Advanced system #1 (Midnight setup)
Submitted by Edward Revy on April 29, 2007 - 08:11.
Ready to dedicate your midnight hour to Forex trading? This strategy can be your winner.
Trading strategy setup:
Currency pair: GBP/USD or any other.
Time frame: 1 day.
Indicators: None.
Trading Rules:
This system is based on the fact that most of the time you won't find same size candles for 2 consecutive days on a daily chart. What does this mean for us – only one thing: the price is moving steady either up or down with almost no price "noise" which is always present on smaller time frames.
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i live in vancouver bc canada..and it is PACIFIC TIME..WHEN YOU SAYS LOCAL TIME..DO YOU MEAN MIDNIGHT PACIFIC TIME WHEN THE NEW DAILY BAR STARTS FORMING?
MY DAILY CHART IS EST TIME.
THANK YOU
Hi Edward,
Thank you for sharing your strategy. I use a similar method, but on a one hour chart at the opening of the London Market. I would welcome the opportunity to discuss this with you further.
Terrence Muir
1. If a trade is a success, I do take my 100 pips profit. After all there is always another day to enter again.
Regarding a stop loss rule, yes, the stop required is usually quite far away, but this is also a very secure option to go with. Of course only if a proper money management is in place.
As a rule if the price decides to change its direction it usually does it slowly, not in one day. As we move our stop every day we are able to bring the trading risks to a safe minimum before the price actually turns against us.
Another option would be to set a stop loss equal or slightly higher than the Daily average Range. You may use the indicator to help you with this.
2. I would suggest taking a half of the daily range average for a chosen currency pair as your approximate target.
My biggest trading experience with this strategy is with GBP/USD pair, for other pairs you'd have to conduct your own study.
Best regards,
Edward
1. As I understand, stop loss in this system is a whole previous day trading range. That's a lot - isn't it? If the trade is a success and it goes our way, do we cash-in when we get to 100 pips profit or you just "let it ride" and just move stop-loss. What turned out to be the best solution during your trading (GBP/USD for example)?
2. How do you determine daily range under which you don't trade for a currency pair? In your system it is 90 pips for GBP/USD. How do we calculate it for other pairs?
Yes. With this trading strategy we are not trying to predict where the price will go the next day. We take the easiest way - trading on the breakout of the previous day highest highs or lowest lows.
Let's look at it this way. The day has set its highest and lowest bounds. If the next day breaks through any of those bounds it has a great potential to make it even further. By placing a buy order higher than the previous high we are making sure that this breakthrough has happen before our order gets filled.
Hope this helps.
Happy trading!
Edward.
I can't get this strategy to make sense. It says to place a buy at the high of the previous day plus 5 pips. Does this make sense? To place a trade at a price which is higher than the current price? Same is true for the sell order. Help.
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