Advanced system #1 (Midnight setup)

I use FXCM and I think that there daily candle closes at 5 pm EST. WHat should I do in this case? Should i use those candles or should I find the High and low from 12-12midnight? Your help is appreciated, thanks.
Umair

Hi Umair,

Usually after 5 pm EST Forex market is not making any new highs or lows for the day, the following Asian session is on general less active than London or New York sessions. Thus, I believe you can trade daily candles based on 5pm closing time.
I would compare the results with midnight trading for the first couple of weeks to ensure that you have a matching success rate.

Regards,
Edward

Amazing site Edward, I was lost before I found this excellent collection of ideas and strategies. One thought, with the midnight strategy I have been watching a few currencies and since most of the losses occur during consolidation or trend reversals, I have tried to stay away when i see this and perhaps trade a currency that is in a trend. Now this has worked but is still subjective as I am deciding which currency i will put the trade on that particular day, week, etc. So, to combat this i have simply tried to put the trade on for half the size i would normally do if I feel a consolidation slash trend reversal is emminant. This way I can still trade my main currency (GBP/USD) and I don't have to jump all over the place from currency to currency. Just some imput. One more thought, as your account grows would you suggest trading more than one currency at once or just increase the lot size of the main currency you trade. I guess by trading more than one currency your swings will be lower, especially if they are uncorrilated (excuse my spelling, lol) currencies and it'll reduce your drawdown but trading costs will rise, I would appreciate some input on this subject. Also to Umair, I also use FXCM and put my trades on between 5 and 6 EST as i am in an EST zone and yes the platform day candles are from 5pm to 5pm, I havnt experimented with any other times, but this seems to work fine.

Thank you!

Here is the thing about trading with more than one pair when your account grows: when you trade one pair, you become an expert in this pair, you can read and sometimes predict/feel what reaction and pattern the pair is likely to develop next - it works to your advantage, you also keep focused on a single price action and don't lose the idea of why and when you should enter or wait for a best chance to trade.
When you add one more pair, the load doubles. For me it means I have to write down everything I want to remember about the pair: why I decided to get in or wait, what I need to watch for, what are my goals and stop options.. there is a lot of writing if I don't want to lose an edge on trading while switching in between pairs.
So get a notebook and start keeping notes :)

When you add another pair which is not correlated, as you said, you'll have your risks diversified, however, it won't necessarily mean that your final profits will be higher than if you just trade one pair.

Regards,
Edward

P.s. decided to hold with quick updates I promised earlier. Need to do some further testing.

Hi Edward,

I am new to this site, but find it very useful. However that said i feel the above strategy to be high risk and low reward. This is due to your stop losses being at either the Highs/Lows of the previous day, and the profit target only being approx 100 points/pips, this looks high risk low reward depending on what the range was for the previous day based on the High & Low.

i.e Previous Day stats:- Open 1.6575, Close 1.6312, High 1.6663, Low 1.6242

So you would place two pending orders
Long (+5 pips) 1.6668 Stop Loss (-3 Pips from Low) 1.6239
Difference between Entry and Stop loss is 429 pips

Short (-5 pips) 1.6237 Stop Loss (+3 pips from High) 1.6666
Difference between Entry and Stop loss is 429 pips

All this for a reward of 100 pips.

Have i mis-understood the strategy???

my email is nbrinvest(at)gmail.com

Hi there,

your numbers look fine.
I think that this strategy requires some additional thoughts for improving reward to risk ratio, but either way it is a great system idea to begin with.

Thomas

For candles with a day's range over 120 pips (pretty common these days), I look at ATR(14)and take 70% of that figure for my SL. I put on a TP of 1.5 x that figure. If I get stopped out it's "too bad, so sad", if my TP happens to get hit at some point I'm not looking, I'm very happy. Regardless, for me it's pretty much discretionary; I very well may close my trade during the day if the value happens to top 100 pips. Not perfect, but it works for me.

Todd

is this strategie still working profitable?