This is an idea that I've been exploring. It's a product of what I have learnt
and what I believe to be true so far in my journey into forex.
I have not traded live yet and will not do so until I can keep a demo account
going for a while. I have found this very difficult as i don't seem to be able to
stick to a set of rules.
I have discovered this and quite a few other things about myself so far and
have been trying to develop a system based on my personality, beliefs and
lifestyle.
Please remember that these are my beliefs and thoughts.
They change and develop all the time and in no way am i asking you to agree. Please comment and critisize.
My thought process has been as follows.
BELIEFS
I have read a lot of information about pretty much everything here at FF and have tried to distill from it a few truths about forex (if there are any)
This is what i am left with.
The only thing that price seems to respect are significant levels, whether you call this support, resistance, PPZ's, previous highds/lows.
Price reacts to these but its pretty difficult to predict how, will it bounce or
break?
Smaller time frames expose themselves more to the noise of forex and also the costs (spread) become more significant. On the other hand if this can be managed then scalping can have a number of benefits, mainly that of growing your account quicker.
Trends are great but they can and usually do end as soon as you join them.
Peope say let your winners run and cut losers short, how do you know a
winner?, you cant predict the future.
The weakest point of any method is human intervention or emotions, wether it be flexing your money management rules or 'knowing' were the price is going.
I think another word for 'discretion' is 'guessing'. If you can not quantify any part of your sytem it is basically guesswork.
Don't get me wrong, some traders are very good and cosistent guessers - im not.
The only way to win over time is to find an edge, stick to the rules which give you that edge, have belief in that system and then exploit it.
I believe that an edge is born through probability. If you can prove that
something happens more often than not, over an acceptably long period of
time, with accuracy then maybe, just maybe you may have found one.
System Theory.
O.k. so now you know where my mindset is i'm going to tell you how i'm trying to trade.
I say trying because this system needs considerable refinement.
What i want is your comments to see if its worth me pursuing this idea or not
I suppose this system is really an offspring from the James16 thread so much credit is due there.
It basically uses price action in the form of pinbars to trigger trades.
A pinbar shows price being rejected form a support resistance line.
James16 embraces this price action along with outside bars and double bar
high/lows with a lower/higher close, tries to weave in some other reasons to take the trade such as fib levels, moving averages etc. and then uses
discretion to make the trade.
I believe that this method works but am not convinced about certain aspects of it. Mainly the moving averages and the frequency of trades.
I mean you can use any m.a. value you want from 1 to 1000, at some point
its going to look relevent to something. And man, i must be really impatient or something but trades are so infrequent on the daily timeframe that i cant
stand it, and it would take even longer to prove it.
Maybe this is a big weakness for me, maybe this method will gravitate to the longer tf's, but if there's any way possible of navigating the volatile waters of the H1 then id like to try. As i said earlier, scalping has its benefits
I think that the main thing that i don't like is the discretion side of it. i really
feel much more comfortable with quantifiable decisions, would i be any more
successfull trying to hand pick trades than i would trading everything that met my quantifiable parameters? This is what im trying to find out.
Indicator
I am only using one indicator and it is attached to this post. It is the
PriceAction AHA 0_2 by hua ai.
I have it set up to just recognise pin formations. I don't like staring at the
screen because that's were the discretion creeps in. When the indicator
alerts, i go to the screen and see if a pin bar has formed
This indicator is adjustable but it seems to have a mind of it's own.
I have tried to look at the code but cant work it out. Some times it misses out perfect pins that would have been sccussful and there are other ways that i would like to alter its behaviour.
So when a pin is formed i enter on the open of the next candle and place my stoploss at the top or bottom of ther pin. The TP is then placed an equal distance away.
Its as simple as that. There is nothing to think about other than if the pin is
big enough.
What i mean by that is, as the SL and TP get smaller, the spread becomes
significant and reduces the risk reward to unacceptable levels.
Basically every pair with its spread ahs a minimum size bar that i will trade
before it becoimes too risky.
Just using this very basic system in backtests it has proven to have a
win/loss ratio of 2:1 or 70% with a risk reward of no less than 1: 3/4
This is for all timeframes H1 and above and uses around 100 sets of data in each test
I have yet to find a pair or timeframe that does anything less than break even.
I have thought about other TP levels but what i want is a 100% accurate backtest which i can do visually with a set tp.
There may be many ways to advance this method:
Define and quantify what makes a good pin bar, and be able to input these variables into an indicator/ea
back test with all these variables to find the most favourable conditions
Dont know about filters - don't really want to get into MACD RSI etc i think the simplicity of this system is the key.
Heres a chart to show visually what i am doing and then the last 10 days on e/u H1
By the way does anyone have any advice on posting charts, this is new to me and its difficult to know what size to use. Also does everyone use paint to mark them? how do i paste them to my post
Any way thanks for reading this and please comment, i would really love to hear your opinions and thoughts
and what I believe to be true so far in my journey into forex.
