Day Forex Strategy - The Schrodinger’s CatFriday, 18 August 2017 10:49
This trading strategy is narrowly focused. It’s based on one currency pair, GBP/USD. This method will attract market participants who cannot spend much time for trading. Within such a type of trading, it's enough to be on the market only 10-15 minutes a day.
- 17:00, the opening time of the market in New York is taken as the starting point. Obviously, the value of the pair may fluctuate relative to this mark by 75, 100 or more pips. Anyway, this level is accepted as the beginning and the end of the price movement.
- Following the rules of risk management correctly, opened positions will bring a good profit, if the price will return to the opening value, or move in the right direction by 75 pips. The probability of losses is quite low.
- Particular attention is paid to the correct Take Profits setting, with a favorable risk-to-profit ratio.
- According to statistics, in 8% of the market time, the price moves sharply, breaking through the 75, 100 and 150 pips, which can damage many open transactions. In 70% of cases, the price doesn’t move by more than 75 pips from the opening figure. In 20% of cases, the value of the asset may shift by 100 pips with a total volatility of not more than 150 pips. In only 2% of cases, the graph can move by 200 pips.
- The trend cannot be considered true until the price chart passes 50 pips from the opening level. After this, the probability that the graph will reach 75 increases significantly.
- Thus, it’s worth opening a sell order at the level of the maximum price values, setting buy orders at the minimum.
This tactic was developed for the profitable use of properties 1 and 2, avoiding the consequences of paragraphs 4 and 5.
You can open the positions from Sunday to Thursday. On Friday evening, you can only close the previous deals.
When the candlestick opens, pending orders are placed on the D1 timeframe, at the levels of 150, 100 and 75 pips from the opening value. Sell Limits are set above, Buy Limits - below the price.
Take Profits for the orders of 75 and 100 are equal to the opening price of the bar.
During a day, you need to check whether the Take Profits has worked, and delete the pending orders that didn’t trigger. If the Take Profits of the opened positions didn’t trigger, move them to a new opening price, plus 75 pips. If you want to trade more carefully, you can simply reduce the TP value.
New orders are placed on the levels of 150, 100 and 75.
Stop Losses of all the transactions are placed at 160 points from the initial value. Thus, for the orders of 150, this value is equal to 10, for the orders of 100 - to 60 pips, for deals at 75 - to 85 pips.
To build the grid simply, you can use the level_lines indicator. This tool works best on the H1 timeframe.
- Stop Loss and Take Profit orders should be shifted downwards from the round prices.
- If you want to increase the percentage of profitable trades, set pending orders only at levels of 150 and 100. However, in this case, the total number of trades will be reduced.
- Take Profits can be closed during the day. It’s enough to look at the chart twice a day - for the first time to open positions, and for the second time to check the chart before the American session.
- If the Take Profit doesn’t work for a few days, but your position is profitable - it’s better to take the profit and exit the market.
- Experienced traders can use the position locking, with no more than 4 transactions opened in the same direction on the chart.
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