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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Technically, yes, it is supposed to be 200 pips then.
That's your initial stop. Everything else would depend on your risk tolerance level.
If a stop is distant, additional market analysis may help.
Answer these questions: what are nearest support/resistance levels, where are monthly pivot levels located, where are Fibonacci levels, what trend lines do you see, and finally what id the Daily average range for this particular currency pair?
This additional information should help identifying best logical place for the stop. The rule is: if you see few studies merging at certain price levels (for example, pivot level may merge with one of the Fibonacci retracement levels, there also can be main trend line support/resistance nearby) - this conditions will point out at the area where price is expected to stop and then bounce back or break through. That's the place to have your stop around.
Each trading situation will be different. There are no fixed rules. Without such additional chart analysis, the simplest solution would be to set a fixed stop, for example outside the Daily average range or even simpler - 100 pips away (least preferred but undoubtedly the simplest way).
Regards,
Edward
Hello Edward,
i really have to thank you so much for your site of inestimable value.
i was actually in the wood as regards fx trading until i discovered your wonderful ideas.
i sure will stick to you like a salamander since your site is true route to success in forex trading.
presently i am using the parabolic SAR+ADX system and it is quite amazing.
i pray God to bless u and your wonderful wife.
kaykay
nigeria
Hi, I have heard about a similar concept before; key difference though is that a trade should not be open if the variance of last days high and low EXCEEDS 80 pips; you state that the variance should not BE LESS then 90 pips.....
Thanks
Arjan
Hi,
Thanks for your comment.
My position regarding this is that if variance of last high and low is less than 90 pips risks for orders to be open in both directions followed by stops being hit increases, while with candles taller than 90 pips it is less likely to happen; plus tall candles send a message that market is certain about trend direction.
Regards,
Edward
Hi Edward!!
I have a small doubt here....how do we apply this strategy for the last candle of the week? Do we enter trades according to its high and low or should we consider the sunday candle. Thank you.
If to use Sunday candle, we will never trade Mondays, since Sunday candle will always be less than 90 pips required by strategy rules.
In fact, I personally don't like trading on Monday, since the risk to get a losing trade is higher as market makes its mind about its new week trend.
But, if we don't want to miss Monday trading we always use Friday candle to evaluate possible setups for Monday.
Regards,
Edward
hi Edward,
I think is a great system to trade .i wanna know y in the example u did not trade the seventh candle after profit taking?any particular reasons??
Thanks again
Pipsrider
Hi Pipsider,
We did trade the 7th candle and locked a good profit there.
There is a description of it in the original trading rules.
Could it be we are talking about different candlesticks? Please let me know. You may also send me a screen shot at
Regards,
Edward