FREE FOREX STRATEGIES

Developing a system #7 (Simple trading any time)


Submitted by trader.

I have been trading a fairly simple strategy which is the result of my frustration with indicators, progressive systems and marginally profitable ideas that turn negative due to dealer spreads.

My general "dilemma" in forex is that most strategies work well in either trending or ranging markets but not the opposite. Also, I do not have the patience and stamina to sit and stare at the screen all day, so I was looking for a strategy that I can enter at any time and that has pre-defined exit points for either profit or loss, so I can enter into a trade and walk away.


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I will give this strategy a try on my live account. I have been doing a similar strategy and it has been working well since Feb of this year. I started w/ a 5k size, went down to 4700, and till date (7/6/09) I am at 9257. My goal is to withdraw 5k when i hit 10k.

And regarding the ECN/STP broker, try fastbrokers.com. They offer the Currenex ECN w/ a minimum deposit of $3500 (instead of 50k-dukscopy) and the spreads are pretty tight across the board. And this is an ECN where you can trade mini lots too.

I'd say you have a look at Interactive Brokers, PFGBEST and MB Trading.
Amy

Hi Amy,

Which one is, in your opinion, a good no dealing desk broker?

Me personally maintain a game account with OANDA to practice different strategies.

Thanks Moimeme

Well, that's the point that when we trade with a market maker, all we can see is prices given by a dealing desk. We do not see a real market with a dealing desk broker, which means the broker can feed us any price he wants, including hunting our stops by making non-existing anywhere else price spikes.

With a no dealing desk broker, who uses straight through processing and brings real prices back to traders, no artificial price quoting can be done and there is no need for it, since no dealing desk brokers are as a rule more developed and trusted entities on the market, who has a business to do rather than play with customer stops.

Arny

a question here, when we say they could hunt the stop loss whom do we mean? and how can they hunt the stop loss of a trader?

I know that forex some one take your money and vice versa but how is this game take place tihs will help new traders to know the rules and rduce losses I wish if any one has the answer fr this

- T.Ayyad

Hey Guys,

Can somebody explain how this stop hunting mechanism of forex e-brokers works?

What you’re essentially saying is that forex e-brokers, obviously seeing the stop loss orders of their customers, manipulate the price in a way that those stops are more frequently hit than profit limits and those brokers ripe a nice benefit from this activity.

I believe that at any point of time, there is only one effective price of any currency pair all across the globe. This is because forex markets are so extremely efficient, nobody, other than the largest institutional investors, have the power to influence the price. Hence, forex brokers have no tool in their hands to chase their customers’ stop limits.

Secondly, I think e-brokers have no interest to chase stops. They are actually commissioners who provide the trading infrastructure and execute customers’ orders. They charge a small commission for their services (bid-ask spread). These tiny pips add up to an exorbitant amount of money which is the actual source of income to these brokers. They are absolutely uninterested in the outcome of the trade, they are, like any commissioner, interested in trading volume which is the base of their income. The value of those stops is minuscule to what they can make from their bread and butter business.

All in all, I think brokers have neither the power nor the incentive to go after their customers’ stops.

Am I missing something?

Albert,

I know MB trading is an ECN and do not hunt for stop targets.
However, I found out both MG and Oanda do go after your stops if you are a big trader with $$$$.

I guess I will be opening an account with ECN firm only.

Thanks for clarification.

Jack

Hi Jack,

MT4 brokers are simply brokers who offer Metatrader 4 trading platform.
MT4 brokers may or may not have a dealing desk.
At the dealing desk trading orders are monitored by the stuff and here is where stop hunting can take place.

ECN brokers are brokers who offer the most advanced trading conditions and they don't run a dealing desk.

In any case stop hunting is a clear cheating. I believe a broker who decides to practice this will be punished soon by its own clients - as soon as the scam goes on the air a broker is going to lose its business... So, its risky for a broker to hunt traders stops.

I don't think Oanda or MG forex do this.

Albert

Can someone please tell me the difference between the following brokers and why would you choose one over another.

Submitted by Andrew on November 10, 2008 - 18:02.
You can look here:
ECN Forex brokers
MT4 Forex brokers

Also which brokerage type would not hunt for your stop loss limits. Do you think MG forex or Oanda do that.
Thanks for all the valuable comments.

Jack

I understand your motivation to let most of all indicators out and make forex trading as quite as simple if possible and that when I enter in the market I will not wait 1 hour or a day, afte all I winning pips.

May be your technique in combination with developing a system #12 (Heikin-ashi-two-bar-strategy, eur/jpy 5 min gives further answer. (There ADX 4 isn't real necessary).
Also in combination with MACD 2,4,20 from Dr. FAWWAZ perhaps an idea for further looking, isn't it?

kind regards
sam

Hi,
check out Fibonacci Bollinger bands, they allow me (when checked on multiple timeframes) to enter almost anytime. I do not use any other indicator. You can download ex4 version from here:
http://www.forexfactory.com/showthread.php?t=35566
If anybody could throw in a sourcecode, that would be nice.

Hi,
I was wondering if the 10 limit was arbitrary, that is you consider it to be small when in fact 20 is small. At a limit of 20 you'd be operating at a 1:1 ratio rather than 1:2 (did I type that right). On your last win of your cycle if your 26 wins had moved 20 points you'd have made 300 pips instead of 40. If not 20 than try 15. I know what you mean about sitting there watching the computer but if you applied some indicators like that MACD by Dr. Fawwaz and maybe 5sma and 8ema you could enter according to the indications and put a trailing stop of the number of your choice and then go do whatever it is that you do.
good luck
dan

You can look here:
ECN Forex brokers
MT4 Forex brokers

Hope this helps.

Andrew

does anyone know of an ECN broker that has MQL4 with it?

Yes, I have traded live for a while now. No problems with stop hunting when I set my stop large enough. The last few days I had 37 trades, 26 of which were won. So I lost 220 pips and won 260 pips (spread is already factored in).


 

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