A simple but promising strategy

It was a pleasure to give my opinion ... when the pair breaks the minimum or maximum of the previous day and following the color of the previous D1 ... I do not think it's okay ... but lottery success to all ... but those who have the time ... do the tests in the demo .... it was a pleasure to colaborar.Sucesso everyone.

Hello everybody,

I would like to tell you something about this strategy(more a system, because there is no MM included etc.) I am a student 19 years old, I study economics. I traded demo since my 16th and real when I was 18 years old. I saw alot strategy's and systems, made my own out of others and after alot tweaking it was finally done. It made and still does make a steady x% monthly. Everyday I had to do the same thing preparation mental, read somewhat about the news upcomming (I trade technical); this got me bored. I still liked trading alot don't get me wrong.

Then I read this thread about a month ago, http://www.forexfactory.com/showthre...444377&page=79 from a mathematical standpoint it is fairly easy, but in practice it is really hard as always often with mathematical things. I really love to make things work so I began to search for a basic working system for this, made my own out of others (what I really recommend for beginners after they read everything at Babypips).

Now I am going to tell you why I am posting this here. My system for Rags to Riches is almost the same as what OP posted.

The rules:
- Trade on the hourly on major pairs, I only traded EUR/USD
- Trade @ the second candle after the opening of the London session (so you don't get disturbed by opening breakouts).
-Close the trade @ opening level of the candle
-Open the trade @ closing level of the candle
- Buy when the candle is Bullish
- Sell when the candle is Bearish
- There is no TP level
- SL is yesterdays high or low(depends on if you are selling or buying ofcourse).

Something more about the SL. I have a EA that closes the trade and not a set in stone SL incase the broker stop hunts (what I think they don't do but you never know). The EA closes the trade when a candle closes above/below yesterdays high/low. So it doesn't close the trade when it spikes in the range and retraces.

Because it is a really risky system you can start with a really low bank. I started with 100$(one trade is the whole bank), almost everyone in the trading business can afford to lose that and if you can't you shouldn't trade at all. I traded with a super high leverage 1:2000. This is not needed but I did this to see how I would react. You need to have nerves of steel if you want to trade with 1:2000. Because this is over leveraged I can't just use the normal SL rule. My DD must be 50% in order to work with 1:2000 so I can only afford to lose 34 pips (5 digit broker, spread is 5-8 pips, commission is more then avarage when you make winning trade but zero when you make a losing trade so thats really nice!) I said to myself to use this rule after I got 500% growth because I thought I would never make it.

The results:
From 17-June till Today Leverage 1:2000 Start with 100$

Sell Day 1:
Open 1.35619
Close 1.35531 Gain: 88 Pips
88 Pips x (0.00001/1.35531)x(100$ x 2000) = 129$ +100$ = 229$

Buy Day 2:
Open 1.35570
Close 1.36375 Gain: 805 Pips
805 Pips x (0.00001/1.36375)x(229$ x 2000) = 2703$ +229$ = 2,932$

Sell Day 3:
Open 1.36349
Close 1.36103 Gain: 246 Pips
246Pips x (0.00001/1.36103)x(2932$ x 2000) = 10,598$ +2703$ = 13,530$

Sell Day 4:
Open 1.36023
Close 1.35803 Gain: 220 Pips
220Pips x (0.00001/1.35803)x(13,530$ x 2000) = 43,837$ +10,598$ = 54,435$

Sell Day 5:
Open 1.35764
Close 1.35798 Gain: -34Pips
-34Pips x (0.00001/1.35798)x(54,435$ x 2000) = -27,257$ +544,35$ = 27,178$

Sell Day 6:
Open 1.36197
Close 1.36088 Gain: 109 Pips
109Pips x (0.00001/1.36088)x(27,178$ x 2000) = 43,536$ +27,178$ = 70,714$

Buy Day 7:
Open 1.36028
Close 1.36230 Gain: 202 Pips
202Pips x (0.00001/1.36230)x(70,714$ x 2000) = 209,707$ +707,14$ = 280,421$

Sell Day 8:
Open 1.36138
Close 1.36172 Gain: -34 Pips
-34Pips x (0.00001/1.36172)x(280,421$ x 2000) = -140,210$ +280,421$ = 140,210$

Sell Day 9:
Open 1.36115
Close 1.36149 Gain: -34 Pips
-34Pips x (0.00001/1.36149 )x(280,421$ x 2000) = -140,210$ +280,421$ = 140,210$

Sell Day 10:
Open 1.36527
Close 1.36561 Gain: -34 Pips
-34Pips x (0.00001/1.36561)x(140,210$ x 2000) = -70,105$ +140,210$ = 70,105$

