Forex trading strategy #8 (Teodosi's simple system)

Good point CS,

you'll have an advantage if you're able to combine knowledge received from different time frames.

Exiting at Bollinger Bands is possible, and the indicator itself provides a good visual reference for price action. I'd probably use a trailing stop once the Bollinger band is reached: if price advances outside the Bollinger bands, we'll get a good rally in an uptrend or a sell-off in a downtrend, so we could try to stay a bit longer to profit from the move.
In general, if a candle that hit the outer Bollinger band is relatively long, I move my trailing stop to 1/2 of its length, because if the move meant a strong continuation (which I expect and hope for), I'll be there to profit, but if it was the "last stroke", I'll be quick to exit, knowing that I still gave it a chance.

Best regards,
Edward

Hi,

I was wondering if to get an appropriate entry signal one should progress either up or down the charts (look for signal on 1h, 2h, 4h then enter or in reverse order) or is this unnecessary? Also, should bollinger bands be used for TP targets?

Thanks,

CS

Hi KP,

the trade has been placed correctly.
The TP is either an opposite trading signal
or
a trailing stop once in profit AND Stochastic reached an oversold/overbought level. A trailing stop should be placed behind the last closed candlestick OR, optionally to stay in a trade longer, behind the last but one closed candlestick. In both cases you will often be exiting before the move ends, but you'll be exiting with profits each time.
After all, catching the entire move from top to bottom is very difficult and not worth risking everything for it; although looking back at charts later it always tempting to get it all :)

Best regards,
Edward

Hello i would like to know wer would be the TP if applying this strategy. It has been mentioned before but would like to understand it further. Thanks for the guidance, Cheers
kp

the link is here please let me know if i have placed the trade well.
KP

The file is hosted remotely, you have to post a direct link to the file in your comment in order for us to see it.

Thank you.

Thomas

Hello i have attached a file which shows the sell trade i have entered according to your strategy. Further i would like to know when entering the sell trade do we need to wait till the red (black)candle has closed. I hope i m clear with my question.

SL is simply the lowest/highest point to the left from the signaling candle: often found within previous 1-2 candles.

Then you'll be sitting tight until Stochastic lines cross against your position for the first time. At that moment take half or 2/3 of profits made. Let the rest run and exit with the strategy rules.

Rich

okay, thanks. But, could someone please give more insight on stop loss management for this strategy?

Hey, CG

Originally, the system uses no ADX, and I personally think you don't need one more indicator here :)
If you need to code a system, I'd recommend www.forex-tsd.com forum - it is one of the coders' nests, a lot of EAs and indicators were born there.

Rich

Hello,
I am relatively new to forex... but was wondering if anyone has written this system up as a program through ninja trader or is that even possible? Also, could someone post the backtested results or their own live results as I do not use MT4?
Lastly, I was wondering if this system is holding up in the current market conditions and how closley should I watch the ADX line when using this system?

Thanks,

CG

You don't need the RSI for this system. The stochastic oscillator alone will suffice.

Thank you!

Teodosi is one of our great contributors, however, I haven't had a chance to ask details about his trading background. We haven't heard from him for quite a while, so I cannot be sure if he is visiting the website at all.

If to speak about the system background, it mainly uses the knowledge of japanese candlesticks and momentum trading for aiding market reversals.

Best regards,
Edward

Hello Edward,

I am reasonably new to forex and stumbled on your site. I would just like to say god bless you first of all. In all my research there is none other than this place to be for beginners and seems like professionals alike. You truly are balancing out the universe.

I have been looking for a SOLID strategy for a while and seems like Teodisi has provided it. He is spoken of like a great trader. Would you kindly give us some background information on Teodisi, I like to learn of the people who become great learn there ways. After all if one man invents a wheel another should give it wings!

Thanks edward.

i am not getting forum page of this website. because of which i had to ask you the question here.

Aariff