Da.DesiTrader
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Hi All,
I have come up with a method after spending a lot of time researching, combining different approaches and backtesting to produce a few levels (read "D" Desi Levels) at start of every week for EUR/USD which are valid only for that week.
These levels will be purely scalp levels, and theoretically price will have strong tendency to reverse at these levels (ie reverse enough to provide high probability scalp opportunity). Again, this is all theoretical and based on limited backtesting.
I have formulated the following method to trade these levels, please feel free to monitor these levels, advice, think about what other trade setups with these levels could be useful.
My initial method is below:
1) If price touches any of these levels from above then go Long with a set stop of 50 and target of 15 (vice versa for Short)
2) If price goes against you by 25 pips, then add another and equal position with stop of 25 (so the price stop will be same for both trades).
3) In the event of point 2 above, reset the target of both positions so that it is 15 pips above your average entry.
It is easier to setup, after Sunday open, in relation to spot, set up buy and sell orders.
All those risk/reward naysayer should consider that theoretically these levels will have 90% plus (if not more) probability of working, therefore risk/reward of 50 to 15 is still extremely profitable (even profitable at 80% probability).
By end of the week, these levels expire, and new levels will have to be redrawn/evaluated/identified.
Levels for w/c 21 March were these:
1.4309
1.3974
1.3573
1.4401
1.3912
1.3841
1.4135
1.4135 was trigerred was trigerred and it was averaged at -25 and profitably exited at +15.
Few things I am thinking about:
1) when averaging a trade at -25, enter double position size than original, this way probability is high to hit the target sooner. (if MM says, risk 1.5% per trade, then enter 0.5% in first trade and 1% on second). MM does not have to suffer, pips/stops/target should be adjusted to your MM.
2) price in my limited back testing has gone up above 30 every single time, therefore maybe target of 15 can be increased to 20 (not more) to maintain the success percentage.
3) after some population of successes and losses is collected, then apply kellys ratio or other methods to optimise MM.
Note: I will not reveal my MM or my methods for identifying these levels. If this makes this post in wrong section, then admins can feel free to change to appropriate section.
Cheers
I have come up with a method after spending a lot of time researching, combining different approaches and backtesting to produce a few levels (read "D" Desi Levels) at start of every week for EUR/USD which are valid only for that week.
These levels will be purely scalp levels, and theoretically price will have strong tendency to reverse at these levels (ie reverse enough to provide high probability scalp opportunity). Again, this is all theoretical and based on limited backtesting.
I have formulated the following method to trade these levels, please feel free to monitor these levels, advice, think about what other trade setups with these levels could be useful.
My initial method is below:
1) If price touches any of these levels from above then go Long with a set stop of 50 and target of 15 (vice versa for Short)
2) If price goes against you by 25 pips, then add another and equal position with stop of 25 (so the price stop will be same for both trades).
3) In the event of point 2 above, reset the target of both positions so that it is 15 pips above your average entry.
It is easier to setup, after Sunday open, in relation to spot, set up buy and sell orders.
All those risk/reward naysayer should consider that theoretically these levels will have 90% plus (if not more) probability of working, therefore risk/reward of 50 to 15 is still extremely profitable (even profitable at 80% probability).
By end of the week, these levels expire, and new levels will have to be redrawn/evaluated/identified.
Levels for w/c 21 March were these:
1.4309
1.3974
1.3573
1.4401
1.3912
1.3841
1.4135
1.4135 was trigerred was trigerred and it was averaged at -25 and profitably exited at +15.
Few things I am thinking about:
1) when averaging a trade at -25, enter double position size than original, this way probability is high to hit the target sooner. (if MM says, risk 1.5% per trade, then enter 0.5% in first trade and 1% on second). MM does not have to suffer, pips/stops/target should be adjusted to your MM.
2) price in my limited back testing has gone up above 30 every single time, therefore maybe target of 15 can be increased to 20 (not more) to maintain the success percentage.
3) after some population of successes and losses is collected, then apply kellys ratio or other methods to optimise MM.
Note: I will not reveal my MM or my methods for identifying these levels. If this makes this post in wrong section, then admins can feel free to change to appropriate section.
Cheers