This is a simple trading method and it can work on any pair. However, it must be used on the Daily timeframe only. You just have to do what the system is telling you to do, there is no time to think. And we are only using a few indicators just to help us with some calculation but not to derive any trading signal from them. As the name implies, this trading system is a counter trading strategy, that is, we are buying when people would normally be selling and we are selling when people would normally be buying.
The system is just the basis of what can be a more complex system after you tweak it and add indicators etc to fine tune the strategy.
I am going to write on the rules one by one and detailing them as we go on We first need to calculate the average height of the last 10 daily candles. To calculate the height of 1 candle, we take the High of the Candle and we minus the Low of the same candle and we get the height in pips. Each candle will have a different height or pip height. Here is a screenshot to get a clear understanding We can do so by calculating the height of each candle separately, then adding them together before dividing them by 10 to get the average height we are looking for Of course, this can be tedious and time consuming However, there is a trick to achieve this.
We just need to add 2 simple moving average to the chart. Now to get the pip range we are looking for, we take the High moving average value and we minus the Low moving average value and we get the average pip height of the last 10 candles. If you want to look the average pip height of the last 20 or 50 candles, you just change the period of both simple moving averages to these values.
Here is a screenshot of what I am talking about. Please take note that we need to use values from the SMA on the current candle which is still open. This is all regarding step one and as you can see, it is very simple and easy to get this average pip height of the last 10 candles on your chart. You must also note that the moving average were used just to ease the calculation process and not for generating any trade signal.
I hope everything is clear in your head so far After you are done, then you are ready to move to step After we have calculated the Average Pip Height from step 1, we should move to the next step which teaches us how to calculate the TriggerPip Value. First of all, you might be asking yourself what a the TriggerPip value is As far as the calculation of the trigger pip is conncerned, it can be done by a school kid. As simple as this If everything is clear so far, you can move to next step.
Otherwise, make sure you read this step again. Also, the system is open and you can use another percent value if you like. This part concern the trade entries and it is very important that you understood all of the above before you can continue reading this part. Now, you should monitor the daily candle If the height is less than the TriggerPip value we got earlier, then we do nothing.
When the height of the candle rise up and becomes equal or greater to the TriggerPip value, then we need to see on which side of the candle the TriggerPip value was met. As you can see, this is a counter trend method as when price is rising, we are selling and buying when price is falling.
We are will be capitalizing on the retracing moves to make some profit. Look at this illustration below for a clear idea about the positions details. I hope that that illustration above can help you in understanding the logics behind the buy and the sell. A point that should be noted carefully is that Do not get distracted by the other candles and follow this system mechanically.
Do not under-estimate this method due to its simplicity The last part of this system is the setting of the stoploss and takeprofit levels and I should be writing on it in the next part.
Good luck so far After we have determine a trade signal, it is time to put the Stoploss as it will help in decreasing our risk and improve the consistency of the system. Now the last thing that we need to set is the TakeProfit an it is very important as well. The TakeProfit also is not complicated at all to calculate. So in our example, the TP will be 50 pips above the buy or 50 pips below the sell. I have come to the end of this explanation and I hope I have covered all the main rules for the strategy.
Please take note that I have come up with this trading method all by myself and it has been shared here on fxfisherman exclusively. You should also take note that I do not myself use this method as I just came up with these trading ideas recently and I am still experimenting on it. I am sure many of you will doubt this method due to its simplicity and honestly, you should not be thinking in this way. The simplest are always the best.
Take some time and study this system. You are free to experiment and tweak it to your own liking as well. Suggestions and improvement ideas are welcomed. Would like to hear back from you, especially if you are practicing it on a demo. The system is not easy to backtest at all and most of the testing should be done in the real market or through a trading simulator.
Good luck and all the best. I have finished writing and detailing this trading method. Please take some time to read and study it. Hope the fxfishermen will benefit from this method. Sorry but you are really pathetic Make the EA yourself and test it out Show your test results if you are truthful! You have not even tested the system and you are already making statute comments Are you out of your head? Bossxero made a good point.
Oil, you claimed the system didn't work without giving any proof at all. You even claimed you tested it as an EA. But then you contracted yourself with "not spend more time writing EAS I know won't be of any use to me afterwards. Two similar systems don't mean they will perform the same way. You probably know than more than I do that even a minor change in parameters of the same system alone will lead to a different outcome, let alone the difference of a whole bunch of logics.
Seems you got a crystal ball out there Or as you say If you took time to read the post well rather than jumping to your 'miraculous' conclusions, then you should have read that this is a trading IDEA and it is open to improvement You are deceiving neither me or anyone here As many already told you, you better grow up Thanks a lot for sharing Bossxero - I intend to write an EA for it.
Will share it in several days. Does anyone have results to post? Im just getting started so will probably have something results, not the EA by end of week.
And just asking, when everyone talks of the EA, if I happen to have the automated Excel version following it, how do I enter those formulae into the EA, coz the EA is all I intend to sit down on mql4 later when I DO have time.
Easier in Excel, unless someone helps me fit which figures into the EA maker? To add comments, please log in or register. Calculate the Average height pip height of the last 10 Daily candles. Get an EA and test it. XRange, have you finished the EA?More...