FXTradepro: Strategy using a “Semi-Mar” position sizing

Hello traders:

I've been a lurker on Forex Factory for a long time and I wanted to start a thread discussing a profitable trading strategy I've been using for over a year. I have been hesitant to publish this trading method in the past because it uses a "half martingale" position size, and most of the threads I've read about the "martingale" method on Forex Factory advise against this concept.

The basic premise of this strategy is not entirely new, nor do I claim it to be 100% original, however, I have "made it my own" and found a way to profit from trading it. Having said that, I am willing to share the strategy, but I first want to determine the level of interest among plant members in this approach. If interest is strong, I would be willing to devote the necessary time to explain the method in detail. I'll share the basic concepts of this strategy below and await feedback from members.

Introduction: FXTradepro Forex Trading Strategy

After actively trading in the Forex market for over 5 years, I have learned that predicting market movements, especially short-term trends, is nearly impossible. We can certainly know what might happen, but we can never know for sure. Probability, and the systems that help exploit that probability, are key.

The FXTradepro Forex Trading Strategy does not rely on us being consistently correct about the direction of the market, but rather allows us to profit whether we are right or wrong. This strategy relies on volatility rather than making correct predictions. This is essentially a day trading strategy, with trades typically lasting less than a day or two at most.

This strategy can be traded manually on almost any broker platform, however, you will need to constantly manage and monitor your positions on the trading terminal, so I highly recommend using a MetaTrader 4 broker along with my "FXTradepro Manager" Expert Advisor (EA), which I had written for me by a professional coder. Unlike many EAs, FXTradepro Manager is not a fully automated system for trading. Its role is to trade within the system, or more precisely, to manage and monitor our positions once we have decided on a reliable entry. Essentially, we tell the EA when to enter the market and once that is done, the EA will perform the rest until the trade is closed.

concept:

The FXTradepro Forex Trading Strategy is a probability (expectation) based system that runs until the profit target is finally reached using what I call a "Trading Sequence" . Below I break this idea down into relevant details:

1) We trade based on our entry criteria (set up the EA). For example, we buy EURUSD at 1.3500. Our Stop Loss is set to 10 pips (1.3490) and Take Profit is set to 40 pips (1.3540). This is called the initial entry in the sequence.

2) If our take profit is hit, we wait for a new entry signal and start over.

3) If our stop is hit, then our next trade will be a sell (assuming our first trade was a buy as above) and once our stop is hit, we will enter at market price. This new sell position will have the same Take Profit = 40 and Stop Loss = 10 settings as the initial entry. This sequence of trades continues each time the stop is hit, with the final trade taking the opposite direction from the previous trade. When the take profit is reached, the trading sequence is completed. When using the FXTradepro Manager Expert Advisor, the EA will automatically open and close all trades once we set it as the initial entry.

http://aycu35.webshots.com/image/249...1327585_rs.jpg

4).In the above example, our initial entry is to buy. Alternatively, if our initial entry was a sell, the next trade in the sequence would be a buy with a stop loss of 10 pips and a take profit of 40. To summarize the above:

The trade sequence means that every time the stop loss is hit, the next trade will be:

1. in the opposite direction

1. Stop Loss and Take Profit settings will remain the same for all trades in the sequence, our initial entry point is TP=40 and SL=10

1. The batch increases are as follows:

http://aycu31.webshots.com/image/245...5862261_rs.jpg

In summary, the trading sequence continues, buying or selling while increasing the lot size of each position, until eventually a take profit is reached. In a series of trades, we will not have more than 1 position at a time (unless we trade more than 1 currency pair at a time). In my experience of trading this strategy for over a year and using highly selective entries, the vast majority of my trades end on the 12th entry or earlier, leaving plenty of room for unexpected market events.

FXTradepro Forex Trading Strategies - Trading Examples:

The chart below shows how this strategy works on EURUSD trading. Take profit and stop loss settings are the default settings TP=40 & SL=10. The Transaction Sequence is set to 24 entries using the following batch size progression: 0.1 - 0.1 - 0.2 - 0.3 - 0.4 - 0.6 - 0.8 - 1.1 - 1.5 - 2.0 - 2.7 - 3.6 - 4.7 - 6.2 - 8.0 - 10.2 - 13.0 - 16.5 - 20.8 - 26.3 - 33.1 - 41.6 - 52.2 - 65.5.

http://aycu35.webshots.com/image/249...4349205_rs.jpg

The trade hit the profit target on the 5th entry in the sequence with a position size of 0.4 lots. The first 4 trades in this sequence have position sizes of 0.1, 0.1, 0.2 and 0.3 lots respectively, and each trade has a stop loss of 10 pips.

Here's how to start profitable trading with a trading sequence of 0.1 standard lot equal to 10,000 units (1 mini lot):

#1 - Initial Entry - Sell 0.1 Lots: Stop Loss Reached -10 pips @ $1. per point =
#2 - Second Entry - Buy 0.1 Lots: Stop Loss - 10 pips @ $1. per point =
#3 - Third Entry - Sell 0.2 Lots: Stop Loss - 10 pips @ $2. per point =
#4 - 4th Entry - Buy 0.3 Lots: Stop Loss - 10 pips @ $3. per point =
#5 - 5th Entry - Sell 0.4 lots: Target price reaches +40 pips @ $4. Each point = +$160.

Total = $160 - Total Loss = $90 Profit for Sequence


Trading currency pairs:

The FXTradepro Forex Trading Strategy can trade on almost any currency pair. Since my stop loss is very tight (10 pips) on every trade, I generally prefer to trade currency pairs with spreads of 5 pips or less. For currency pairs with larger spreads, the take profit and stop loss settings and the lot size sequence need to be modified to accommodate the larger spreads.

Expert advisors and indicators:

If there is some interest in the concepts I outlined above, I will release an .ex4 version of my Expert Advisor. I also keep a few indicators on my charts, however, I focus primarily on price action, support and resistance, and average daily ranges to decide when to enter the market and start a series of trades.

The FXTradepro Forex trading strategy will not make anyone a millionaire overnight, nor will it provide the ridiculously high annual returns that many traders hope for, however, I have been able to make consistent gains using methods that I am comfortable with. Please leave your comments and let me know if anyone is interested in learning more about this method. If interest is strong, I will invest time in continuing the discussion in more detail and consider starting a journal detailing my entries and results

Thanks,

Dan