Weekly Meantrades | Forex Indicator Download - MT4/MT5 Resources
This system is very different from most systems on Forexfactory. I have traded various formats since 2009. I'm not here to brag about how great it is or how real a deal it is, but I can definitely say that it is profitable and can be a huge pleasure to trade.
I'm heavily influenced by Michael Jardine, Kevin Hagerty, Austin Passamonte and a mysterious guy named Phat Dat from the irc futures room years ago. Basically, what I learned from these experienced traders is that the market keeps backfilling - or mean reverting - and if you want to catch a huge wave, you have to get in before the breakout.
Weekly trading averages are designed to capture the really big intraday trades and hold on to substantial targets.
How to set up your chart
The first thing you need to do is modify your Fibonacci levels. I don't trade at normal ratios, I call them "crowded" levels. I don't want to rush into or out of my trades. I prefer things to unfold quietly.
I use the following levels on my fib tool and no others:
1
.5
0
3.77
-3.77
6.11
-6.11
9.88
-9.88
At the beginning of each trading week, open your four-hour chart and plot Fibonacci from high to low on the first or second bar. I usually plot Fibonacci on the smaller of the two bars, but never on a bar smaller than 20 pips. If neither the first nor the second bar is larger than 20 pips, I will wait until the first four-hour bar that meets this requirement. The purpose of this is to determine early volatility for the week ahead. These levels are not an attempt to predict anything. They simply draw a suitable range to trade in as the week develops.
Secondly, you need to apply 3 more indicators with the following settings:
Stochastic is set to 10,3,3
Super Trend NRP is 10 and 1.5
Keltner Band 50 50 1.5
Note that we will plot the ratio on the 4-hour chart but get the signal on the hourly chart.
trade signals
If there is uncertainty about whether a signal will appear the next day, usually the first signal will appear late in the London session.
You want to buy on the rebound or sell on the peak and hold until we reach our profit target.
Once the price trades to a certain ratio level, you look for a reversal. The following signals may develop within 36 hours and do not need to occur within an hour or two. Often times, a quick reversal is too quick to enter and there is a risk of getting filled at the worst possible price.
First, the stochastic indicator must conduct a long crossover below the 20 level and a short crossover above the 80 level.
Secondly, the supertrend must also be reversed. For bulls, it needs to cross upward, and for bears, it needs to cross downward.
Third, price must hit the outside of the Keltner Bands and begin a reversal. This ensures appropriate volatility and the chance of the market following is much better. It is important to note that do not enter a trade when the price has already crossed the midline , this will only create greater risk and may or may not bounce back and prevent you from being out.
Stops <br> I currently use a 200 pip stop loss, I have used swing highs and swing lows before but I found this only worked when the market was highly volatile. Volatility is currently extremely low so we will not pull back as quickly as necessary and rely on volatility levels to prevent stops. When volatility rises, it is easy to check the ATR reading on the daily chart and evaluate reasonable levels to avoid intraday stop runs.
Position Size <br> I usually trade with a margin of 10 to 1. So, if I have a $10,000 account, my trading position size will not exceed 100,000 of the total account. This means that if I trade 5 markets, I will not trade more than 20,000 positions in each market.
Many times I will receive a second entry signal while the first signal is at a negative balance. As long as my position size is within my risk parameters, I will enter the secondary position. I prefer to only enter when a signal provides price improvement that reduces my cost averaging, and I'm not a big fan of averaging day trading strategies.
Take profits
Once price successfully hits the other end of the Keltner Band, we want to move the stop loss to achieve breakeven. Our target is the first ratio level above the Keltner Band for bulls and the first ratio level below the Keltner Band for bears.
Many traders like to take some or all of their profits at this time. However, after a few years of trading, I realized that it was much better to stop at breakeven than miss out on larger profits. It's a mathematical puzzle, and research shows that the longer you keep profitable trades, the better your chances of making more money, not less. While this means you will always see good gains disappear, if you don't stay in the market "risk-free" for longer, it's unlikely that one trade you take too early will cover all of your stop loss.
I currently trade EUR/USD, GBP/USD, EUR/JPY, Gold, Oil and occasionally AUD/USD.
