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London Trade News

Introduction

I had a vague idea of ​​where London was, somewhere in England, United Kingdom. I also know that when traders out there make trades, the market changes. That's why I want to trade with them. This article is a fairly comprehensive description of the trading method I'm currently working on. I wouldn't say it's a simple strategy, just that it's being implemented. This is a long article, over 1,600 words.

I'm not going to talk about who I am or where I've been or anything about David Copperfield, I'm just going to say that I've been working in this industry for over eight years and I'm in my 20s.

The simple goal of this theme is to create a tradable, profitable system. I hope this article documents the birth, growth, mutation, and evolution of a strategy from its infancy to becoming a lethal warrior in the marketplace.

This system is my idea, but a lot of the tools I use are free on the web. The concepts I've brought together have been discussed extensively, and what I've done is take all of them and form them into something easy to understand and benefit from.

As with any system, I will state my observations, assumptions, and key points that will go into developing the system . I will then give entry and exit rules, followed by my position sizing and money management techniques.

The end product should be a trading method that instills confidence in traders; an execution plan that traders can follow without fear of losing money, knowing full well that losses are inevitable, but the system will eventually make money .

I will refer to many authors over the life of this article, hoping this will inspire traders to read widely and gather a wealth of information. I hope this article makes us better learners and better traders.

observe

Pairs and charts

I took a look at the 30 minute GBP/USD chart over the past few months

index
Session (auto) v 1.7
5EMA
SR_Regional Bollinger Band(34,3)
TDI red and green(26,2,26,2,2,42,2)
Stochastic indicator(13,3,4)
MACD (12,26,14)

I have been looking at this chart for a while and I think I saw a trading opportunity at the London open or within two hours of the open.

I noticed that the market's sustained moves immediately after opening were consistent with the current trend identified by the system.

hypothesis

London session traders respect the trend and move the market at least 40 points in the direction of the trend at least 80% of the time after the London open

Measure assumptions
I have attached a pdf file showing my observations over the past three months.

Development system

Everything comes at a price. This strategy is free for all members and guests of Forexfactory, but not for me. It cost me countless hours of charting time and accounts. I hope the cost is worth it.

basic knowledge

trend
. You must trade in the direction of the overall trend. Every other day, the market will move in the direction of the major trend, and that move will be our bread and butter. The system is designed to capture these movements.

Of the many ways to determine overall trends, this is a simple technique I use. If we break above the previous days high on the daily chart, we are in an uptrend and vice versa. certainly

I also focus on previous days and lows as they act as support and resistance.

I've attached a template file to this thread to show you how I view my chart.

I also use Ichimoku clouds, but just to get a different perspective and clear my head.

index

If we use a deviation of 3, Bollinger Bands contain over 99% of price movements. So I used BB set to 34 and 3. This allows me to look at overbought and oversold areas along with stochastics and avoid overbought and oversold areas. .

I respect the Fibonacci sequence and you will notice that I use Fibonacci numbers a lot in my indicator setup and use Fibonacci retracements as targets.

MACD as well as Stochastic are optimized for this strategy

TDI Red Green is part of this system as we only trade in the direction of this indicator.

Since we are day traders, we have support from the session indicator and the support-resistance indicator, so we don't get too optimistic.

concept

Unless a trader is behind every trade, they will find it difficult to maintain the position no matter what the conditions. They may exit with losses when they might have been profitable, make little profit, or hold on to losses for too long. Unwavering Confidence Traders need to trust a system. This confidence can be achieved by having a clear system that details every possible situation and how to respond. This way, traders can rest easy knowing that all contingencies have been taken care of.

I can't currently account for all the contingencies of this plan, which is why I opened this thread; so I can further test this system and figure out those unique situations and the appropriate reactions to them.

However, here is the initial concept: after the London open, GBP/USD moved in line with the current trend. Notice I said a way and not a direction. This is because markets are not linear. So you'll see me make some counter-trend trades that are consistent with the overall trend.

It's important that I use a session indicator in the template. This system promotes trading during the London session, but good opportunities may arise during other sessions as well. Second, while I advocate opening trades, sometimes there is no signal because the market may be too far from the mean. The best thing to do is to wait for a better opportunity.

Trading will mostly close during the trading session, but this is not a hard and fast rule. Some trades will extend into the New York session, and some even overnight.

I respect technical analysis and consider myself a technical analyst because I believe there is hope for those who practice technical analysis. It is for this reason that I can trade using the signals generated by these indicators and analysis and be confident that I am making the right decision. This belief is key to my trading.

I love trading divergences and will be constantly watching for divergences on the stochastic indicator.

1. TDI, MA Crossover and MACD are the backbone of this system. MA crosses tell us the intraday trend. TDI tells us the direction of the trade. MACD and stochastics get us in and out quickly.
2. Since BB covers over 99% of price movements, we can tell when prices have gone too far for the day. Also keep in mind that prices fluctuate on average 70% of the time. The BB is also a volatility indicator. When the market has sufficient volume, we will be able to enter.
3. We will also trade the divergence of the stochastic indicator.
4. We want to trade the 34 SMA direction. We also want to be as close to this average as possible so that we get the best return; if we're wrong, the loss is small; if we're right, we get the maximum gain.
5. A breakout of the previous days' highs or lows could trigger a signal targeting the 161.8 Fib level in the previous days' range.



1. TDI direction
2. MACD signal line direction
3. 34 SMA direction
4. Along the MA cross direction.



We hope to open trading in London. We want to trade with the above setup. We want to trade in the direction of these setups as close to the SMA or support and resistance levels as possible.

We may also want to trade in the direction of these setups, as close to the BB bands as possible, but in the opposite direction. So if all setups are to the upside, we may want to buy in the lower range.

Moving average crossovers are an excellent trigger point.

We may also enter a trade if the highs from the previous days are broken.

These triggers will be listed over time as we continue forward testing of the system



1. MA cross
2. TP or SL
3. TDI reverse
4. Fibonacci levels and support and resistance levels
5. MACD reverses to TP
( Edited for clearer information )

Position sizing and money management

This is a very important part of this trading system. Good position sizing must be determined based on your profile and risk appetite. I recommend using real leverage below 10:1.
I use fixed weekly fractions and the real leverage is 40:1. 10% of my account is 500:1.

I won't stay longer than my target which is between 30 to 120 depending on the situation.

Backtesting and forward testing

I have attached a copy of the visual backtest as a pdf file. This thread will be used to forward test the system through an additional trading browser.

Target

1. Develop a simple profitable trading system
2. Become a better trader and make more correct and disciplined decisions
3. to make some money
4. Create a good network of traders.

( Subsequent attachment )