Forex Strength Predict System
This system is my own creation. It is a very simple idea, but not necessarily easy to get right. As you will see it takes plenty of forex trading experience and screen time to make it profitable. Only one trade is entered per day and is taken usually 1 to 2 hours after London Open. The purpose of this journal is to test this system on a demo account before going live. You are most welcome to participate in the testing process- post charts, trades, ask questions etc.
Step 1 - Make a spreadsheet
Put the following Currency Pairs in the first Column (Column A):
EURUSD, GBPUSD, USDCAD, AUDUSD, NZDUSD, EURGBP, EURCAD, EURAUD, EURNZD, GBPCAD, GBPAUD, GBPNZD, AUDCAD, NZDCAD, AUDNZD
In Column B you will put either the number 1 or the number -1 depending on your prediction (1 prediction is Bullish, -1 prediction is Bearish)
In the top Row (Row 1) starting from Column C put the following Currencies:
USD, EUR, GBP, CAD, AUD, NZD
Underneath USD (C2) type the equation =SUM(B2*-1,B3*-1,B4,B5*-1,B6*-1)
This equation adds up all the currency pairs with USD and gives you a score. (You times the number by -1 if the USD currency is second on the pair)
Underneath EUR (D2) type the equation =SUM(B2,B7,B8,B9,B10)
Underneath GBP (E2) type the equation =SUM(B3,B7*-1,B11,B12,B13)
Underneath CAD (F2) type the equation =SUM(B4,B8,B11,B14,B15)*-1
Underneath AUD (G2) type the equation =SUM(B5,B9*-1,B12*-1,B14,B16)
Underneath NZD (H2) type the equation =SUM(B6,B10*-1,B13*-1,B15,B16*-1)
Step 2 - Predict Each Currency Pair (Bullish type 1, Bearish type -1)
This is where you need experience and screen time to make a correct prediction.
You need to make a prediction on each of the 15 currency pairs.
I use Daily Charts to do this (very occasionally 1 hour chart to confirm)
Use whatever knowledge you have learned to make your prediction- this is the most difficult part of the system
Ask yourself "will the current Daily candle direction continue or reverse?"
Start with EURUSD and continue down the list. Remember that currencies are all correlated to each other. I don't have space to explain this in detail here but am happy to discuss in later posts.
Step 3 - Buy the Currency with the Predictive Score of 5 vs the Currency with the Predictive Score of -5
For example if USD has a score of 5, this means that you predict USD will be Bullish against every other currency. If NZD has a score of -5, this means you predict NZD will be bearish against every other currency. This gives you a signal to Sell NZDUSD
Step 4 - Open the Chart of your Chosen Pair and Select a Target
I use natural support/resistance areas as profit targets- again you need screen time to identify these areas. I aim for the closest support/resistance area to current price action. Stoploss is placed at a specified Risk/Reward Ratio.
Step 5 - Enter Trade using your own money management system
Setting Lot size, Stop Loss etc is up to you. Again I don't have space to address here, but am happy to discuss in subsequent posts. Remember if your predictions are mostly right, you will have very little drawdown.
Step 6 - Analyze results
Keep a journal of your results and your reasons for picking a currency pair direction.
This system is my own creation. It is a very simple idea, but not necessarily easy to get right. As you will see it takes plenty of forex trading experience and screen time to make it profitable. Only one trade is entered per day and is taken usually 1 to 2 hours after London Open. The purpose of this journal is to test this system on a demo account before going live. You are most welcome to participate in the testing process- post charts, trades, ask questions etc.
Step 1 - Make a spreadsheet
Put the following Currency Pairs in the first Column (Column A):
EURUSD, GBPUSD, USDCAD, AUDUSD, NZDUSD, EURGBP, EURCAD, EURAUD, EURNZD, GBPCAD, GBPAUD, GBPNZD, AUDCAD, NZDCAD, AUDNZD
In Column B you will put either the number 1 or the number -1 depending on your prediction (1 prediction is Bullish, -1 prediction is Bearish)
In the top Row (Row 1) starting from Column C put the following Currencies:
USD, EUR, GBP, CAD, AUD, NZD
Underneath USD (C2) type the equation =SUM(B2*-1,B3*-1,B4,B5*-1,B6*-1)
This equation adds up all the currency pairs with USD and gives you a score. (You times the number by -1 if the USD currency is second on the pair)
Underneath EUR (D2) type the equation =SUM(B2,B7,B8,B9,B10)
Underneath GBP (E2) type the equation =SUM(B3,B7*-1,B11,B12,B13)
Underneath CAD (F2) type the equation =SUM(B4,B8,B11,B14,B15)*-1
Underneath AUD (G2) type the equation =SUM(B5,B9*-1,B12*-1,B14,B16)
Underneath NZD (H2) type the equation =SUM(B6,B10*-1,B13*-1,B15,B16*-1)
Step 2 - Predict Each Currency Pair (Bullish type 1, Bearish type -1)
This is where you need experience and screen time to make a correct prediction.
You need to make a prediction on each of the 15 currency pairs.
I use Daily Charts to do this (very occasionally 1 hour chart to confirm)
Use whatever knowledge you have learned to make your prediction- this is the most difficult part of the system
Ask yourself "will the current Daily candle direction continue or reverse?"
Start with EURUSD and continue down the list. Remember that currencies are all correlated to each other. I don't have space to explain this in detail here but am happy to discuss in later posts.
Step 3 - Buy the Currency with the Predictive Score of 5 vs the Currency with the Predictive Score of -5
For example if USD has a score of 5, this means that you predict USD will be Bullish against every other currency. If NZD has a score of -5, this means you predict NZD will be bearish against every other currency. This gives you a signal to Sell NZDUSD
Step 4 - Open the Chart of your Chosen Pair and Select a Target
I use natural support/resistance areas as profit targets- again you need screen time to identify these areas. I aim for the closest support/resistance area to current price action. Stoploss is placed at a specified Risk/Reward Ratio.
Step 5 - Enter Trade using your own money management system
Setting Lot size, Stop Loss etc is up to you. Again I don't have space to address here, but am happy to discuss in subsequent posts. Remember if your predictions are mostly right, you will have very little drawdown.
Step 6 - Analyze results
Keep a journal of your results and your reasons for picking a currency pair direction.
