  • #13
  • Jul 5, 2011 11:05pm Jul 5, 2011 11:05pm
SHould be continued.
  • #14
  • Jul 7, 2011 12:28am Jul 7, 2011 12:28am
Everything sounds perfect.. the problem is that you are not explaining your actual strategy... You are just saying that you did 70% return... nothing else.. I mean, anyone can open a thread and say that, but what's the point? I thought you were going to state a point and present your actual strategy, that's what the thread title says.
The Black Swan: The Impact of the Highly Improbable
  • #15
  • Oct 9, 2011 6:09pm Oct 9, 2011 6:09pm
Apologies for any confusion here. I thought by keeping it simple and explaining what I do and looking at the charts I presented,that it would be enough.

My stragety I suppose is that I look for volatile pairs on any given day along with other information regarding those pairs.These may include trends,TA and others.One of the things I do is that I rarely (if ever) leave a position open overnight.I prefer to trade on what I can see and not on what I know.I work generally on the understanding that a pair can fall 3 times faster than it will rise so obviously I tend to trade short most of the time.

I've been back at work over the summer so not traded much in recent months.But my account now shows £4279.......not bad considering I started this year at £1000.Small amount to many people on here but more importantly it's given me belief.
FXsniper Pips This Month: -777
  • #16
  • Oct 10, 2011 7:55am Oct 10, 2011 7:55am
Can't really see a problem with his method. At the end of the day, whether there is a SL of 7 or 10, if it is creating profits - whether rightly or wrongly (as the method dictates) is really besides the point.

My trading style does not fit into this and I would lose money, but if it works for him, and it is profitable - Smashing!

250% in 6 months is a fantastic return, and is some great trading. My only advice would be to take that 1k out, and you are trading on free money... and you have paid yourself a grand at the same time!

Happy trading!
  • #17
  • Oct 10, 2011 8:55am Oct 10, 2011 8:55am
When I attended one of the seminars I remember a speaker saying that each trader is different and has his/her own style and plan.I believe this is true and the style of trading I use is unique to my daily routine and lifestyle.

You made a good point saying I should take my original £1000 and I'm thinking seriously about doing this before Christmas.Then in the New Year I'll review my plan although to be honest I'm pretty happy with my returns.Perhaps I should consider increasing my account and ultimately my annual returns.I'm careful though not to get too greedy or over-confident so we'll see how things go.

Not been on site working in my day job today so I logged on and placed a short on USD/JPY this morning which has earned my 1% of my capital so pleased with that.From a few emails I've had recently a few on here are beginning to understand my method although they also have there own system.At the end of the day we all trade differently to a point and if it works for them then brilliant.
FXsniper Pips This Month: -777
  • #18
  • Oct 10, 2011 3:32pm Oct 10, 2011 3:32pm
Quoting paulw
.I work generally on the understanding that a pair can fall 3 times faster than it will rise so obviously I tend to trade short most of the time.

.

That probably is true for the stock market where the underlying fundamentals driving the value of the stocks is upwards and a down move is driven by profit taking or bad news. But the currency markets have no bias towards long or short except in the short term. To make this claim and rely on it in the long term is asking for trouble.

On the screen shot, you show 2 trades going long. It seems to me that there was a missed short opportunity in between those 2. Was there some reason for not taking it?
  • #19
  • Oct 13, 2011 7:04pm Oct 13, 2011 7:04pm
As you correctly pointed out,an opportunity to short on the GBP/USD pair was missed.The reason for this as I remember was a degree of uncertainty on my part (or lack of experience) which meant I decided not to trade on that occasion.With hindsight it was a very good chance missed,but experience has taught me that with patience another chance soon presents itself.

My mini account now stands at £4486........so thats a profit so far of £3486 this year. Not a great sum of cash but considering I started with £1000 I've done OK. I'm now planning that by New Year I'll bring that upto £7000.

If I can in the next few weeks I'll upload a few new charts of trades I've actually taken profit from.
FXsniper Pips This Month: -777
  • #20
  • Oct 14, 2011 4:30am Oct 14, 2011 4:30am
I kind of understadn what you are doing here, and I actually like the strategy - It is fairly simple (although with a high level of human analysis to decide whether to enter a trade or not).

As you seem to say, it works for you, and you seem to be doing pretty well with it. The returns are pretty good, with a decent return of profitable trades.

I think I may take this away and see what I can do with it... I have an idea for at least one indicator that could ramp up the percentage of winning trades, but of course that would also have the effect of taking away some winning trades by eliminating them...

What time frame are you working on? 5 and 10 minute charts did you say?
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