SAR system based on QQE Adv and MACD Platinum (SAR system based on QQE Adv and MACD Pla)
I came up with some trading ideas that might work. It's still early days, I've only done some basic manual backtesting on the 4 hour and daily charts, and it seems to have some potential. If it does work, it's certainly a good candidate for EA. This is a simple system that may need some tweaking, as currently I'm just throwing this idea out to get other people's opinions.
I'm working on a system where you basically stay in the trade as long as the indicator tells you to do so. When the indicator changes direction, you open a trade in the new direction and close the previous trade. Now, based on how your previous trade went, the position size for this new trade will be determined. Then, when the indicator generates a new signal in the opposite direction, you will open a new trade in the new direction and size your position again based on what happened before. It will become clearer soon with examples. In short, you will always be in the market, it's just that the position size changes based on your profit/loss situation. These trades will also be executed sequentially, either achieving a profit or breaking even. If there are continuous losses, then our account will be bankrupt. I cannot stress enough the importance of money management.
I will use QQE Adv and MACD Platinum indicators as trading signals. You can really use any metric that works for you, but these are the ones I know best. Watch LACW 1 and 2 videos on my YouTube channel called TradersKey. Additionally, a video called JAGfx will also help me with how to interpret these indicators.
Basically the two need to be aligned to produce a valid signal. Also wait until the current candle closes so that the signal is actually confirmed and all new trades are placed when the next candle opens. It doesn't matter which time frame you use here. I do prefer 4 hour charts as they tend to suit my lifestyle and have some nice trends without too much noise.
I was considering using a martingale type system for position sizing, but I'm leaning towards the Fibonacci sequence now as it seems less brutal. For those who don't know the order, it's 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, etc. Just add the last two numbers to get the next number in the sequence.
Here's my theory on how it should work. Let's say I start with a buy signal. Open a 1x long trade at the open of the next candle to start the sequence and let the trade run until a new short signal appears. Long trades either end in profit, breakeven, or loss. If it's profitable, then that's the end of the sequence because you take profit and run it, and don't think about the trade anymore. The same applies if the result is break-even. So far so simple. If it is a loss, the sequence will continue with a new sell trade, which according to fibs will also be 1x units. The losses on the long side are recorded and then you have to do some math. To be clear, we are not hedging here, so we are always only taking one trade in one direction.
Now, since we have more than one trade in the sequence, the best outcome we are looking for is to end the sequence with an overall breakeven result. Therefore, we will take the loss of the previous long trade and calculate where the new short trade must go to achieve an overall break-even result. If that price is reached, the trade is closed, the sequence is now complete, and the overall result is break-even. At the same time, another short trade of 1x units is opened to start a new sequence. So far so easy.
Now, if in the example above, if the price of the short trade does not reach the desired overall breakeven price, but bounces back, generating a new buy signal, then the sell trade will be closed immediately and a new buy order of 2x units will be opened, since this is the third trade in the sequence (1, 1, 2). You can calculate the profit or loss from a previous short trade and add it to or subtract it from the loss from a previous long trade. This will give you a new number and a new target for your new long trade. Please note that since this trade is for 2x units you will need to do the math to figure out your target as the previous two trade results were based on 1x units. If this long trade subsequently achieves the desired goal, the entire sequence will end with an overall break-even result. We will open a brand new long trade of 1x unit at the same price to start a new trading sequence.
If the long trade does not reach this target and a new sell signal appears, the long trade will be closed with profit or loss and a new short trade of 3x units will be opened. Do all the math again on the previous trades in the sequence and calculate the new breakeven target.
There will be many break-even results, as winners only emerge when the sequence lasts only one trade. This may be from the time a new signal is first generated until a reversal occurs, or it may be from the time a new trade is opened immediately after reaching the breakeven target until the reversal occurs. I was considering not taking any new trades once I hit my breakeven target and instead waiting for the next new clean signal, but I did notice that the market would tend to take off and leave me behind, so the idea was to start a new sequence immediately. Again, this keeps us in the industry.
Not sure if something like this would work with smaller timeframes, especially for doing math all the time. EA will definitely help in this regard. The indicators I use are pretty accurate most of the time and the longer time frames in forex tend to trend very well and you end up with big moves that recoup your losses and some.
This is just an idea at the moment, I've only done manual backtesting on quite a few daily and 4 hourly charts of major currency pairs. There are some very consistent results, especially on the 4-hour chart. Daily charts tend to show long periods of time before breakeven results occur, which will test the patience of many traders. Everyone loves to get in on the action!
If interested, I'll make a YouTube video that should help clarify some things, as I know it's difficult to read an explanation of a trading method and imagine what I'm talking about. This type of approach can be used with any metric you choose, so it's not limited to the metric I specified. I was actually thinking that you might be able to use the same approach for multiple time frames on the same currency pair using different indicators, which would give you a basket of simultaneous trades that would ultimately give you some hedging protection when the market is undecided, but a big winner when the market breaks out. Just thinking out loud here.
