Advanced system #14 (Simple trading with Daily range)

Stuart

What i cant work out is that you say on the first posting that you place your buy and stop orders in their respective positions but then go on to say later that you only trade in the direction of the centre of gravity direction. Sorry, have i missed something? IF you are setting buy or sell orders I assuming you set them and go off and do something else but your reference to the cog direction suggests that its a manual entry - I am slightly confused - could you explain the process again please.

many thanks

SCott

Hi

On the COG lines, when I confirm direction, I use the 1 hour time frame.

With the testing yesterday on the ratio of 1:1 with the reward risk, most of the pairs hit their SL, resulting in -136 pips for the day! Thus proving that the current settings of 1:2, it is more profitable by a mile?

Thanks,

Stuart

Hi Stuart,

When you look at the COG lines to determine the direction of the trades , which timeframe do you use ?

Thanks for sharing your system.

Hi David,

Thanks for your interest. By placing, or starting and ending your 24 hour period at 9pm GMT, should work the same as mine, as the CLOSE price actually plays a major roll ... and of course the previous days movement. Please let us know what results you achieve during that time frame.

Today I am testing a reward/risk ratio of 1:1 just to see what results I get? I will post my findings here for all.

Thanks, and happy trading.

Stuart

Hi Stuart
This method is quite fascinating ! - I just wondered if you are know setting both long and short orders or if you are just placing an order in the direction of the trend ?

Please keep us updated with your results - I am taking a daily cutoff at 9pm GMT and placing the next days trades immediately after that.
Cheers
David (Manchester UK)

Hi all,

I know my reward/risk ratio isn't the best ... at 1:1.8 to be exact, it is pretty darn ugly.

My way of thinking, please correct me if I am wrong though, by trading now 10 pairs, when I loose on one or two at 1:1.8, it will gain on the others? Right now I am concentrating on being profitable on PIPS at the end of each day.
So far, I have not had a negative day. Some days I am sure will break even, some will even be in a minus figure, but the plan is to have a positive figure at the end of each day/week/month ... and so on.

Your ideas and thoughts are always helpful.

Stuart

On those days when you have a huge move out of the ordinary i.e. that example you said were you had a 700 pip move in one day... what you could do the next day or you could do this any day you want & this would be to calculate the pivot and then place a buy and sell order. Example place a buy order 10 pips above the pivot or sell 10 pips below the pivot & take profit would be 10 pips & stop loss would be 10 pips or whatever you think would be good.

hello Stuart

in my previous post I meant no criticism, I think you have a good system, most successful traders I know use breakouts. I just wanted to emphasize the importance of keeping your risk as low as possible. If you could bring your reward to risk up even at the cost of a lower win rate it would be worthwhile. Wish u every success in your trading.

Hello all,

As promised, my live results for the week. My week is from Monday 07:59 GMT to Monday 07:59 GMT.

EURUSD: +132
GBPJPY: + 380
GBPUSD: + 345
EURGBP: + 109
GBP CHF: + 164

The 3 open trades that carried over the weekend: EURUSD hit SL of -53, GBPJPY I closed with 81 pips in profit, and the GBPCHF I also closed with 14 pips in profit.

I have added more pairs to trade this method, and will keep you updated on the performance of all 10 pairs.

Thanks,

Stuart

Hello,

Thanks for your input. As you may have read in the notes, we ARE concentrating and working on the risk/reward ratio?
By Monday 07:59 GMT I would have been live trading my method with the current settings and pairs for a week and will post my results here. I will also post my ratios achieved for the week.

Of course the percent traded for each trade is important - trading say 5% per pair is way out! Even us amateurs know that?

Until tomorrow,

Stuart

this is not viable because the reward:risk is 1:2 lets assume you allow a very large risk per trade say 0.5% and you trade all 6 pairs. You have to have all 100% winners to get a return of 3% and day in and day out this is not possible to achieve. A single loss will set you back two trades. As any professional knows they only way to make money is to limit your risk, you always have to know how much you stand to lose as opposed as to how much you stand to gain and keep the risk as low as possible. This is why professionals prevail in the long run over armatures. You find thousands upon thousands of ppl posting systems which show fantastic results sometimes +50% a week yet a year later neither them nor anyone else has manged to turn a profit most likely they've destroyed their accounts whereas professionals will be profitable with small but decent returns. This is because they concentrate on risk thats the main thing to be long term successful. At the end of the year its better to be even 20% profitable rather than lose everything in the hope of shooting for high returns. I was just browsing through this forum and I'm almost sure no one has made significant money long term. Dozens upon dozens of systems littered here but in the end no one really made any money at all. The way to do it is start with a large account as large as you can manage, forget about "only trade what you can afford to lose" if you do that you're sure to lose it because you'll take unnecessary risks. Please read the book the "Zurich axioms" if you cant get it let me know and i'll send you a free pdf of it.