I have not traded live yet and will not do so until I can keep a demo account
going for a while. I have found this very difficult as i don't seem to be able to
stick to a set of rules.
I have discovered this and quite a few other things about myself so far and
have been trying to develop a system based on my personality, beliefs and
lifestyle.
Please remember that these are my beliefs and thoughts.
They change and develop all the time and in no way am i asking you to agree. Please comment and critisize.
My thought process has been as follows.
BELIEFS
I have read a lot of information about pretty much everything here at FF and have tried to distill from it a few truths about forex (if there are any)
This is what i am left with.
The only thing that price seems to respect are significant levels, whether you call this support, resistance, PPZ's, previous highds/lows.
Price reacts to these but its pretty difficult to predict how, will it bounce or
break?
Smaller time frames expose themselves more to the noise of forex and also the costs (spread) become more significant. On the other hand if this can be managed then scalping can have a number of benefits, mainly that of growing your account quicker.
Trends are great but they can and usually do end as soon as you join them.
Peope say let your winners run and cut losers short, how do you know a
winner?, you cant predict the future.
The weakest point of any method is human intervention or emotions, wether it be flexing your money management rules or 'knowing' were the price is going.
I think another word for 'discretion' is 'guessing'. If you can not quantify any part of your sytem it is basically guesswork.
Don't get me wrong, some traders are very good and cosistent guessers - im not.
The only way to win over time is to find an edge, stick to the rules which give you that edge, have belief in that system and then exploit it.
I believe that an edge is born through probability. If you can prove that
something happens more often than not, over an acceptably long period of
time, with accuracy then maybe, just maybe you may have found one.
System Theory.
O.k. so now you know where my mindset is i'm going to tell you how i'm trying to trade.
I say trying because this system needs considerable refinement.
What i want is your comments to see if its worth me pursuing this idea or not
I suppose this system is really an offspring from the James16 thread so much credit is due there.
It basically uses price action in the form of pinbars to trigger trades.
A pinbar shows price being rejected form a support resistance line.
James16 embraces this price action along with outside bars and double bar
high/lows with a lower/higher close, tries to weave in some other reasons to take the trade such as fib levels, moving averages etc. and then uses
discretion to make the trade.
I believe that this method works but am not convinced about certain aspects of it. Mainly the moving averages and the frequency of trades.
I mean you can use any m.a. value you want from 1 to 1000, at some point
its going to look relevent to something. And man, i must be really impatient or something but trades are so infrequent on the daily timeframe that i cant
stand it, and it would take even longer to prove it.
Maybe this is a big weakness for me, maybe this method will gravitate to the longer tf's, but if there's any way possible of navigating the volatile waters of the H1 then id like to try. As i said earlier, scalping has its benefits
I think that the main thing that i don't like is the discretion side of it. i really
feel much more comfortable with quantifiable decisions, would i be any more
successfull trying to hand pick trades than i would trading everything that met my quantifiable parameters? This is what im trying to find out.
Indicator
I am only using one indicator and it is attached to this post. It is the
PriceAction AHA 0_2 by hua ai.
I have it set up to just recognise pin formations. I don't like staring at the
screen because that's were the discretion creeps in. When the indicator
alerts, i go to the screen and see if a pin bar has formed
This indicator is adjustable but it seems to have a mind of it's own.
I have tried to look at the code but cant work it out. Some times it misses out perfect pins that would have been sccussful and there are other ways that i would like to alter its behaviour.
So when a pin is formed i enter on the open of the next candle and place my stoploss at the top or bottom of ther pin. The TP is then placed an equal distance away.
Its as simple as that. There is nothing to think about other than if the pin is
big enough.
What i mean by that is, as the SL and TP get smaller, the spread becomes
significant and reduces the risk reward to unacceptable levels.
Basically every pair with its spread ahs a minimum size bar that i will trade
before it becoimes too risky.
Just using this very basic system in backtests it has proven to have a
win/loss ratio of 2:1 or 70% with a risk reward of no less than 1: 3/4
This is for all timeframes H1 and above and uses around 100 sets of data in each test
I have yet to find a pair or timeframe that does anything less than break even.
I have thought about other TP levels but what i want is a 100% accurate backtest which i can do visually with a set tp.
There may be many ways to advance this method:
Define and quantify what makes a good pin bar, and be able to input these variables into an indicator/ea
back test with all these variables to find the most favourable conditions
Dont know about filters - don't really want to get into MACD RSI etc i think the simplicity of this system is the key.
Heres a chart to show visually what i am doing and then the last 10 days on e/u H1
By the way does anyone have any advice on posting charts, this is new to me and its difficult to know what size to use. Also does everyone use paint to mark them? how do i paste them to my post
Any way thanks for reading this and please comment, i would really love to hear your opinions and thoughts
Attached File(s)
PriceAction AHA 0_2.mq4
51 KB
|
493 downloads
Price_Action_1.1.ex4
24 KB
|
424 downloads