Buy sell line trading

Thanks 60minuteman... was wondering if you still move SL to BE at 1:1? And if so, have you found this over time more reliable on some pairs more than others?

The real art is in the exits and a whole book could be written about that (it probably has been already!)

I did the analysis as it is great to know that even going for only 2:1 and with using just a few filters, without even thinking too much about the trades, it is still possible to get a win rate of 50% or so.

I have 3 or 4 favourite ways of trading the ideas on this thread, in general im more comfortable taking trades and letting them run for big wins, im happy to take 3 or 4 losing trades on the trot to get that... To achieve that i only really trade the extremes... so im looking to enter around the ma's..

Not sure how far through the thread you are, but we have added a 50lwma to measure retraces, it acts as a great point to look for retraces to end... try it...im also a big fan of the trend change entry when price crosses over both ma's and closes

And the same test for GBPUSD in 2012 shows if going for 2:1 a win rate of about 40%. Not as profitable as EURUSD if the trades taken mechanically but still profitable.

Only 3 losing months out of the 12.

GBPUSD is a bit tricky to trade, as it likes to move quick, can be a double-edged sword.

Thanks for posting Cugir321! I loaded it up and will be watching the levels you've pointed out. Thanks again!

I'm intrigued. Can someone create an indicator with your rules?

Lemna

When I test, I choose two or three pairs with no redundancy, e.g. EU and AJ have a total of four currencies with no redundancy, and are good to test together. I would not test EU and GU together because both are half comprised of USD. The results would be skewed with a USD bias. Testing on more than two or three pairs is less meaningful than making sure each test has a 150 sample size minimum (200 is better). I like to determine if there is an edge using 1R as t/p and a set-and-forget approach to s/l. I am looking for 65% win rate, minimum, preferably. Above-average systems have win rates of 66%-75% using this 1R target. If this test does not achieve 65% win rate, I usually won't proceed further. This is my litmus test.

I do not waste my time testing the Tokyo session. I am a retailer or dealer in product, which I buy and sell, the product being currencies, and i therefore want my store to be open every day just like any other retailer. The problem with Tokyo is that it is inconsistent compared with London. Some days there is good movement and vol, and other days there isn't. And you don't know in advance what it will be. Because I operate a business, I want predictability to my income stream as much as possible. I don't get that with Tokyo. Better seen, but not touched. With London, maybe 3.5 or 4 days out of 5, you know there will be a strong trend. No other market in the world is this consistently strong.

So my testing is LO-LC, or sometimes FO-LC.

I loved GU compared with EU up until fall of 2011. At about that time, the euro crisis hit full swing, and GU began trading in a noisier fashion most of the time. EU surpassed it then in terms of vol which was occurring regularly with all the euro crisis developments. EU is more persistent in its movements, and more deliberate, and therefore more predictable than GU. This may explain why you see engulfs follow through better post-signal with EU. Someday GU will return to the way it was, but over the last 17 months it has not had the same attraction it once did for me. EU became so volatile (in a good way) that its ADR surpassed even EJ and GJ. More recently, with the major selloff in the yens and the higher range therewith, EJ and GJ have returned to their customary position as the most volatile of the big ten pairs. Here again, I much prefer EJ over GJ for M5/M1 because, thanks to the EUR component of it, EJ has the more deliberate and persistent tape, with the GBP in GJ bringing out more noise and chop in GJ.

Fyi, a 67% win rate targeting 1R equals an expectancy of 0.33R. A 50% win rate targeting 2R equals a 0.50R expectancy. So the latter is clearly more profitable, if all else -- including max dd, consecutive losers, etc., i.e. risk -- is equal (which it probably won't be). Ultimately you want to take your backtest results and use them to create a risk model to determine what R you will use to achieve your monthly or annual return objective.

Great post from someone who clearly know what he is talking about

It's been a interesting night.....Got 3 break evens that went 1:1. Three hit the sl. Just got about 2:1 on E/j's break up so I'm up about 7 pips. (I took the last E/J break up even though the price was below the 1hr 50 sma....the daily candle looked good to go up and it broke major S/R.