I've found that on average I can get 2 decent signals per pair per week. After the third signal, ratio levels tend to drop in terms of accurate readings of volatility, and there is a tendency to wait until next week for a better trading range.
I'll post some of this week's deals below.
I'm heavily influenced by Michael Jardine, Kevin Hagerty, Austin Passamonte and a mysterious guy named Phat Dat from the irc futures room years ago. Basically, what I learned from these experienced traders is that the market keeps backfilling - or mean reverting - and if you want to catch a huge wave, you have to get in before the breakout.
Weekly trading averages are designed to capture the really big intraday trades and hold on to substantial targets.
How to set up your chart
The first thing you need to do is modify your Fibonacci levels. I don't trade at normal ratios, I call them "crowded" levels. I don't want to rush into or out of my trades. I prefer things to unfold quietly.
I use the following levels on my fib tool and no others:
1
.5
0
3.77
-3.77
6.11
-6.11
9.88
-9.88
At the beginning of each trading week, open your four-hour chart and plot Fibonacci from high to low on the first or second bar. I usually plot Fibonacci on the smaller of the two bars, but never on a bar smaller than 20 pips. If neither the first nor the second bar is larger than 20 pips, I will wait until the first four-hour bar that meets this requirement. The purpose of this is to determine early volatility for the week ahead. These levels are not an attempt to predict anything. They simply draw a suitable range to trade in as the week develops.
Secondly, you need to apply 3 more indicators with the following settings:
Stochastic is set to 10,3,3
Super Trend NRP is 10 and 1.5
Keltner Band 50 50 1.5
Note that we will plot the ratio on the 4-hour chart but get the signal on the hourly chart.
trade signals
If there is uncertainty about whether a signal will appear the next day, usually the first signal will appear late in the London session.
You want to buy on the rebound or sell on the peak and hold until we reach our profit target.
Once the price trades to a certain ratio level, you look for a reversal. The following signals may develop within 36 hours and do not need to occur within an hour or two. Often times, a quick reversal is too quick to enter and there is a risk of getting filled at the worst possible price.
First, the stochastic indicator must conduct a long crossover below the 20 level and a short crossover above the 80 level.
Secondly, the supertrend must also be reversed. For bulls, it needs to cross upward, and for bears, it needs to cross downward.
Third, price must hit the outside of the Keltner Bands and begin a reversal. This ensures appropriate volatility and the chance of the market following is much better. It is important to note that do not enter a trade when the price has already crossed the midline , this will only create greater risk and may or may not bounce back and prevent you from being out.
Stops <br> I currently use a 200 pip stop loss, I have used swing highs and swing lows before but I found this only worked when the market was highly volatile. Volatility is currently extremely low so we will not pull back as quickly as necessary and rely on volatility levels to prevent stops. When volatility rises, it is easy to check the ATR reading on the daily chart and evaluate reasonable levels to avoid intraday stop runs.
Position Size <br> I usually trade with a margin of 10 to 1. So, if I have a $10,000 account, my trading position size will not exceed 100,000 of the total account. This means that if I trade 5 markets, I will not trade more than 20,000 positions in each market.
Many times I will receive a second entry signal while the first signal is at a negative balance. As long as my position size is within my risk parameters, I will enter the secondary position. I prefer to only enter when a signal provides price improvement that reduces my cost averaging, and I'm not a big fan of averaging day trading strategies.
Take profits
Once price successfully hits the other end of the Keltner Band, we want to move the stop loss to achieve breakeven. Our target is the first ratio level above the Keltner Band for bulls and the first ratio level below the Keltner Band for bears.
Many traders like to take some or all of their profits at this time. However, after a few years of trading, I realized that it was much better to stop at breakeven than miss out on larger profits. It's a mathematical puzzle, and research shows that the longer you keep profitable trades, the better your chances of making more money, not less. While this means you will always see good gains disappear, if you don't stay in the market "risk-free" for longer, it's unlikely that one trade you take too early will cover all of your stop loss.
I currently trade EUR/USD, GBP/USD, EUR/JPY, Gold, Oil and occasionally AUD/USD.
I've found that on average I can get 2 decent signals per pair per week. After the third signal, ratio levels tend to drop in terms of accurate readings of volatility, and there is a tendency to wait until next week for a better trading range.
I'll post some of this week's deals below.
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