Buy Day 11:
Open 1.36886
Close 1.36852 Gain: -34Pips
-34Pips x (0.00001/1.36852)x(70,105$ x 2000) = -35,052$ +70,105$ = 35,052$

Buy Day 12:
Open 1.36555
Close 1.36521 Gain: -34 Pips
-34Pips x (0.00001/1.36521)x(35,052$ x 2000) = -17,526$ +35,052$ = 17,526$

Sell Day 13:
Open 1.36515
Close 1.35881 Gain: 634 Pips
634Pips x (0.00001/1.35881)x(17,526$ x 2000) = 163,547$ +17,526$ = 181,073$

Buy Day 14:
Open 1.35879
Close 1.35981 Gain: 102 Pips
102Pips x (0.00001/1.35981)x(181,073$ x 2000) = 271,847$ +181,073$ = 452,920$

Sell Day 15:
Open 1.35953
Close 1.36987 Gain: -34 Pips
-34Pips x (0.00001/1.36987)x(452,920$ x 2000) = -226,460$ +452,920$ = 226,460$

Sell Day 16:
Open 1.35928
Close 1.35962 Gain: -34 Pips
-34Pips x (0.00001/1.35962)x(226,460$ x 2000) = -113,230$ +226,460$ = 113,230$

Buy Day 17:
Open 1.36123
Close 1.36337 Gain: 214 Pips
214Pips x (0.00001/1.36337)x(113,230$ x 2000) = 355,460$ +113,230$ = 468,690$

Sell Day 18:
Open 1.36237
Close 1.36127 Gain: 110 Pips
110Pips x (0.00001/1.36127)x(468,690$ x 2000) = 757,467$ +468690$ = 1,226,157$

Sell Day 19:
Open 1.36039
Close 1.36073 Gain: -34 Pips
-34Pips x (0.00001/1.36073)x(1,226,157$ x 2000) = -613,078$ +1,226,157$$ = 613,078$

Sell Day 20:
Open 1.36210
Close 1.36040 Gain: 170 Pips
170Pips x (0.00001/1.36040)x(613,078$ x 2000) = 1,532,244$ +613,078$ = 2,145,322$

Total Gain: 2594 Pips
Growth: 429,060%

(Today)
Sell Day 21: Open 1.35968
Close xxxxxxxx (Probably a really big gain again)

Sorry for clutter based out of Excel.

The conclusion:
I did this with real money because it is only 100$. The second day my nerves were tested to see almost a margin call is not fun after that I was full of joy the first days, ofcourse, but the 5th day I shit my pants. To see such big DD(I knew it before I started but still....) and especially with large sums of money its so painfull. The world stops for a moment. So my first reaction that day is to pull all the money of it. That was still a big deal 27k. I still continued it on paper to see if I was lucky, to see the pros and cons etc. It was a big gamble. I wouldn't recommend it but you will learn a big lesson, to see how you react and how emotional driven you are in such situations. Then it is really worth the 100$.

What also is worth mentioning is that a system is not everything but a stategy is. As you can see the entries are almost the same as a coin flip. But what you can do with good SL and TP, with support and ressistance(yesterdays high/low). Cut your losers and let your winners run. Use a leverage what you can handle, good MM etc etc etc.

Maybe ill start an account on a broker with lower leverage like 1:200 and that allows a Forex Factory Explorer

Green pipping to everyone

if you will begin a new challenge , create your own journal

and yes, power of money management is so often forgotten ^^

good luck for your next try ! ( i will perhaps try something similar but picking my trades according to the best trades of my normal strategy )

Hello everyone,

Sell Day 21:
Open 1.35968
Close 1.35426 Gain: 542 Pips
542Pips x (0.00001/1.35426)x(2,145,322$ x 2000) = 17,171,954$ +2,145,322$ = 19,317,276$

As you can see with this high leverage your risk is lower then your reward. But because you can only lose 34 pips, (3.4 Pips for 4 digit-broker) plus the spread it is almost impossible. But if you go 10 factors lower, 1:200, your SL will be arround 340 pips (34 Pips for 4 digit-broker) and you can search for yesterdays high/lows etc. Because I think the market is only built on physiological interactions, its all about the mind of people who buy and sell. So resistance and support are key levels thats why yesterdays high/low is so important for this strategy. I will give you an example at sell day 5 where it went wrong.

