Bringing Down the Forex House - MT4/MT5 Resources

Welcome to theForex House!

A little about me: Over the years I have developed my own trading plan that suits my personality (tweaking and researching through forums and websites, can't take credit for everything on the charts) and this is the hardest thing to do. The goal is to make trading emotionless and robotic. Easier said than done! http://forums.babypips.com/images/smilies/biggrin.gif Okay, let's talk about a trading strategy that I've been using with some success, if anyone wants to comment or if you have any useful ideas that you can contribute to a trading plan, feel free.

Let's get started!

Money Management: The most important part of any business plan is money management and how to overcome losses and wins. I risk no more than 3-5% per day, which means I risk about 1-2% per trade per day (2-3 losses in a row, that's me). You have to follow strict bankroll management rules or you won't last long in this game!

Indicator/Chart Setup: I have two 22-inch widescreen monitors that I use primarily for watching games on a daily basis. Here is the graph I ran:

EUR/USD:
GBP/USD:
USD/JPY:
EUR/JPY:
USD/CHF:
USD/CAD:
EUR/GBP:

(All charts have BANDS, 21 MA (HiLo), check image)

Strategy/Destroy Forex House :
In fact, this idea came to mind when I was watching the movie "21," about MIT students in the '90s who count cards and win millions of dollars in Las Vegas. As I watched, I couldn't help but absorb some of their ideas and apply them to the FX game. Basically in the movie they would play at blackjack tables in different casinos and the observers would be responsible for counting and once the count was good they would signal the "big" player to come to the table and play for big money (the player has the advantage). Simple!

So then I started asking myself how this idea could be applied in FX...

Forex market =
All my charts =
BB Band and MA (HiLo) =
=

By using the same card counting principles, you have to wait for the deck to heat up before you can put your hard-earned money into it. Same as FX, when showing a strong uptrend, you have to wait and be patient for long-term signals (i.e. the deck is hot) before committing money. Now the hardest part is controlling your emotions! It has to be done, you have to be a robot when trading and follow the system, otherwise you will be second guessing every trade and weakening your account.
Entry/Exit/Targets : Using this trading system, I basically trade almost 24/7, opening positions at any time (but 90% of my trades are between 9am and 4pm EST). I'll explain my thought process during trading:
1. Check all on-screen charts (listed above) to see if they are bearish or bullish (depending on BBands).
2. I use moving averages (HiLo) to check how extreme the current trading price is. Examples will be shown soon.
3. Write down each currency pair in my trading journal and whether I am going long or short.
4. Once I start trading, I use the BBand as my hard stop, usually around 80 pips, depending on the currency pair.
5. The most difficult thing in trading is not entering the market but exiting. That's where I'm very open to other ideas. Currently, I hold the position until I feel the PA will turn, for which I will keep a close eye on the price action of the MA. I will hold this position until it breaks above the HiLo MA. I'm not looking for real #s, I'm just trading what the market gives me. I feel like things get a little too mechanical when a trader is looking to get a certain number of pips from each trade, rather than trading at the price the market is offering.
6. Repeat throughout the day!

That being said, the reason I feel this system is a great one is that we are waiting for the charts to align, which gives us the edge we need to make consistent gains from the market. We accept what the market gives us rather than creating a system based on past charts to try to figure out the perfect target point to capture. When I've been trading this, I've had weeks where I've been breaking even, and I've been making 500+ pips a week, doing everything I can to profit from the market. When trading, I find that the hardest part is actually clicking the mouse to get in because we are not trained to buy high and sell high. So when you see a currency pair trending higher, our trader mentality is to wait for a pullback, which I find to be the main obstacle (fear) to this strategy. Once you figure out what you have to trade the market and what the charts have to offer, you will be able to trade it very, very successfully.

crazy

I have attached the zoomed-in market prices as well as the BANDS, the only thing that had to be added were the two 21 SMAs (one applied to the opening price and one to the closing price).