Below is 2 of my systems in full, which I have just stopped using because I suspect they may be losing money over the long run but i am not sure.
I like to keep things simple and this is reflected in the style of the systems which are straight forward and rely mostly on price action rather than lots of indicators.
Strategy 1:
Although in theory, there shouldn't be much action before major news releases, I have often noticed big moves in direction before major news is broken at 1.30pm UK time (I am in the UK). My aim is to "predict" the direction the market will take after a news release. Because it is cheaper for me, I trade the Dax with this system but I would expect you could equally trade the Dow futures.
Rules:
Set up
1min Dax chart
Stochastic 21,7,7
Entry
Watch Dax between 1pm and 1.28pm UK time (8-8.28am Eastern) when major news is due.
If, at any point between this time there is a move up or down or 18 points or greater, trade in that direction.Set stop loss 6 points away.
If 1.28pm is reached and market movement is 15 points or less, use stochastic for trade direction: 48 or below is a buy, 62 or above is a sell. Set stop loss at 6 points away.
Exit
If stop loss is hit
1 minute after news release
2 minutes after news release if market moves 15 points or more in your favour on news.
No trade
If Dax moves 16 or 17 points before news-unsure
If Stocastic is between 49 and 61 at 1.28pm (when using stochastic for entry)
Strategy 2:
A Dax breakout strategy which waits until 9am for the market to settle. I use a time exit for this as most moves seem to last about 40 minutes.
Edge: The willingness to hold the full 40 minutes even if you are well in profit soon after entry.
Rules:
Set up
1min Dax chart
watch from 9am-12.50pm UK time.
No trade
If market moves 85 points or more before 9am (based on the market being around the 4000 level).
Entry
Draw a line of Support and a line of resistance from the low and high of the Dax between 8am and 9am (UK time).
Trade in market direction if market settles at 3 points or more beyond resistance. (1 contract with 6 point stop loss).
Add 2 contracts once 10 points in profit and move stop loss to breakeven.
Exit
Stop loss is hit
After 40 minutes
My questions are:
1) Are these winning or losing strategies in the long run?
2) Can they be improved upon or turned into winning strategies (if losing)?
I like to keep things simple and this is reflected in the style of the systems which are straight forward and rely mostly on price action rather than lots of indicators.
Strategy 1:
Although in theory, there shouldn't be much action before major news releases, I have often noticed big moves in direction before major news is broken at 1.30pm UK time (I am in the UK). My aim is to "predict" the direction the market will take after a news release. Because it is cheaper for me, I trade the Dax with this system but I would expect you could equally trade the Dow futures.
Rules:
Set up
1min Dax chart
Stochastic 21,7,7
Entry
Watch Dax between 1pm and 1.28pm UK time (8-8.28am Eastern) when major news is due.
If, at any point between this time there is a move up or down or 18 points or greater, trade in that direction.Set stop loss 6 points away.
If 1.28pm is reached and market movement is 15 points or less, use stochastic for trade direction: 48 or below is a buy, 62 or above is a sell. Set stop loss at 6 points away.
Exit
If stop loss is hit
1 minute after news release
2 minutes after news release if market moves 15 points or more in your favour on news.
No trade
If Dax moves 16 or 17 points before news-unsure
If Stocastic is between 49 and 61 at 1.28pm (when using stochastic for entry)
Strategy 2:
A Dax breakout strategy which waits until 9am for the market to settle. I use a time exit for this as most moves seem to last about 40 minutes.
Edge: The willingness to hold the full 40 minutes even if you are well in profit soon after entry.
Rules:
Set up
1min Dax chart
watch from 9am-12.50pm UK time.
No trade
If market moves 85 points or more before 9am (based on the market being around the 4000 level).
Entry
Draw a line of Support and a line of resistance from the low and high of the Dax between 8am and 9am (UK time).
Trade in market direction if market settles at 3 points or more beyond resistance. (1 contract with 6 point stop loss).
Add 2 contracts once 10 points in profit and move stop loss to breakeven.
Exit
Stop loss is hit
After 40 minutes
My questions are:
1) Are these winning or losing strategies in the long run?
2) Can they be improved upon or turned into winning strategies (if losing)?
