Forex trading strategy #1 (Simple balanced system)

Hi Sanjay,

only you determine how much you want to risk and lose.
Keep practicing despite losses, you'll get experience and with it knowledge how to deal with losing trades.

Best regards,
Edward

Hi Edward, as you correctly say that assuming that the EMA's would cross, i made an Entry and incurred a huge loss.
One thing i have seen is almost beginner have less patience and discipline, hence losing money becomes a de-motivating factor among all losers.
Txs
Sanjay

A technique to use for stops and lot management would be next:
When a signal is given you enter with 1 lot. Put stop to 20-30 pips and hold.
If a trade goes against you - you'll lose 20 pips.

As soon as your position goes in profit for about +20 pips, you can add another lot with a stop at -20 pips.
At this point a move against you would cost you 40 pips. Still not a big deal.

If the first position reaches +40 pips, second will be +20, set SL to break even for the second position, and close the first one. By this time you've earned 40 pips.
If you don't have any warning signs ahead, you can keep the first trade for a bit longer before closing.

You now have +40 pips - enough to cover next 2 losing trades if they happen to be.
You also still have the second position running, which may put some more pips in your bag.

Using this approach, you can multiply lot numbers by 2 or 3 to match your own risk level.

Best regards,
Edward

Hello,
I'm new to trading though I have demo-tested Oanda for quite some time (so am not a total noob) but never had a strategy as I believed they did not really exist and were a hype that companies can sell. (After all if they worked they'd keep those to themselves rather than sell them) But since I discovered that people share strategies here for free that they claim work for them I have decided to use this one that seems to fit my KISS requirement.

I'm now learning to use MT4 as it seems to be what pros use and I want to be able to choose from a large range of brokers plus Oanda doesn't seem to have advanced charting tools at least on demo.

I want to apply strict risk management and money management rules to my trading as is advised a lot by pros.
I want to have at least 1:2 risk:reward ratio and never risk more than 1% of my account. My demo account has $100,000
Now my question is the following. To get the advertised success with this method I suppose you follow specific stops according to your MM rules. However the probabilities will definitely change according to how many PIPS you are ready to lose or capture. What would be a practical stop-loss/TP level that works here with this method? I noticed that despite my desire to use larger time-frames (say 4 hours) swings can be extremely wide in the short term so too tight a stop would not work. So I had thought that 1% here is $1000 so it translates to 5 lots/20 PIPS stop-loss and that seems a rather tight stop. 1 lot/100 PIPS stop-loss would risk the same 1%, less likely to fill the stop but also less likely to capture profit of 200 PIPS. I'm not sure if you get what I'm trying to get across but can somebody for whom the method works document their exact MM rules,stop-levels etc?

Now a small Off-topic rant. In Oanda I was used to their order form where the stops/TP levels changed automatically with bid/ask price allowing you to always use the same levels without having to adjust them everytime. On MT4 I've noticed that while I set the stops/TP levels the price already has changed and it annoys the hell out of me. Is that a parameter somewhere or do I have to live with it?

hi, my name is siti from malaysia, thanks edward,,, i love this site very much

Stochastic is applied to close.
Moving average method: simple.
Success rate - high, with occasional manageable losses, if to follow the rules all the time.
Regarding the EA question, I don't know if anyone coded it already. I don't know how to code.

Best regards,
Edward

hye Edward,

i would like to know in stochastic to you apply to close or high/low?

Hey there! What's the success rate of this system? I liked it alot because it's simple!
Thanks!

hi Edward,

i would like to know Moving Average for stochastic applied to simple or exponential?

dear Edward,

can you please tell me does stochastic also applied to close or high/low?

Hi Edward,

Has anyone been able to develop and EA for this system?

Thanks
Andrew

Hi Raymond,

have you tried CCI based exit, where you basically start with Parabolic SAR and then switch to a trailing stop.

Another idea would be to use Heiken-ashi candles, either regular or smoothed.
I think I'd just link to this page and there are both indicators and explanations to them: Heiken-ashi based stops

Best regards,
Edward

Hi Edward,
Thanks for your reply on my questions, this is a good strategy, simple and effective.

I would like to know what tools you used to determine your stop loss or how many pips you set on stop loss.

I have two loss due to stop loss of 50 pips, which I think is too tight, got hit and market go back to the correct direction..

Any guide on this?

Thanks
Raymond.

Hi,

that should be simply RSI 14.
30 and 70 are the horizontal levels/lines you draw to mark overbought/oversold levels.

Best regards,
Edward

Hi Edward,

i am confused about the parameter for RSI(14,70,30). the 70 and 30, what is it for?