Am I correct to say the 50 linear sma angle direction is one of the more important things? I would have stayed out of a couple losses if I saw the 50's angle.

I think it's a little advantage having a 12 am new day with fxsol. I got a daily tf half candle from 5pm to 12 am.....

What an awesome run.....tried to get a buy stop in but missed it cause it ran....requoted me 3 times so sat out....everything certainly worked! Looks like a leg 2 retrace....I'll be ready if it does leg 3.

you liking that m5 cross trade Cugir?? im doing very nicely with it

Thanks for a great post, California, it has given me a couple of ideas.

I guess when you talk about Type 2 entries, you mean those that only qualify as Type 2 and not also as Type 1? Ie are not engulfing the previous open/close.

I absolutely love this system. Yep, the 5min is a wonderful entry with the other tf's...keeps the risk down.

I found a candle color indicator (for the daily candle) and a mtf ma arrow ind. that shows the 5, 1hr, daily info on the 5 min tf with little arrows. Awesome! when they all color up it's the big run. They're none intrusive and just sit in the corners of the 5min. All but the swing info on one chart.

there's no doubt this works well. thanks!

Hey cugir321

Can you post the indi please.

Thanks!

PGPB

How to Build a Risk Model

When you first become consistently profitable, you will want to begin to treat your trading as a business.

The purpose of a risk model is to determine what percent risk, i.e. "R," you should be using in order to achieve your monthly or annual return objective. Use either your trading results or backtest results of preferably 150 trades minimum to provide these four variables:

% of winning trades
% of losing trades
Avg winner
Avg loser

Expectancy = the average return of all your trades, i.e. what you can expect to make every time you roll the dice, on average.
Expectancy = (% of winning trades * avg winner) - (% of losing trades * avg loser).

Frequency = the number of trades produced by the system each month or year.

Risk model formula: Objective = Expectancy * R * Frequency

Example

Win rate: 70.3%, Avg win: 1R, Avg loser: 1R
Expectancy: 0.406R
Frequency: 4.4/day, or 88/month. To be conservative, use 80% of this figure, or 70.4.
Formula: Objective = Exp * R * Freq
If objective = 20%/month, then
0.2 = (0.406R) * 70.4
0.2/70.4 = 0.406R
0.0028 = 0.406R
0.0028/0.406 = R
R = 0.0070

Conclusion: In order to achieve a 20% return/month, you should risk 0.7% per trade using this trading system.

Thanks, California. Useful information (not that you have ever provided anything else!).

these indy's are taking the info you need to look at and putting them on the 5min tf.

The mn currency ind.....set everything but the 50 to 0.....set the tf's for 5, 1hr, daily.....the middle set of arrows is the 50 ema. I tried the sma but the expodential seemed to be more responsive....it's automatically set for expodential and doesn't seem to matter with the big run. 0 = sma, 1 = ema. I believe it's based on the arrow close so sometimes it's not dead on but....close enough.

Just bring up the multimeter....

Look at the two indy's when the big run comes. they match up like a slot machine.

You can see them on my last gif post.

I still have to look for the swings on the other tf's but when things are cooking I can concentrate on the 5min.

The # mtf ma avg will put the 1hr 50 sma on your 5 min tf if you want a more visual thing.

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You are v welcome, Lemna. The three entries are Engulfing, Type 2, and Commando (scalping). I would go back to Post 1 to read the rules for Type 2. In the last three weeks, an indi placing a dot for each Type 2 signal bar was posted by Lhdt. Any questions on this indi, please direct to Lhdt. You can search for it at the top of the screen. It is called LHDT_Primo.

@jls: My pleasure.

I think its time to take this m5 idea live..

Hi 60! Could you please show me where can i find the rules for new m5 idea? And thanks for this very interesting thread

you are looking for m5 to cross the ma's after a trending period, its a trend reversal trade.

You enter long at the break of the high of the signal bar and stops go the other side of the ma's or at the recent swing low/high..

you should trade them during london and NY,

you should use some higher tf filter... daily trend, S/r level etc etc...i'm sure many ideas would work..

tp is previous key s/r or a close back within the ma's... the idea is to let these run 4/1 r/r at least!