Swap Trading System | Foreign exchange indicator download - MT4/MT5 resources
Hi everyone I would like to share with you an interesting long term strategy that I found on another forum about swap trading.
It is very simple as it does not require any knowledge about markets, indicators, technical or fundamental analysis
The idea behind this system is to take the broker's positive swap interest earnings and only trade in that direction.
In fact, as you should know, when we hold a position for the long term, we can see the swap value in our account, which can be positive or negative, depending on the broker's rules. For example, if we buy GBPJPY, the fast broker will earn positive interest (paid to us) while the seller will earn negative interest (paid to them).
Therefore, our system will only trade accordingly based on the positive interest paid by our broker for that currency pair, which in the case of FB will be the buyer of GBPJPY.
Here are the simple rules:
1) Open the daily chart and select the best currency pair that the broker pays with positive interest (a good pair might be GBPJPY)
2) Without knowing anything about Forex, just use 1% equity to open a position on the positive side. Now we only need to care about the entry price.
3) If the price goes against us by a fixed number of pips compared to the entry price (where X can be 100 or 200 pips), then we will open another position based on 1% of the actual equity.
4) Step 3) will be repeated until the price goes against us, increasing the position every time the price drops X points from the entry price.
5) If the price moves in the direction of our X point, then we will close all open positions and cash out the proceeds from the swap interest and spread
6) After all positions are closed, we iterate step 2) again
As you can see, using this system, our account will grow slowly but steadily, since we will benefit from positive swaps and pips when we close all positions.
In fact, if after placing the first trade, the price will move in our direction, then we will cash out 100 (or 200) pips plus interest on the spread, depending on how many days the order was opened. On the other hand, if the price goes against us, we will add a new position in order to increase our equity account due to the spread profit and wait for the price to return to the entry price.
In both cases we will obtain
Any comments, ideas, constructive criticism to improve it would be greatly appreciated
Examples to better understand switching systems:
http://img442.imageshack.us/img442/1...psystemqo7.jpg
In the attachment you can find a small EA that simulates this system
It is very simple as it does not require any knowledge about markets, indicators, technical or fundamental analysis
The idea behind this system is to take the broker's positive swap interest earnings and only trade in that direction.
In fact, as you should know, when we hold a position for the long term, we can see the swap value in our account, which can be positive or negative, depending on the broker's rules. For example, if we buy GBPJPY, the fast broker will earn positive interest (paid to us) while the seller will earn negative interest (paid to them).
Therefore, our system will only trade accordingly based on the positive interest paid by our broker for that currency pair, which in the case of FB will be the buyer of GBPJPY.
Here are the simple rules:
1) Open the daily chart and select the best currency pair that the broker pays with positive interest (a good pair might be GBPJPY)
2) Without knowing anything about Forex, just use 1% equity to open a position on the positive side. Now we only need to care about the entry price.
3) If the price goes against us by a fixed number of pips compared to the entry price (where X can be 100 or 200 pips), then we will open another position based on 1% of the actual equity.
4) Step 3) will be repeated until the price goes against us, increasing the position every time the price drops X points from the entry price.
5) If the price moves in the direction of our X point, then we will close all open positions and cash out the proceeds from the swap interest and spread
6) After all positions are closed, we iterate step 2) again
As you can see, using this system, our account will grow slowly but steadily, since we will benefit from positive swaps and pips when we close all positions.
In fact, if after placing the first trade, the price will move in our direction, then we will cash out 100 (or 200) pips plus interest on the spread, depending on how many days the order was opened. On the other hand, if the price goes against us, we will add a new position in order to increase our equity account due to the spread profit and wait for the price to return to the entry price.
In both cases we will obtain
Any comments, ideas, constructive criticism to improve it would be greatly appreciated
Examples to better understand switching systems:
http://img442.imageshack.us/img442/1...psystemqo7.jpg
In the attachment you can find a small EA that simulates this system
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