Revert to the Mean

This is another strategy for the Day chart.
5 sma shift 2... cross 5 lwma
stop loss 2 ATR, trailing 2 ATR
it's a stop and reverse.
So usually the close comes with a cross in the opposite direction.
Am trading it on the USDCHF
The trailing stops is at least 2 ATR
But the initial stop may not be that much.
Maybe 100 pips.
This needs only be serviced once day at the start of the new trading day.

This day candle time frame is looking good.
There may not be any signals at all for a few months in a pair but when the signal is there it is good. Worth waiting for.
There are several pairs to trade so there should be trades going on pretty much most of the time.
Only need to check the progress at the end of the trading day and make any adjustments when the new candle forms.
such as moving trailing stop. which will be just under the low of the previous day's candle after there is a large candle.
If it cannot go at least 20 or 30 pips before falling back outside the band again then wait for another close inside and enter double position size if it is significantly far away from the original position. Entering double in a trade that is going against me is an extreme measure reserved for emergencies.
since this works nicely on any pair there should be at least a few pairs with signals in any month.
the reasoning is that a strong trend no matter how strong it is will not stay outside the 400 bb for very long on the day candles. It is such an extreme.
I'll keep researching how this works on different pairs.

Opened this short
position size calculated for .5% with stop 100
tp is unknown, since it will be a trailing stop just above the previous day's candle after a long candle.
It is set for 120 just in case there is a sudden move.
Although the stop is set, this strategy doesn't work like that.
If it should take another run up I would wait for it to close below the band again and enter double short.
so the position size is calculated for 100 pip stop but really there is no stop at this point in the trade.

It is always the same thing. Two different market conditions..
trending and consolidating. If there was a way to discern when these conditions were beginning they could be traded very successfully with practically any strategy.
Uing the 400 bb it is possible to maximize in either cndtion. But it has to be traded differently.
For consolidations the entery is when prices close inside the bands, for trends it is when the prices close ourtside the bands.
What I had done originally was to trade as if it were a consolidation begining and if it broke pout again enter again with 2 times the position sixe so that it would half the distance to go and to escape with either a break even or if it actually reverse a good profit. Very risky... because if it is actuallyt he beinning of a strong trend and it doesn;t reverse significanntly I am stuck in it for who knows how long before it pulls back again. Some pairs do that. Like USDJPY... It never even looked back. so to not a have limit on losses is not going to work.
Then I decided well forget trading the consolidations let me just catch a trend. But there was no set way to know if it was actually going to break out in and run or it was going to fall back. the stop was at the 200 ma. and the position size was 3. positions for .5% each. Big loss compared to gains on a run. which would by closing each of the three positions as it progressed in the trend to lock in gains. But just one loss meant all three were stopped out significantly. So it would take several good trades to make up for the loss. And I found it was not possible for me to tell when it was starting to trend and when it was going into consolidation and pullback or even reverse.
But what else is new? These are actual questions traders are all faced with.
Now I am thinking... I have way to trade both market conditions successfully. I just need to know which market condition we are heading into.
I'll spend some time today looking at a stop and reverse strategy using the 400 bb.
A close inside the band means trade like a consolidation but exit if it closes outside the band... take the loss... It shouldn't be very much.. enter in the opposite direction and trade it as if it were going into a trending mode and close it if drops back and closes inside the band again. This can get wearisome and expensive. So I want to take closer look at how to do this. Maybe using limit orders... That's probably which this consolidation goes for a while, traders are taking positions and getting stopped out and then entering again in the opposite direction and getting stopped out.
But it could be a lot safer than trying to use a Martingale.

Hi jiva! Welcome back! My personal market experience is that the market is always trending, and it is always ranging. So RTM will work given a long enough timeframe. The trick is of course that you trade small enough to withstand a volatility expansion.

Hi. Been a while.
The mean also moves. The whole thing is elastic. Like a rubber band... How far will it stretch before it snaps back?
Like walking on a sidewalk and the sidewalk is moving too.

