Advanced system #1 (Midnight setup)
Submitted by Edward Revy on April 29, 2007 - 08:11.
Ready to dedicate your midnight hour to Forex trading? This strategy can be your winner.
Trading strategy setup:
Currency pair: GBP/USD or any other.
Time frame: 1 day.
Indicators: None.
Trading Rules:
This system is based on the fact that most of the time you won't find same size candles for 2 consecutive days on a daily chart. What does this mean for us – only one thing: the price is moving steady either up or down with almost no price "noise" which is always present on smaller time frames.
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Hi Edward,
I know that we don't use any indicator for this strategy.
However, is there any indicator that we can use to predict trend reversal and the right exit point? Thanks.
David
Hi,
Oanda uses Eastern time, but will show you the hours based on time zone set on your PC. Use the 00:00am hour it gives you.
Regards,
Edward
Hi Edward,
I am just starting to use Oanda.
What time is the new daily candle formed in GMT+7?
Is it 11:00 AM?
Thanks
Does anyone have the pip movement triggers for other currency pairs? ie for cable you suggest 90, for eur/usd you suggest 55, etc., What about the rest?
thanks,
We know that a doji candle signals of a possible trend reversal. At your own risk - place only one order in the direction of anticipated trend change + only if a doji > 90 pips.
Regards,
Edward
if a doji happens, we closed all positions right,but do we set a new entry after a doji happens?
This is a very common sense strategy and is good for all experience levels. I was using a strategy very similar to this, but I was not taking profit at +100, I was only moving stops and only exiting when a stop was hit and I often ended up with small gains and sometimes losses. I also did not have the 90 pip rule. Both of these rules seem to reduce risk.
In your strategy the worse case scenario of when the next day's candle is longer than the previous day. In this case both opens and stops will be executed resulting in a fairly large loss, however it looks to me that the case I just described does not happen all that often, especially if the previous day's candle is greater than 90 pips.
I think with your risk reduction rules of only entering when the current day is greater than 90 pips and locking profit at +100 you've got a winning strategy here.
Congratulations and thank you for sharing.
Absolutely. You do not have to stick to GMT or EST or any other time, unless you want to. Simply use your own local midnight candle (or the one your trading platform provides in case it works with other time zone settings).
Happy Forex trading!
Edward
Hello i leave in Italy and 00:00 GMT is the 02:00 am, can i try works at 22:00 GMT instead of 00:00 GMT since the maximums and the lower generally are already established?
Thanks
Thank you for your question.
You have a very strong point about GBP/USD daily range average which has been quite low lately. I agree with you about using the most recent data for trading.
In cases like this I would suggest sticking as much as possible to 90 pips rule for all conservative trades. For others I'd recommend to lower the line to 70 pips. I wouldn't suggest going any lower though.
Nice observation, Darkside!
Edward.
Thank you,
Normally, I don't add up to my position.
But if I did, I would be considering adding another position only when my current position's Stop Loss becomes a Profit Stop, e.g. moves higher above the break even point and is already guarding my profits. If my Stop order is still guarding my losses (is below the break even point) I don't want to add up any more trades.
Regards,
Edward
What about this: our trade becomes profitable but not enough to take profit so we wait. In the meantime the day’s candle is long enough to signal a possibility of entering the market (in the same direction) tomorrow. Do you add up to a position which you are already holding? What is your suggestion?
Hi Tommy,
With your numbers:
buy stop order is 245.55 + 5 = 245.60
sell stop order is 244.55 - 5 = 244.50
All the best in your trading!
Edward.
IT'S ME AGAIN EDWARD..
I AM STILL CONFUSED WITH THE 'MIDNIGHT SET-UP'
FOR EXAMPLE...THE PREVIOUS BAR HIGH IS 245.55 AND THE BAR LOW IS 244.55...PLEASE CORRECT ME IF I AM WRONG WHEN SETTING UP.
'BUY STOP IS 245.55 PLUS 5 PIPS MAKES IT 245.60.HOPEFULLY THIS PART I GOT IT RIGHT.
NOW, 'SELL STOP IS PREVIOUS HIGH MINUS 5 PIPS? WHICH IS 245.55 MINUS 5 PIPS = 245.50? OR PREVIOUS LOW MINUS 5 PIPS... 244.55 MINUS 5 PIPS =244.50 PLEASE HELP...THIS IS THE ONLY PART I AM STILL BAFFLED.
THANK YOU IN ADVANCE AND LONGING FOR YOUR ANSWER.
HAVE AN EXCELLENT DAY.
TOMMY.
Go with EST time (the time your daily chart gives you). Thanks.
Edward.
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