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Developing a system #26 (The Entry System)

Submitted by Chris

This is an enter at "almost" any time system. I'm not really sure this is a strategy but it has been working very well on a demo account. Entry is still a problem but here goes --

I place S/L at 40 pips (or 400 points on 5 dec system) and T/P at 210 (or 21). I use ECN broker whose spreads range between less than 1 and 2. Do not trade above those spreads as it diminishes odds. Assuming 50-50 shot of picking a winner, the formula is as follows (-410* X .5)+ (210 X .5) - [spread]. This is a loser, but b/c the t/p is about 1/2 of the S/L, my odds are probably in the low 70% range. I estimate that for this to be a winner, I need to pick winning trades roughly 72% of the time with these spreads.

I then look at the 4hr, 1hr and 15M chart. I place MACD and stochastic on each, with 9 EMA. I determine trend in 4hr and 1Hr, and if they match, I look for entry point on 15M. I have been averaging winning trades roughly 78% of the time.

Sometimes, i cheat a bit and if I see a clear trend, I remove the T/P limit and put in a trailing stop. This can be good and bad b/c a quick swing reduces my profit and technically negatively affects my approach.

Here's my problem -- I do not like my entry system and I am looking for tips/advice on an entry system where I can look at an indicator or 2 and immediately enter. Right now, I feel like I am guessing too much. Any help would be great.

Chris (California).

oh, forgot to add that ECN charges a commission so this needs to be factored into the system.

Chris

If you risk 20 pips per trade (plus 2 pip for spread and commission)
and your reward is 40 pips (minus 2 pip for spread and commission)
and considering a win rate of 75% (On how many live or demo trades is your statistic based upon?)
you will on average win 1,15R (23 pips per trade)
1,9R*0,75 - 1,1R*0,25 = 1,15R
This looks like a good system to me. In my opinion there is no need to change anything.

I just posted a reply about the average return (1,15R) to be expected. I just noticed that the risk is 40 pip and the take profit 21 pip. So my calculation obviously isn´t correct. To answer the question I would propose that after determining the trend on H4 and H1 an oscillator (i.e. Slow Stochastic 14-3-3) is used to fine tune the entry. Once the oscillator crosses below 20 enter on the high of the current bar or opening of the next bar for a long position and if the trend is down and the oscillator crosses above 80 enter on the low of the current bar or opening of the next bar for a short position. Certainly not perfect but it´s a start.

thanks for the input

Hrrmmmm Correct me if i am wrong, Chris you have a stop lost of 40 pips and a target profit of 21 pips excluding spread pips and comission? which means the ratio should be 1 to 1/2 (roughly)? Can explain your system a bit more?

Anyway back to your question, regarding entry, there are a few famous entry:
- TTE (traders trick entry) [can be known as "reload"]
- 123 entry, break 2 then enter
- Fib Entry (enter after a swing is made, around 50% or 68%)
- fast MA cross entry (e.g: 3 ema with 8 ema)
- slow stoch cross entry

Whichever entry you choose from above, you can notice there is one common theme. All of them encourage Buy After Dip, Sell After Rally.

That strategy with Fibo and the zigzag was sent by Pregem(Fx Mentor) projam71@gmail.com.

Chris,

Your system is very similar to #7 Simple trading all the time, also located in the Systems under development section. That system was based on a 20 SL 10 LP. The original poster found that the +10 hit much more often than the 66.666% than would happen with a random serious events. I would suggest you take a look at the suggestions that were placed in that thread.

Edward, that runs this site, suggested: "If to go without any indicators, we can simply try changing regular candlesticks to heikin-ashi candlesticks. We would be interested to Buy after a close of a bullish candle that has no lower wick, and sell after a close of a bearish candle that has no upper wick."

As far as the commission issue, I would suggest 2 possibilities. One, maybe there is a way to hide the the SL from non-ecn broker, that does not charge commission, so the broker could not hunt or take out your stops. Two, find the lowest cost ECN one can find and add that in and see if you can beat the Vig. so to speak.

Just to clarify, with out any adjustments, you are profitable with this system? Live? Demo? Which pairs?

I plan to backtest, and forward test the system #7 with heikin-ashi candlesticks. Given this thread, I will try the 40 SL- 20 LP in your system too. I would like to hear more about your research in this area. Keep us informed on the tread, and I will report my findings too.

Robert

Good