My "Psycho" System!! Good System For Your Trading Arsenal

Dec 5, 2007
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#1
Hi Everyone! I recently came across this site when I was looking for an ebook on developing a solid trading plan. Looks like a very good forum for forex traders. Let me start off with a bang and introduce you all to a system I developed. Please have a look and let me know your thoughts on this system.

First off, let me tell you a bit about my trading style. I am a chartist and rely mainly on price action. Indicators are just that, indications of price. They try to smooth out what :cry: otherwise might be hard to extrapolate from price action. I use indicators as a gauge to get the feel for the price action. Ask yourself, if the price is moving towards the indicators or away from them? How does price react to your indicators after big moves? Do they perform well in a particular session.

Before I move on to the system, I urge you to only pick a few indicators and just watch and study them and you may find yourself getting a feel for the price action. Please don't try one indicator for a few trades, then something else for the next. Pick something and master it. As for me, the trading tool I use for entering the market and determining SL and TP is price. But, for the sake of those indicator lovers, I have added some tried and tested ones in my system.

:| Bored already?


So, onto the psychological numbers. What are they? In a nutshell, these are price levels with large orders in line to be filled. Eventually, these orders will aid in moving the market in a particular direction. You should know that each candlestick is a representation of the fear and greed of the participants in the market. Forex charts allow us to look in time and see what reaction a certain market had to news releases, data or any event of a particular day for that matter. Simply speaking, charts let us look into the degree of emotion from market participants. Putting price into this equation can start with the understanding that certain levels are psychologically driven and hence, I call these psychological numbers. Examples of these numbers are 226.50, 99.00, 110.50, 2.0150, 1.0900 and so on (basically, whole and half marks).



----------PSYCHO SYSTEM EXPLAINED----------


Time Frame: 15 mins
Indicators: Awesome & Bollinger Bands.
Currency Pair: GBP/JPY & GBP/USD
Targets: 100pips & 75pips respectively.
Stop Loss: 10 pips + spread.
Trade the Tokyo session and the London session.

Bollinger Bands Setting (Standard)
Period: 20
Deviations: 2
Apply to Close

Awesome Indicator Setting (Standard)


LONG ENTRY--

When the whole candle (candle a) is on the psychological support line (ie 1.0800) and closes above it. Then the next candle should move 5-8 pips above (candle a) upon when you enter the market. Awesome indicator should be green at (candle a). If price has not hit the overbought band (upper band) of Bollinger, then wait till it does, upon when you enter the market.


SHORT ENTRY--

When the whole candle (candle a) is on the psychological resistance line (ie 1.0800) and closes below it. Then the next candle should move 5-8 pips below (candle a) upon when you enter the market. Awesome indicator should be red at (candle a). If price has not hit the oversold band (lower band) of Bollinger, then wait till it does, upon when you enter the market.

To filter out false signals, make sure you satisfy both the 5-8 pip movement and the Bollinger Band rule. Also, once you are on +30 pips, move your stop so that you take atleast +10pips. This is to protect against some retracements.


I have been using this system for some time now with a lot of success. However, I urge everyone to trade this system on a demo account before putting any real money. And if and when you do so, please do it at your own risk.


Let me post a few screenshots of my trades.





TRADING RESULTS USING MY PSYCHO SYSTEM


No of Trades: 38 Trades
From: 5/11/2007 To: 20/11/2007
Number of +10 pips: 17
Number of -13 pips: 9
Number of +75 pips: 12

Overall PIPS: +953 pips
 
Last edited by a moderator:
Likes: trendie
Apr 19, 2002
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norfolk
#2
Yes I like the feel of this method, and it is something I will try and run with ie well, will try and use for trading with.

One thing bothers me, and that is often the candle goes rightoutside the Bollinger band, and indcations are that it will carry on in this direction, but then next candle it goes in opposite direction, however it sometimes actualy reverses and comes back the way you wanted it to. And with ony a s/l of 10 points doesnt give you much in which to manoevre with if that akes sense. Altho I guess you mustmake a lot of this up by being able to get these 75 pips movers.
Then again, I guess you can just forget 10 + pips, you have lost and just concentrate on the big ones you have captures.
Kevin
 

nine

Well-known member
Sep 5, 2003
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#4
My first glance on the last couple of day EJ data wasn't so positive. Perhaps I don't understand the system. Can I ask some questions mazdaz?

1. When you posted the wins above, were there no losses?
2. How did you exit the trades?
3. When you say "When the whole candle (candle a) is on the psychological support line (ie 1.0800) and closes above it." what do you mean by "when the whole candle is on"?
4. After candle A do you simply set a buy/sell entry 5 points above/below the top/bot of candle a?
 
Feb 14, 2008
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#5
Hi Mazdaz
I only recently joined this forum. Can you please explain what the "Awesome" indicator is?
Thanks
 
Jun 5, 2004
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#7
This looks interesting

Hi ,

This system looks interesting. Just saw it today. Will give it a whirl and see how it goes.


Cheers

Dildubai
 
Mar 19, 2008
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#10
Did this thread die? If not coud we have some screen shots?
If you look at the bottom of the original post - the thread starter - you will see what likely answers your question:

Thus: Last edited by counter_violent; 09-01-2008 at 03:52 PM. Reason: charts link to pop up adverts
 
Dec 24, 2007
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#11
Hi...Traders

I've study this system and it can be use.However,s/l 10 is TOO tight as GJ is volatile.Entry Signal must be very presice.Be careful newbies for retracement.
 
Mar 19, 2008
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#14
Psychological Support Levels defined.

when he says phscological support does he mean the middle line of the bollinger band??????????

Nanu
Psychological support levels are actual "dollar amount" levels. 1.50 or 2.00 would be examples. They are called "psychological" because they are "appealing" or "common" in nature. 1.53 or 2.04 would not be deemed a "psychological" level. Sometimes these levels are accepted as any number ending in a "0" like 1.40 or 1.30. And sometimes ending in "5" like 1.15 or 2.25 where 2.25 and 2.75 or 1.25 and 1.75 would be more acceptable. Take note that often there are 4 decimal points so the psychological levels for such amounts would be 1.1050 or 1.2110 or 1.2100 or 1.2150.