So start with a large account, as large as possible within reason of course don't mortgage your home to fund your account lol. Keep your risk per trade as small as possible preferably less than 0.5% per trade. If you have a large account and a reasonable expectancy even a profit of 0.5% can be emotionally gratifying and you will not tend to take unnecessary risks or over leverage yourself.

Always remember to keep your risk in check and you'll be way ahead of the game in the long run and thats when compounding will set in and you'll be miles and miles ahead of those who started out shooting for high returns.

I also highly recommend you read the book by Phantom of the pits it is completely free and very insightful.

Hi Edward,

Thanks so much for looking into my method - means a lot to me.

I try and stick to "my" rules with regard to open trades after the 24 hour period and close all open trades manually, taking only a smaller amount of profit, or accepting the loss. My reasoning and logic behind that is every 24 hour period has a different "range" and thus my 25% target differs daily. For example, on 12/03 the GBPCHF had an enormous move of 715 pips - way above the normal movement. My 25% was then 179 pips for the next period, which was also above the normal movement. I still set my orders as per my rules, but was pretty sure neither would be triggered - and they didn't? Over time one could determine the average movement of a specific pair?

With regard to the risk/reward ratio: I was thinking of changing the SL to 15% of previous days move, keeping the target to 25% as well as the distance from close to 25%?
Therefore, with a previous move of say 150, my SL would be 23 pips, and TP 38 pips. A ratio of 1.65:1 instead of a 1:2? I am going to put that to the test on Monday at 7:59 GMT on one pair to start. If the results are positive, I will attach the new formulated spread sheet again.

With regard to filters and things, I am clueless? That's where I need help. ;-)

Thanks again,

Stuart

It is indeed very good, Stuart.
Congratulations!

I wouldn't suggest changing anything, definitely. At least so far.
But there are two things we could try to work on:
- how to improve risk/reward ratio by setting a stop closer?
- is it possible to add one more filter to eliminate some losing trades?
To do that we need to analyse losing trades.

I'll put this strategy on my list for testing during the upcoming week and will report on testing results afterwards.
Also I think we need to move this system to "Advanced level", where we will continue working on it.

I have one question regarding the strategy rules too: if by the end of the day an open trade hits no TP and no SL, do you close it manually or do you keep it open for another day or even longer? Thank you.

Best regards,
Edward

Hi John -

You asked how did I discover this?? It basically came down to 2 questions that I wanted answered:

How do I catch a percentage of a pairs average movement?
How do I know which way to go?

The figure of 25% seemed safe after some calculations to a.) decide on the direction, and b.) not to be greedy with how many pips I wanted to profit.

So far so good.

Stuart

Hi All,

Paul - I think you need to download Winzip, you can google it and get it for free. I did manage to bag the GBPUSD move of 71 pips, as well as the EURGBP move 25 pips.

John - It should work in any time zone? It should also work setting your 24 hour period to what suits you. On the template, the gravity line is the thin blue line basically following the trend?

Andy - I do know the risk ratio is 1:2. I have thought of doing it 1:1, but often the retractment alone is the 25% I need. As you are only trying to catch 25% of the previous days move, and have 24 hours to get it, I have had pairs go over -25% and then back to to the required TP.

However? One could, once the trade has been triggered, and you are in profit say 20-30 pips, move your SL to break even? But, with the ratio between wins and losses ... so far it is pretty profitable to have your risk at 1:2.
Looking at this past week, profit of 1201 pips on 6 pairs with 3 trades still open currently at -206 pips. Those 3 trades will be left until my time Monday 7:59 GMT, (as their 24 hour was Fri 7:59 to Mon 7:59) and only then closed if they have not exited at either TP or SL. Should they all hit their SL, it will be -306 pips ... and therefore I have made a profit still of 895 pips for the week.

But please, any suggestions are always welcome.

Thanks,
Stuart