Hello Mike ,
I read the first page of this thread and now i decided to go to the end , and its good to see u r still going with it to date .
I primarily trade the EJ , as it is my favorite pair to trade , due to the large range and the volatility it has , Cause i do NOT like slow markets .
I find it well behaved market BUT that is to my theories of trading which are 100% based on fibs , with some great success .
I am trying to understand what u r doing with this system , BUT maybe due to my old age hahahahahaha,, i can NOT seem to follow .
Would love to be able to chat to u about it , as i MIGHT be able to SUGGEST some stuff .
Cheers ,
George
Hi George,
Sorry for the delay in getting back to you. It is always welcome to hear from a fellow trader.
There is nothing mysterious about my trading though my presentations may seem a bit vague.
In its simplest form all I am trying to do is to work to a breakout based upon an overnight time criteria. In the case of the EJ I use 11pm - 6am.
I calculate the bandwidth from the highs and lows in between these times, add 3 pips for a buy and less 2 pips for a sell. Whichever price breaks first I stick with as my trade for the day. I usually set a 45pips SL & a minimum of a 35 pips PT.
However, I may have to set both trades initially if price has yet to break either extreme. For my part, I cancel the second "order" once the first one triggers.
I must emphasize that the background to this strategy is to run with a second trade at the other end of the extreme should the first trade fail.
What you may notice is that I will very often set a trade to make 35 pips and use an SL of 45 pips. The apparent logic here is that if I keep repeating this process and only win 50% of the time then I'm doomed to failure.
However, I have been keeping a record over the past year based upon a criteria that always has an SL at a higher range than its PT. Hence, if the first trade loses then the second trade is also set to achieve a smaller PT than the target price.
Despite all logic this strategy has produced over 1,000 pips in its first year.
When the bandwidth expands the SL gets larger e.g. a max of 78 Pips v a target 0f 48 pips. If the bandwidth is small (min 30 pips) then the PT has also been small e.g. 28 pips.
All this seems to defy logic but it has actually occurred over the past year. There have been blips when a previous cumulative 1000+ pips dropped back to around 760 pips before climbing back up again to its present level of 1,000 pips plus.
I still don't understand why it works and have been trying to smooth out wild fluctuations by experimenting.
This is why I am now paper trading an initial trade using a 45 SL & minimum of 35 pips PT.
I also record the 3 day average of the number of pips achieved and quote on a safe range which is the 3 day average divided by 1.5. The safe range is achieved very regularly whilst the 3 day average looks to be about 50% of the time.
We have been experiencing a spate of low range days interspersed with some good range days of late and I am rather inclined to assume that a normal day will produce the safe range and edge towards the 3 day average.
Faced with this whilst I am recording the paper trade (45SL & 35PT) even more should the safe range imply a higher PT (though I would never extend my 45SL) and always extend my PT if e.g. 50 pips was within the safe range.
With low range days I tend to favour qualification of a trade either "long" or "short", wait for a retrace and then take the trade using a 20SL and either a 40/30 or 20 PT depending on how the trade is going.
This is why you will see me refer to qualification at either end of the bandwidth and then a 45SL and/or a 35 pips+ PT for my paper trades that will run against the original, what I call the EM EJ) and then use a 20SL and 40,30,20 PT following a retrace for my actual trades for the day.
The hope is that my 20SL retrace trades will prevail over my paper trades by the end of the year versus my paper trades or heaven forbid the true EM EJ trades.
If they don't then I will either trade the paper trades from January or even the original EM EJ trades.
I want to make money just like any one else does in this game.
I hope this helps and does not add more to your confusion.
I am always happy to consider other people's thoughts on the subject and if your "fib" rules can aid me in my quest I am more than happy to adopt them and welcome your explanation on how they work for you.
Sounds like you are doing OK atm and I congratulate you on your success.
