My trading strat.......

ceydababy

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I am going to share my trading strat with you all. I have been using this for a number of months and the results are pretty consistent. Simplicity is the key here. If anyone has any comments, other than "this system is SH*T" not that I have a problem with that because I do just fine with it...However, this kind of criticism doesn't really get us to far in maybe improving upon the basics that I have in place so far. So if you think it's crap STOP READING, if you like it, have a question or think you can see an improvement please feel free to contribute !!.

I am trading AUD/USD (2 point spread) and FTSE CASH (1 point spread) with this system. I have briefly looked at other markets and it works on all that I looked at.

You need:

MACD set at 12/34/9

Parabolic SAR NORMAL SETTING

SMA 50 period

RULES....BASED ON 1 MIN TIME FRAME....USING FTSE CASH AS AN EXAMPLE....

ENTRY CRITERIA

1. When MACD Histogram Turns Green wait for the second Histogram bar to turn green for confirmation, if SAR is also Green go LONG
2. When MACD Histogram Turns Red wait for the second histogram bar to turn Red for confirmation, If SAR is Also Red Go Short

The caveat to the above is if the Parabolic SAR and Histo switch colours at the same time this is also a safe entry point.

STOPS

1. Dependent on Market, I normally set a hard stop of 10 points but will cut if the SAR or histogram turn against me. On a FTSE 1 min chart with a 1 point spread (courtesy of capital spreads) losses are very limited

EXITS

This is the trickier part, and one I am struggling with a little and in my opinion comes down to how well you can read market conditions. I have a few exit strats that I am using.

1. If the SAR or MACD Histo change colour (eg. Red goes to green or green goes to red)
2. If I hit a fixed point target (zen is 10) then I would look to get out
3. At a significant point of Resistance/Support
4. At the 50 SMA Level

Periods to AVOID....

1. Because MACD is a lagging indicator, sharp moves (spikes) can skew the indicators and knock them out of sync. This is more often a problem on the smaller time frames. If the indicators go out of sync it is imperitave that you wait until they line back up again. By this I mean when the system signals short it isn't signalling a short at the bottom of the market. You obviously don't get the first move once it is back in sync but you can carry on and away with the rest of them.

When following this system it is imperitave that you don't second guess and you HAVE to wait for confirmation. When I have lost the majority of losses come where I haven't waited for confirmation and have tried to get in for the deadly "few extra points"

I am finding on a 1min FTSE almost every signal gives out at least 5 points....apart from when the system is not in sync.

Let me know what you think guys.....
 
Nice simple system.

Thanks for posting.

But Macd or a few other indicators do not have to be lagging indicators/
 
hey options,

how you doing been a while....

mark, good on you for posting it...you already know what i think.:D

just for the record. i have seen this traded live and it is very effective, simple to set up and follow as with all things trading related its the discipline to stick to it that determines how successful it is.;)
 
Last edited:
hey options,

how you doing been a while....

mark, good on you for posting it...you already know what i think.:D

just for the record. i have seen this traded live and it is very effective, simple to set up and follow as with all things trading related its the discipline to stick to it that determines how successful it is.;)

Thanks AJ ! Just posted this up to see what other people thought. Obviously the larger the time frame the more reliable the signals !
 
This is my first post, but have been reading up around here in the last few days with interest!

I am fairly new to trading as such - in the past I tended to concentrate on longer-term share investments - but have been studying the charts to try and find a few potential strategies for currency pair trading.

So essentially just wanted to say thanks for taking the time to post your strategy. It will certainly give me things to think about when I'm looking at the charts!
 
On the subject of this strategy, I have another question (sorry if this is slightly off-topic). I have been paper-trading this and a couple of my own strategies seemingly profitably on the charts provided by IG Index (they use IT Finance charts), and did some live trading last week - all fairly successfully.

However whenever I setup a strategy to backtest through the the charting package (the above strategy included) I tend to get terrible results, no matter what I do. Not sure if this is something that anybody else has found with backtesting using online charts? Probably me making some fundamental errors!

I only ask in case ceydababy has tried testing this on Capital Spread's charts - would be interesting to know how it went.

Also - tried ceydababy's strategy paper trading on EUR/GBP and EUR/USD with a fair amount of success!
 
Charting Packages....................

I have only used on Capital Spreads and IG charts, both of which are supplied by IT Finance. Never looked at it on Pro Realtime or any "professional" charting package. That does seem strange that it doesn't work on a professional charting package....not suggesting you are doing anything fundamentally wrong....just interested as to why it shouldn't work.
 
I've been doing my backtests through the IT Finance charts (using their 'ProBackTest' function). It is probably me doing something wrong, as this is all new to me!
 
On the subject of this strategy, I have another question (sorry if this is slightly off-topic). I have been paper-trading this and a couple of my own strategies seemingly profitably on the charts provided by IG Index (they use IT Finance charts), and did some live trading last week - all fairly successfully.

However whenever I setup a strategy to backtest through the the charting package (the above strategy included) I tend to get terrible results, no matter what I do. Not sure if this is something that anybody else has found with backtesting using online charts? Probably me making some fundamental errors!

I only ask in case ceydababy has tried testing this on Capital Spread's charts - would be interesting to know how it went.

Also - tried ceydababy's strategy paper trading on EUR/GBP and EUR/USD with a fair amount of success!

i might well be wrong but if you are trying to backtest this via the backtest function on ig it might well throw up a few odd results.....namely there would be no way to identify the out of sync periods and also i think it would automatically test out of hours periods after the main market is shut.

imho you would be best papertrading it live for a a period to gain confidence and so as to recognise the out of sync periods in real time. also during the most active market periods

happy trading
 
i might well be wrong but if you are trying to backtest this via the backtest function on ig it might well throw up a few odd results.....namely there would be no way to identify the out of sync periods and also i think it would automatically test out of hours periods after the main market is shut.

Very true - hadn't looked at that aspect of it. Thanks for the advice, will go ahead and paper-trade live during the more active periods.
 
Forward indicator

Blimey, that'd be worth paying for...........




;)

Hi nkruger,

Ill sell y the MRs, :LOL: :LOL:

works similer to the macd except when it starts to flash red

she"ll shout teas ready and the indexs just take off, its the only forward indicator you"ll ever need :LOL: :LOL:

Priceless

Andy , just out of retirement for one night only :D
 
EXITS

This is the trickier part, and one I am struggling with a little and in my opinion comes down to how well you can read market conditions. I have a few exit strats that I am using.
It always is the trickier part :)

1. If the SAR or MACD Histo change colour (eg. Red goes to green or green goes to red)
2. If I hit a fixed point target (zen is 10) then I would look to get out
3. At a significant point of Resistance/Support
4. At the 50 SMA Level

Have you thought about raising your stop when the "fixed point target" has been reached. Or taking some profits at that level and consequently moving your stop to BE for the remaining part of your position?

Why not wait at that "significant point of Resistance/Support" to see what price does first? However on the 1-min there'll most likely be a counter-reaction, no matter what... always some scalpers around. Or you could wait and see what price does but while you wait, move up your stop so if price decides to break S/R you'd still be in for the major move.

Just some comments..
 
Hi nkruger,

Ill sell y the MRs, :LOL: :LOL:

works similer to the macd except when it starts to flash red

she"ll shout teas ready and the indexs just take off, its the only forward indicator you"ll ever need :LOL: :LOL:

Priceless

Andy , just out of retirement for one night only :D

Got the Checkbook out Develbis, show me the goods in action.

MG
 
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