Haven't had a chance to research the stop and reverse plan. But entered with tiny position to catch a reversal on EURUSD
The close was 2 pips above the lower band.
There's hope for the USDCHF trade.

researching the stop and reverse.
I like USDMXN. Have had some good trades with it.
there were two small losses.
first it closed inside so I entered for a revert to the mean,
Than it fell back and closed outside so I closed for a small loss 33 pips and entered for a trend run.
Then it closed back inside again. I closed the trend run for a small loss 45 pips and then it took off to revert to the mean and beyond.
With one position it stopped out as the stop moved up under the low of the previous candle. Nice 142 pips..
If I open two positions One can wait at just above entry point. the other one can have a trailing stop just under the previous day;s candle.
After the first swing low a stop can be placed just under the low of the swing low. This is easier to see on a line chart.
and moved each time there is a swing low.
As it approaches the 200sma let the stop stay back as it will most likely do some consolidating.
Will see how this plays out on other trades.

Later will have some time.. Want to see how the popular moving averages influence the price action for staying in a trending trade.
Entered long EURUSD and it has fallen back below the band... So it would be small loss tonight when the new candle forms and enter short.
Although the stop is set for 155 pips below support it is highly unlikely stops set like that would ever be hit. The close would always be for a lot less until; we can catch the trend.
USDCHF is hanging in there for now.
They both seem to be forming head and shoulders...

Was wondering how it would work on a long trend.
USDJPY is famous for long trends.
Works great. This would have taken a year to complete. Steady gains... averaging about 190 pips/month.

This move on the USDCAD was way less than ideal
After all was totaled it was 79 pips net. Probably nothing since there is roll over and the trade took 7 months to complete
Once in a trade have to ride it out. 7 months of that would have been a bit much....

Gearing up for such long time frames would have to be done. Nerves of steel. Patience of a saint needed.
Very small position size needed.

Moving averages don't tell me anything during a trend. At least anything I feel I can use.
But I want to look at trading the signals a little differently.
Instead of opening three separate positions initially and closing them as the trend progresses.
Open small positions and add to them as the trade progress.
That way if the trade goes against me the loss is very small.

Here's a wild one. I like it. I like it.
At some point prices will go to the opposite band...
Would have to use very very small position sizes. and it is necessary to take every signal.
1 minute
Only enter very early in the day unless I want to be monitoring the thing all night

This is great. No muss no fuss. Forget trailing stops. Who cares about volatility...
Just use very small position sizes..
London for sure... NY maybe too late in the day. don't want to go over night with this.
London only. NY can drag out to overnight.
If signals are close together skip them.
Wait for signals that are far away.

I might want to seriously consider not trading on Fed day. I can do very well with this strategy without that day. Too crazy.

This thing is incredible.
One thing is when the first signal is there to enter, but if there should be another signal right near it don't take it. Wait for a bit of a run first.
Also if there had been a big run and the bands are starting to narrow which means the first entry could be a big even if subsequent entries are good, most likely it will start to form a top which means it could close inside and outside the band several times.. All of those should be taken. Within reason...
Only trade from London open. This took 6 hours.
Price will always go from one outer band to the other. eventually....

Can exit when prices get close to band.
This happens a lot. Almost gets to the band than falls back and menders for hours until it finally does reach the band, But the band in the meantime has tightened.
So that first big pop to almost the band is fine for an exit.
Here The trade could have been closed on 3 hours for more...
rather than waiting for 7 hours to close for less.

Good this is what I wanted. To see what a bad trade looks like.
The trade from hell.
the second position should not have been taken. for -42
it was too close to the opening position.
that would have reduced the loss from -62 to -20.. tolerable.
When the prices stall out the bands contract so yes they will reach the opposite band but the band will have moved much closer to the prices.
Why it is necessary not to open positions close to the first one opened. Wait until the prices move a decent distance away.