The results realistic point of view:
From 17-June till Today Leverage 1:200 Start with 100$

Sell Day 1:
Open 1.35619
Close 1.35531 Gain: 88 Pips
88 Pips x (0.00001/1.35531)x(100$ x 200) = 13$ +100$ = 113$

Buy Day 2:
Open 1.35570
Close 1.36375 Gain: 805 Pips
805 Pips x (0.00001/1.36375)x(113$ x 200) = 134$ +113$ = 247$

Sell Day 3:
Open 1.36349
Close 1.36103 Gain: 246 Pips
246Pips x (0.00001/1.36103)x(247$ x 200) = 89$ +247$ = 336$

Sell Day 4:
Open 1.36023
Close 1.35803 Gain: 220 Pips
220Pips x (0.00001/1.35803)x(336$ x 200) = 109$ +336$ = 445$


Why SL rule works with -340 Pips

Sell Day 5 Example:
Open 1.35764
Close 1.36104 Gain: -340Pips
-340Pips x (0.00001/1.36104)x(445$ x 200) = -222$ +445$ = 223$

Total Gain: 1359 Pips
Growth: 223% (44,6% a day average)

You still have a nice 50% DD but the problem is that you won't gain over 50% a day. So if you won't gain more then 50% a day you are done after 7 losing trades in a row (then you are back to 1% of your capital before the 7 losses). Maybe you think 7 losses in a row is almost impossible to occur but thats not true. Before I traded I was really into the casino game roulette, hence my avatar, because you work with alot of statistics and I love that(never gambled real with roulette). All of you probably know the Martingale strategy and that in the long run it always fails. Read about it here http://en.wikipedia.org/wiki/Martingale_(betting_system) Because the entry is like a coin flip you can easily use http://en.wikipedia.org/wiki/Gambler's_fallacy:
http://upload.wikimedia.org/math/b/2...2d1c8dd3df.png.

The Gambler's Fallacy means that when people lose like 10 times in a row and then they think next time I will and must win, but with the coin flip the chances are still 50%.

One trade will have 50% chance of winning or losing the next day the new trade will have the same winning chance but 2 losing trades have a 25% chance to occur. What most people think is that after alot of loses the next must and will win but this is wrong as stated above. Losing 7 times in a row has a 99.9% chance to occur in 500 trades. That can be in the last 100 trades when 1% is still a big chunk of money but this can ofcourse also occur in the first 100 trades when 1% of the capital is not even a penny.

In reality it is different because you will use some real market analysing and not a random set in stone SL. You will work with support and ressistance, yesterdays high/low and that is where al the money comes from. A not very difficult to understand procedure and practical to use. But when the support or resistance levels are out of range of the 340/34 pips unfortunately you need a set in stone random SL but this doesn't occur that much.

Sell Day 5 Reality(See screenshot):
Open 1.35765
Close 1.36100 Gain: -335Pips
-335Pips x (0.00001/1.36100)x(445$ x 200) = -219$ +445$ = 226$

DD of 49% and that is below 50% and thats what we need.

This is not a really good example but I hope you get the point. As this is still not a really realistic point of view because we have 5 days here and you can't base anything on that. I researched last 5 months and my conclusion is that:

Total trades: 114

We got 61 trades won. 53.5%


We got 53 trades lost. 46.5%

- We got 22 trades stopped out by 340 SL. 41.5%
- We got 31 trades stopped out by key levels. 58.5%

At last I want to tell you that how more trades you will make how better you get to the 50% ratio. So as you can eliminate the 50% losing trades by using technical market analysis, the support and resistance levels etc. You are a winner because if you think in different way, the eliminated loses that are not a 50% DD but 40% DD are your winning trades. Think about that.

Green pipping to everyone

This is why people call us gamblers.

If it were this easy everyone would be a day trader.

You probably didn't understand it.... it's not that hard but I get your point.

You are risking your half account people don't seem to like that. I don't really care so much if you look it this way. Let's say you made 500$ out of 100$ with this strategy, take that 100$ of the account and what ever happends you never lose money.

Don't expect risking 1% of your account will make you rich the short way. Risk makes the big returns.

Green pipping to everyone

... and the big losses ... but that's the deal.

Exactly and if u hold the losses under 50% DD your a winner.

1) If D1 candle close Blue - Leave a pending order Buy Stop 03 pips above the high of the day. Tp 10 pips and 20 pips stop
2) If D1 candle close Red - Let ums Sell Stop pending order 03 pips below the low of the day. Tp 10 pips and 20 pips stop
Entries on 17/07
AUD/USD +10
EUR/AUD +10
EUR/JPY +10
GBP/AUD +10
GBP/JPY+10
GBP/USD +10
USD/JPY +10
NZD/USD -20

+ 50 PIPS
USD / CAD and GBP / CHF NOT OPENED EUR / USD OPEN - 07 PIPS*******watch the images

While it is tempting to think of this as compared to the random coin toss, it really isn't.
Market trends will influence what the next turn of events will probably be.
Even in a random coin toss scenario, you can still hack the system to some degree.
Look over how the "Penny Game" works for predicting a series of 3 coin tosses.
Without going into the details of how that works, in this system it would still be beneficial to do a little more analysis of previous candles.
Look for a trend pullback and then go for the trend.

