QAM Trading Strategy | Foreign Exchange EA Download- MT4/MT5 Resources
Planner*
Due to popular demand and some requests from interested traders I will outline how I trade QAM
Original QUANTUM LONDON TRADING (QLT) thread by Can be found here:
http://www.forexfactory.com/showthread.php?t=551382 (original idea based on Frankfurt/London trading hours).
Note: Trading the Q method in FF and London sessions is certainly possible (I know because I have been trading it for several months like everyone else), but it requires a sizeable bank deposit, i.e. a larger trading account balance. Not all traders have access to larger accounts, and more than $10,000 is often required to trade during this trading window. So, in order to help traders who have or just want to trade the Q method with a smaller account balance, I decided to look into how to achieve this. By choosing so-called "turtle pairs", which are currency pairs that typically have very small ADRs and are often traded within relatively tight spreads, I have found that it is possible to start trading with a smaller account balance and that large DDs are less likely to occur (but please note that large DDs can and will occur even in turtle pairs, so traders must always be prepared, and this is where risk management comes in). This article will be a continuation of that journey and will hopefully outline many of the pitfalls that once existed, provide additional trading knowledge, and ultimately grow a smaller (say $1000) account into a larger account with a reasonable weekly net profit percentage and respectable DD, without risking the entire account in the process.
There are a few things to note about the QAM trading strategy:
1.QAM is but just an additional strategy that allocates a small portion of my trading account;
2. QAM should always be considered a relatively high risk trading strategy as it thrives on generating retracements;
3. QAM can be applied to a variety of currency pairs, commodities and indices;
4. QAM can trade within multiple time frames;
5. QAM can trade in multiple different trading windows; and
6. There is no limit to the number of ways QAM can be traded, adapted or extended.
7**. Importantly, my approach to most QAM strategies is discretionary, meaning that the trader's decision-making goes well beyond opening a long trade when a blue box appears and a short trade when a red box appears!
** This happens sometimes, but my idea with QAM is to close small trading cycles at appropriate times as a means of limiting large DDs as much as possible.
The main points that I focus on when trading QAM can be briefly summarized as follows (they will be thoroughly expanded on throughout the thread):
1. Take advantage of existing typical Asian session trading patterns, which means known price retracements;
2. The price may pull back to the daily opening area;
3. A slight price pullback to known support and resistance areas may end the trading cycle;
4. Understand the ADR, ATR and other important factors of a specific currency pair;
5. The price spread of the trading pair (broker spreads and broker selection need to be considered, because high spreads will affect the effective end of the cycle, that is, the ask and bid prices relative to short entry and long entry);
6. Volatility and possible trading range within a given trading window;
7. Set realistic global stops for each trade or trading cycle to ensure maximum risk is never exceeded;
8. Develop practical weekly, monthly and annual trading plans;
9. Establish a reasonable weekly net profit % at a certain DD initially in the demo, and then fine-tune it for a real trading account;
10. Learn to observe how prices generally move on the chart, paying attention to the S+R area;
11. Understand strong trend developments and how to actively manage trading cycles to minimize losses
12. Perception of news and its typical impact on a specific currency pair (usually highly variable, but not always); and
13. Many other transaction factors (if required).
template
The QAM system can actually be traded using Quantum indicators on "naked" charts, provided the trader has a strong affinity for price action, support and resistance areas, psychological levels (round numbers 000 and 50), daily opening prices, knowledge of ADR, ATR, spreads, average trading window spread ranges over several months, trading window start and end times, and is generally familiar with how currency pairs typically move during the week!
If you did everything correctly, it should look like the image below:
Note: The template (tpl) is only available for the MT4 trading platform at this stage, it is used here simply because it is the most popular platform among forum traders (other platforms can, are and will perform better and/or worse than MT4!)
index
The included metrics are as follows, with due acknowledgment to the original coders:
Please do not post charts in this post that contain "lagging" indicators, including some of the following:
............etc.
NOTE: If you are not sure whether a certain metric can be posted to this thread, please ask before posting as it shows common courtesy.
[The CCI indicator (possibly an exception to the above rule) has proven useful in closing trading cycles, but certainly needs modification and is not really needed in any case].
trading pair
Initially only 2 currency pairs and EUR GBP will be traded due to their common "turtle" behavior.
Make the trade right from the start.
EURGBP will be traded at a later stage.
Notice:
Other currency pairs will also be traded in the future, including some commodities and indices.
time range
Will be used initially but other TFs will be added later.
trading window
The initial trading hours during the Asian session are 6 hours
Start time = Tokyo Open
End time = Frankfurt Open
Notice:
The trading start time may be later changed to 1 hour before the Tokyo opening, but the trading end time will not be changed and it is best to complete the trading cycle/trade before the Frankfurt opening.
trading cycle
Minimum 1 cycle to maximum 3 cycles
Notice:
Initially, periods are limited to a maximum of 2 trading periods per trading day, unless the second trading period is completed within the designated trading window period (ie, a few hours before the FF market opens). The completion of the trading cycle can be done manually before the opposite signal arrives, at the time of the opposite signal, or managed by the EA when closing the position.
Number of transactions per cycle
Determined based on account trading size, lot size per trade, global stop loss position and overall risk parameters.
trade explorer
I recommend that serious traders use a trade explorer as a means of confirming trade entries and closings, including collecting valuable trade analysis data that will highlight important parameters such as net gain percentage, drawdowns, and many other factors.
Demo TE - While it is voluntary for traders to provide a TE, I will provide one and hope others will participate, especially during the first phase which is a demo only! Here you can view any bad trades etc. and discuss them in the post in order to improve your trading results.
Real-time TE will be used for one of my trading accounts, other traders are also welcome to participate voluntarily.
More information
I prefer coaching traders rather than doing everything for them, so do your homework and try to figure it out yourself first! If you're still confused, please post a question or message me privately.
I will upload a basic template and some informative indicators, but I hope traders will be forward thinking enough to search for other useful informative tools available for free on the Forexfactory forum and elsewhere.
Steps required:
1. Open the M1 chart of EURCHF and attach the given template (including all indicators)
2. Determine the ADR for the EURO/CHF currency pair for the last month (initially only 20 days will be used, but this may be modified later), you will find this ADR in blue text at the top center of the chart provided by the ADR indicator.
3. Determine the ADR for a given currency pair in the trading window.
(An Excel spreadsheet can be used to continuously record these ranges at the end of each trading day).
4. Take a look back at the chart of the EUROCHF currency pair and become familiar with the typical daily movements from one trading day to the next and from the next trading day to the hour, and note any repeating patterns if any such patterns exist! This is to help you develop an appreciation and expectation of the pair's typical moves.
5. Be prepared to participate in the trading session when the market opens!
Notice:
There is a lot to cover regarding the many related topics that form part of this method of trading, but the basic concepts are very simple. The discretionary part of a trader's mind is far more important, they know when to let certain cycles run while shutting down others. Ultimately, you are not doing anything wrong if you close a position too early in a trading cycle because profits are profits, but hopefully the more familiar you are with how prices typically behave on a particular currency pair, the more profit you will be able to make by closing your positions in better areas. Don't worry too much, because no one has the ability to close a perfect trading cycle, because it is impossible, so what we hope to achieve here is to make reasonable profits without bringing unnecessary DD!
I hope this thread is both useful and interesting, so I hope you all enjoy the journey!
good deal,
Planner ..........
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