DislikedHi Calafornia,
I too would like to hear from you regarding your daily system if you dont mind.
CheersIgnored
I trade a few strategies. The only one that I will speak about here on this thread is Entry 2, whose rules are discussed by 60mm in the first post. I first learned about it from Steven, and then happened to stumble upon this thread recently. I trade it on D1, 25 pairs, 1:1, and s/l is moved to b/e when price is 75% of the way to t/p. It is about 70% mechanical/30% discretionary. Risk is 0.5%, which allows me to a) be indifferent to the outcome of any one trade, and b) take more than one trade simultaneously involving a particular pair (e.g. AJ and AU at the same time), which I would not feel comfortable doing with a live account that used 1%-2% risk. My favorite tf is H4, however I trade D1 as it allows me to have more of a life. I compensate for fewer setups on D1 by also trading commodity and index futures. The edge offered by Entry 2 is one of the largest I have come across, even without discretion, as my research in a previous post indicates. However, it is my belief that a trader is best served by personalizing a strategy and making it his own...and that means adding discretion, which should increase the probability for success anyway.
For quite a while, and before I learned of this thread, I used the other setup that is the focus of this thread, the engulfing bar setup. It is a very good setup, and is the most common setup I have seen profitable traders use out of all the many profitable setups used in fx trading. The biggest piece of advice I can offer anyone using the engulfing bar setup as described by 60mm above is to experiment with a retracement entry instead of using a confirmation entry (for longs, entering on a break of the high of the signal bar). I was a big fan of the confirmation entry for years before I began trading engulfing bars. However once I began trading EBs, I learned that there is no advantage in using the confirmation entry, at least for the EB strategy (for Entry 2, a confirmation entry is a must). Entering at market on the close of a signal bar gives you the advantage of reducing risk (distance from entry to s/l) compared with that of a confirmation entry, unless of course price closes at the high of a signal bar (for longs) which would be virtually the same as a confirmation entry. Entering on a retracement reduces risk further, and I found that the increased reward:risk ratio more than compensates for the missed trades that go on to become winners which never retrace to allow for entry.
If there is only one important concept in my posts, it is this: Reducing initial risk (distance from entry to s/l at the moment a trade is entered) increases reward:risk ratio and is, IMHO, the single most important thing a trader can do to increase profitability of the buy/sell line strategy (entry #1). In this regard, each trader should do their own research and see what works best for them.
Make it a great week!
California