Not much so. There is a pattern which can be verified by backtesting. Not mere fluke

Is random, sure.

Many say that the market is random when I posted the pictures was to show that there's nothing there aleatório.Vamos!
A couple is going in a certain direction. Up, up, up ... on the 4th day D1 red candle closes ... is a sign that there are sellers, for some reason ... just ... put the pending order sell stop below the low of the day which closed red because? Because if the direction continue, surely break the previous day's low. Put your image in D1, in any order to see how easy it is to work only with a candlestick chart and nothing else. Look ... Buy blue candle stop 03 pips above the high, red candle sell stop below the low ... Look at the past ... easy and profitable system ... Do your rules in the best way ... I made mine. Stop 20 pips and 10 pips TP ... For the most conservative place TS of 05 pips. Often the pending order is not triggered .. but when it is triggered, the vast majority of times is vitória.Um Weekend much peace to all.

I would like to see your chart to understand better. In any case, if you think it works and feel confident, you will not hesitate to implement, wealth called your door.

That was based on the obvious of a trend being dominated primarily with one type of candle.
Up-trends will necessarily show more upward movement (either number of candles or total movement) to qualify as an up-trend.
Visually reviewing a chart will show this to be true, so the simple system has the merit of following the more frequent candles.
Now, as far as real trading would go , , ,The system definitely needs some improvement.
Why place trades without a stop-loss? (It's my money and I want to lose it all NOW!) :-)
Why not just place the next trade according to the trend? Kind of obvious.
Why close a trade that is still in profit instead of stacking another with it? A good trend will last for a month, several months, longer.
Looking at candles is like focusing in on the leaves, trying to figure out what a tree looks like. Step out, way, way out and enjoy the forest.
Stack the trades and let them run. Consider the Eur/Usd since 8 May, it was nearly up to 1.4, now we are looking at 1.35 heading toward 1.33 (Maybe)
What if a trader had stacked sell trades from time to time, only closing them a month later when the price spiked down to almost 1.35?
Then followed the uptrend from 11 June in the same manner until about 3 July when support was broken?
Well, that's the way I look at it anyway. Yes, I tend toward position trading as the long term trend is a long term friend.
Etc.

Many thanks Patron ... time is money ... stay in front of the computer all day, we guarantee you will have, which will make 1%? Not forgetting that the 1% profit every day in 03 years gives us 01 million. What is the value of your time to stay with family? which the value of your time to be with friends? What is the value of your time for health care? If you operate Forex full time and are taking profit ... congratulations! I hope you're earning enough to compensate the family and stay away from things that would make money. but if you are one who has not yet found a method to operate this way ... Run ... End of the day D1 Red candle closed pending order Sell stop 03 pips below the minimum ... blue candle D1 closed pending order Buy Stop 03 pips above the high ... Working with the following pairs: EUR / USD, GBP / USD, USD / CHF, USD / CAD, AUD / USD, NZD / USD, USD / JPY, EUR / JPY, GBP / JPY, EUR / AUD, GBP / AUD pair and GBP/CHF...12. Do the tests, I put 20 pips SL and 10 pips TP ... for the most conservative place 05 pips Ts ... A big hug to everyone. See the picture I'll let the pair GBP / USD downtown Thursday was 1.7084 ... put armed sell stop order at 1.7080 ... 1.7070 + 10 pips. View with other peers as closed D1 and see the maximum or minimum if were broken on the next day.

Outstanding entries for 21/07. 02 entries made ​​for each pair being:

1st Entry 20 pips SL and 10 pips TP
2nd Entry SL 20 pips, 10 pips 05 pips of Tp and TS.

Hi Robinho,

In my opinion sitting in a massive drawdown is gambling. At least you know where you are going with your method suffice to say as long as your winnings overshadow your losses. May I ask what your win rate percentage is?..... It is a well known fact that sitting in front of your computer all day chasing trades can lead to over trading and losing trades at that, let alone your family/ social life that can take a knock.

This is certainly a method that is well worth exploring on demo for the time being.......

Thanks for sharing. Kind regards

Good morning Leon 14 ... I left the Pending orders of 02 different forms, one with and one without TS TS in order to observe the best method. This week will be putting the results. A big hug.

Win rate doesn't mean nothing without the Risk/Reward ratio.

You can have a 99% win rate but be a loser ... and vice versa you can have a 1% win rate and be profitable.

Of course you must have a great mental to afford the 2nd one !