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Forex trading strategy #19 (Simple Stepping into Position)

Submitted by Marie

Hi

I’m a senior living in Canada. I like the idea of position trading forex, but I can’t afford the draw downs. I’m hoping that the following system will satisfy my “day trader inclinations” but will edge towards holding positions for the longer term. It also should increase the use of leverage. With only one position with risk open at a time, entry with each new signal can be taken, pyramiding gains. I’ll appreciate suggestions for improvement. I’ve enjoyed reading all of the postings on this site.

Marie

Simple Stepping into Position

Pairs: Any (watch multiple)

Indicators:

50 sma 1 hour chart
Candlestick reversal (Or use other reversal Patterns)

Filter: 200 sma 4 hour chart

Short Entry:

4h 200 sma going sideways or sloping down

Look for reversal patterns in the vicinity of the 1h 50 sma. These can be taken from anywhere above the line to a small distance below the line. If the 200 sma is going sideways, make sure the 50 sma is sloping down.

If the 4h 200 sma is sloping down, the direction of the 1h 50 sma doesn’t matter.

Long entry is opposite.

Method:

Enter your trade in 2 sections. The size of section 1 is twice that of section 2. SL is 5
pips outside of the extreme reversal high or low. TP for section 1 = entry price plus or minus (2 x the difference between the entry price and the stop loss). Enter a trailing stop by the same range on section 2. After the trailing stop on section 2 has moved twice, remove it and start locking in ½ profits. Never reduce the size of the stop. Only move it in the direction of profit. Should the profit exceed 4 X the average daily range, start locking in ¾ of profits. On section 2 trades, just take whatever profit the market gives .

Risk/ Reward example

Stop loss 50 X 3 150
Take Profit 2x100 200 2nd section gets stopped out at break even
net gain 50

Minimum risk/reward 1: 1.33


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


Hi Marie

First, this is quite nice. Seems to work well in a quick backtest.

Could you help with

1. which pairs, if any, do you have MOST success with?

2. which is your preferred timeframe? (I found 15M quite acceptable with several successes a day, possibly 30M or more?)

This is trading less then long term obviously but not really scalping, either. Interesting niche.

Looks like a money maker. Keep this up and you will be a very comfortable senior. ( -:

Thanks for sharing your fine thinking, David

Hi David

Thanks for doing some testing. I'm going to try the 15 minute timeframe with the longer filter on hourly charts. on several pairs now. I don't have any history to report on, but wil actively trade this week. I'll report back next week.

Marie

Hi Marie,

Thank you for this simple system.
There are many reversal patterns known. Are there any particular ones you use most. Could you name few. Thanks.

F.G.

As we know : "Pictures worth 1000 Words !"

Marie, could you help share a screenshoot of your system or maybe anybody to help us, so we can learn with much better.

Thanks in advance.

(I'm still Waiting the screenshoot)

Kind Regards;

Manus168

Hi F.G.

I don't have a favorite reversal pattern. When the trend starts to reverse close to the 50 SMA, I'll check the longer term chart. I.E. if there has been a series of higher highs and higher lows, and then there is a lower low, I'll consider it a reversal.

I want to change the longer chart filter to the Alligator indicator.

Hi Manus168

I'm attempting to upload a screen shot.
Forex strategy - stepping into position

Thanks a lot Marie ... :)

Kind Regards;

Manus168

hello Marie I am Réal from canada I am looking for someone to help me take a litle money from trading
c-papi(at)live.ca

Hi Marie, I am surprised to see this post. I have been trading for 3 years now, I am glad to say i have been using this method as well. Personally its one of the most effective methods around.

cheers

Bryan