Developing a System #4 (Trends and breakouts)
Submitted by User on August 24, 2008 - 16:04.
Hi guys! I read quite interesting book lately about stock market trend analysis, and I came up with a strategy that I back tested on many pairs but needs a lot work to minimize risk. So, you are all welcome to try it and send your comments on how to improve it.
This strategy is based on the previous day/week trend. On daily chart, If we had low week (downtrend), we look for the lowest low candle. We use its highest and lowest point as breakout for the next day trading. Every time the price crosses its highest point it's uptrend and vice versa.
For all of you out there, please backtest this trading system, I really find it promising strategy, but I have problem setting up target and stop loss, and big problem with whipsaw. Write me at (amra4isis[at]hotmail.com) if you need more details.