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Money management system #1 (Lucky 7 - trading sequence)

Submitted by Dachel Miqueli

Ok guys it's been a while since I don't post anything here, that doesn't mean I haven't been working on something. I have a great system to share that fit my personality perfectly so I want to post it here so you can benefit from it. This is not a system designed by me so all the credit goes to FXTraderpro. I just modify it a little to completely fit with me.

Before you read further I have to say that this is a semi-martingale system were you can have control over your losses instead of losing all your capital like any other martingale systems. The winning risk ratio is 1/2.

Here's the deal:

1) We open a trade based upon our Entry criteria. For example, we open a BUY on EURUSD at 1.3500. Our Stop Loss is set to 10 Pips at 1.3490 and our Take Profit is set to 50 Pips at 1.3550. This is called our INITIAL ENTRY in the Sequence.

2) If our Take Profit is hit we then wait for a new Entry Signal and begin again.

3) If our Stop Loss is hit, then our next trade would be a SELL (assuming our first trade was a Buy as above) which we would enter at Market Price as soon as our Stop Loss is triggered. This new Sell position would have the same Take Profit = 50 and Stop Loss = 10 settings as the Initial Entry. This Sequence Of Trades continues each time our Stop Loss is hit, with the resulting trade going in the opposite direction of the previous trade. The Sequence Of Trades is complete whenever a Take Profit is reached.

Trading sequence example

A Sequence Of Trades means that each time our Stop Loss is hit, the next trade would be:

* In the opposite direction

* The Stop Loss and Take Profit settings would remain the same as
our Initial Entry at TP=50 and SL=10 for all trades in the Sequence.

* The amount of lots vary as the account balance grows or decrease.

I have attached an Excel file to calculate the lots amount for the sequence based on the account balance and the % you wanna risk.

Dachel_Calculator.xls

If people are interested enough I will detail my own way to entry and exit, you can use yours of course. And some tips for better timing and the best hours to hunt for an entry. I'm trading this system live for a month already and is just getting better.

Have fun and comment.

Dachel Miqueli
dachelm@yahoo.es



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


Thanks Dachel,

I guess I understood the strategy. But the diagram confused me a little bit !!!

In which way are you confused?? Let me know and I gladly explain.

Thanks Dachel, for the tips. Can you please give an update on your entry and exit tips. I would love to know. You can equally add some more tips :)

Best Regards,
Jacob.

I order to clarify I will resume a bit more the process. I will use the image above as reference

Let's say I have $5000 deposited so this are the steps:

1- Open the excel file and fill the yellow box below "Balance" with you balance amount ($5000)
2- Right to the balance box is risk. You should input the amount of % you want to risk. In my case I will risk 10% of my account.

After you do that you should get the lot sequence automatically calculated. The OCO (Once Cancel the Other) at the right side indicates the amount of lots you have to use when using OCO.
With $5000 and risking 10% ($500)the sequence should be 0.05, 0.18, 0.63, 0.75, 0.90, 1.08, 1.30

Example using the picture above

3-Enter the market buying at 1.3500. Place a 10 pips stop and a 50 pips limit. If you are using OCO then instead of placing a 10 pips stop you should place a sell entry of 0.23 at 1.3490 with always a 50 pips limit.
4-Repeat the same concept until your hit the TP or hit the 7th entry stop.

I hope this help understanding the basic concept. There is much more involved but let's start simple.

Dachel Miqueli
dachelm@yahoo.es

Hi again,

You've said that when the SL hit, we change the TP to the other direction.
What is shown in the diagram that the SL is hit (at 2 and 4), but the TP still at the same value !

Does the line connected between 1,2,3,4 and 5 means price motion ?
Hope u understand my english :(

Mohammed Al Khuseibi

To: Mohammed Al Khuseibi

I'm sorry about step 4. I just jump one important detail. If the stop is hit then you place a sell and set a 10 pip stop and a 50 pip limit. If our stop is hit once more then you place a buy with the same SP and TP as always. The sequence is explained above.

I hope this answer your question and your english is fine.

To: Jacob

As this system is based on probability you should realize that a we earn money if the market goes to one direction only. Said that I will trade at the market most volatile hours, around the London opening and the US opening. With that in mind I will now look for S/R because I found it very effective to trade using this method. I usually look for a time of consolidation before enter the market. One powerful tip is to SELL on resistance and BUY on support. Soon I will upload some chart so you can see some examples. There is much more regarding entries but for now that's a good start.

Hi Dachel. I'm interesting about trading sequence MM type. How long are you trading that concept? Which pair are you using? Do you have any rule for starting sequence? Thanks for help.

Jan