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Developing a Strategy #1 (Daily chart trading)

Submitted by dachelm
dachelm@yahoo.es

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Hello and thanks for this great site.

This strategy is still in development and I still don't know if I should send this but I find it quite interesting and I just want to share it. Please let me know if I am right or if this could be something else.

OK here's the deal. The start point is the daily chart and is quite easy to understand cause does not require any indicators so far but could be considered if somebody want to add something to this "strategy".

As I said we take the daily chart and any currency pair I tried so far with GBP/JPY but should work with any. Take the first candle and if close bullish then entry for a long position (1 lot) with no limit and no stops coz you will wait for that candle to close and then close the position. If that candle close bullish again you go long again (1 lot) and so on until a candle close bearish, when it does entry short with the doubles of lots (2 lots)of the last trade and if you lose that one too repeat and double the lots (4 lots) until you win.

This could sound scary and include a lot of risk, I'm still trying to fix the risk but I can tell that I analize the first four months of 2007 and here are the results:

January: +1080 pips
Febrary: +865 pips
April: +1500 pips
May: -45 pips

If anyone want to add something please feel free to do it coz This looks good but needs improvements.

Thanks
dachelm



http://forex-strategies-revealed.com/


sounds good. maybe worth looking at how often price actually becomes range bound in daily chart. if there is only ever 4-5 candles max that go , up, down, up, down, then i think u have a very good strategy and using the doubling method wouldnt be risky.
however if you find times when prices does go up first candle, then down second, and up 3rd, 4th,5th etc .... think whether that would blow ur account.

You are right the risk is high, that's why I wanna keep looking for a lower risk method. That's the reason of posting my idea here. This really works but sometimes the risk gets very high.
Thanks for your comment.

So as I see it, we need to either find a method to filter sideways patterns (where candles change directions frequently) or we may try to identify a trend with a help of some indicators and take trades only in one direction.
I'll come back with ideas in few days.
Olvier

What if we do next:

Add this indicator sa#MTEI_Supertrend.mq4, which will suggest a trend.
a) when the line is green - only Long, red - only Short.
b) set entry order 10 pips below previous candle's low (downtrend) / high (for uptrend) and only if previous candle's color is the one we need,
e.g. if we are going to Short only (indicator line is red), we look for a previous candle to be bearish (red) on the close, if so, then we set a Sell Stop order 10 pips below that candle. Close by the end of the day with either profit or loss, as suggested by dachelm (the author), and no stop needed.
b) do not trade Mondays (lots of negative trades has been observed on Mondays).

Forex strategy developing

Also tested same rules but without looking back at the color of the previous candle, e.g. always kept either Short or Long order 10 pips away in the direction suggested by Supertrend indicator. Got 21 winners and 5 losers for the same time period.

Regards,
Edward

Hey Edward that looks very good, Can you tell how many pips was caught in that past data image? and how many pips in the 21 winners and 5 losers.

Thanks
Dachel

Well I calculate exactly what you got in there and the results are nice

1659 pips from 02.08.2008 through 06.06.2008 (Four Months)
Monthly average: 414 pips (spread not included)

I will back test this system for the whole 2007 to date and come up with results and by the way do you open an operation sunday until 12:00amEST and then Close it? Then not open another one Until tuesday?

Thanks in advance

Dachel

Hi Dachel,

Thanks for doing calculations. The results are good indeed. I'd be interested to look at a report for 2007 and 08.

Sundays aren't suggested for trading. So, we have a break (no trading) on: Saturday, Sunday and Monday.

Regards,
Edward

Great Job Edward, But please i dont know how to get the sa#MTEI_Supertrend.mq4 indicator. I would appriciate if you provide me with the info on how to get it. Thank