As always, money management is crucial if you are going to trade with an approach like this, so be aware. Looking forward to any feedback. cheers. jim
I'm working on a system where you basically stay in the trade as long as the indicator tells you to do so. When the indicator changes direction, you open a trade in the new direction and close the previous trade. Now, based on how your previous trade went, the position size for this new trade will be determined. Then, when the indicator generates a new signal in the opposite direction, you will open a new trade in the new direction and size your position again based on what happened before. It will become clearer soon with examples. In short, you will always be in the market, it's just that the position size changes based on your profit/loss situation. These trades will also be executed sequentially, either achieving a profit or breaking even. If there are continuous losses, then our account will be bankrupt. I cannot stress enough the importance of money management.
I will use QQE Adv and MACD Platinum indicators as trading signals. You can really use any metric that works for you, but these are the ones I know best. Watch LACW 1 and 2 videos on my YouTube channel called TradersKey. Additionally, a video called JAGfx will also help me with how to interpret these indicators.
Basically the two need to be aligned to produce a valid signal. Also wait until the current candle closes so that the signal is actually confirmed and all new trades are placed when the next candle opens. It doesn't matter which time frame you use here. I do prefer 4 hour charts as they tend to suit my lifestyle and have some nice trends without too much noise.
I was considering using a martingale type system for position sizing, but I'm leaning towards the Fibonacci sequence now as it seems less brutal. For those who don't know the order, it's 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, etc. Just add the last two numbers to get the next number in the sequence.
Here's my theory on how it should work. Let's say I start with a buy signal. Open a 1x long trade at the open of the next candle to start the sequence and let the trade run until a new short signal appears. Long trades either end in profit, breakeven, or loss. If it's profitable, then that's the end of the sequence because you take profit and run it, and don't think about the trade anymore. The same applies if the result is break-even. So far so simple. If it is a loss, the sequence will continue with a new sell trade, which according to fibs will also be 1x units. The losses on the long side are recorded and then you have to do some math. To be clear, we are not hedging here, so we are always only taking one trade in one direction.
Now, since we have more than one trade in the sequence, the best outcome we are looking for is to end the sequence with an overall breakeven result. Therefore, we will take the loss of the previous long trade and calculate where the new short trade must go to achieve an overall break-even result. If that price is reached, the trade is closed, the sequence is now complete, and the overall result is break-even. At the same time, another short trade of 1x units is opened to start a new sequence. So far so easy.
Now, if in the example above, if the price of the short trade does not reach the desired overall breakeven price, but bounces back, generating a new buy signal, then the sell trade will be closed immediately and a new buy order of 2x units will be opened, since this is the third trade in the sequence (1, 1, 2). You can calculate the profit or loss from a previous short trade and add it to or subtract it from the loss from a previous long trade. This will give you a new number and a new target for your new long trade. Please note that since this trade is for 2x units you will need to do the math to figure out your target as the previous two trade results were based on 1x units. If this long trade subsequently achieves the desired goal, the entire sequence will end with an overall break-even result. We will open a brand new long trade of 1x unit at the same price to start a new trading sequence.
If the long trade does not reach this target and a new sell signal appears, the long trade will be closed with profit or loss and a new short trade of 3x units will be opened. Do all the math again on the previous trades in the sequence and calculate the new breakeven target.
There will be many break-even results, as winners only emerge when the sequence lasts only one trade. This may be from the time a new signal is first generated until a reversal occurs, or it may be from the time a new trade is opened immediately after reaching the breakeven target until the reversal occurs. I was considering not taking any new trades once I hit my breakeven target and instead waiting for the next new clean signal, but I did notice that the market would tend to take off and leave me behind, so the idea was to start a new sequence immediately. Again, this keeps us in the industry.
Not sure if something like this would work with smaller timeframes, especially for doing math all the time. EA will definitely help in this regard. The indicators I use are pretty accurate most of the time and the longer time frames in forex tend to trend very well and you end up with big moves that recoup your losses and some.
This is just an idea at the moment, I've only done manual backtesting on quite a few daily and 4 hourly charts of major currency pairs. There are some very consistent results, especially on the 4-hour chart. Daily charts tend to show long periods of time before breakeven results occur, which will test the patience of many traders. Everyone loves to get in on the action!
If interested, I'll make a YouTube video that should help clarify some things, as I know it's difficult to read an explanation of a trading method and imagine what I'm talking about. This type of approach can be used with any metric you choose, so it's not limited to the metric I specified. I was actually thinking that you might be able to use the same approach for multiple time frames on the same currency pair using different indicators, which would give you a basket of simultaneous trades that would ultimately give you some hedging protection when the market is undecided, but a big winner when the market breaks out. Just thinking out loud here.
As always, money management is crucial if you are going to trade with an approach like this, so be aware. Looking forward to any feedback. cheers. jim
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