Simple Forex System Trading

Normally, I stick to my trading plan and the two trading strategies I have been using for some time.  They have produced good results.  However, I was bored on one of those days and began to poke around on the web.  Ichimoku caught my attention.  I have never used the Ichimoku indicator before.  So, I decided to read about it and found it absolutely fascinating.  Even though at the very first glance, it did look complicated.  After a few attempts, I began to get the hang of it. 

Here are a couple of web sites that I used to read about Ichimoku:

http://www.fxwords.com/u/ichimoku-cloud.html

http://www.prosticks.com/education/ikh.php

I had my first Ichimoku trade last night.  Bought EUR/JPY and sold it in less than 30 minutes and bagged 20 pips.  I did put a 20-pip stop loss in just in case.

Below is a 5-minute chart with Ichimoku I used last night.

I came across this testing software the other day and downloaded a copy to try it out.  It may not be as fancy as Meta Trader 4 or Trade Station, but it is a godsend for those who don’t know the programming script for Meta Trader or Trade Station.

It is packed with all the indicators that you can ever need to build your strategy, entry and exit points, risk management, etc.  However, I couldn’t get it to work for mine because I somehow was unable to create the rules for stop buy or stop sell only at previous high or low plus or minus 5 pips.  It only allows you to set it at previous high or low.  I might be doing it wrong though.

Nonetheless, take a look, download a copy at Forexsb.com and try it.  I think it’s worth a try.  If you don’t know any programming script, this can be a workaround.

Found this breakout system just this afternoon.  It is a little different, but looks fairly simple.  Based on just one bar, a one-hour bar, you can easily place the buy or sell order with a 20-pip take profit and a protective stop loss orders.  Read how this breakout trading system works here at Forex Strategies Revealed.

Difference among some of the breakout systems introduced on the site:

• I use daily high and low, + 5 or -5 pips to place the stop buy and sell orders.  EUR/JPY only.  30/30 profit/loss.
• A variation of my method is to use the high and low between 0:00 GMT and 7:00 GMT, + 5 or -5 pips to place the stop buy and sell orders.  EUR/JPY only.  30/30 profit/loss.
• Fx Trader Man’s breakout system uses the high and low during the Asian session to place orders.
• Daily 20 Pips uses this strategy to trade British pound.

For the month of February, EUR/JPY 30/30 system has not been performing well.  The trading pattern seems to have changed.  Normally, this pair was used to be able to produce 30 pips or more of the action to the up or down side at around 7:00 GMT.  However, after 2/11/08, it stopped behaving so.   Except on 2/13 I placed a trade and it got me a +30 pips, and then on 2/17, I got a double whammy, a -60 pips result, I pretty much stayed on the sideline.  For the month of February, the result ended with a negative 60 pips.  Had I traded regularly, the result would have been a very disappointing negative 180 pips.

What this pair has been doing was it would break to the up or down side for just about 10 or 20 pips at around 7:00 GMT, and then it went into a consolidation phase.  That was when the stop loss got hit.  Later on, either during the late European session or the US session, the pair resumed its earlier direction.

I found this trader’s blog and he was talking about the same thing.  He is also trading this pair plus a couple of other JPY crosses.  He mentioned that the best performing pair, EUR/JPY, turned to the worst during the month of February. 

March did not open with a successful trade either.  Today was another -30 pips hit.  I am still confident with the trading system.  The challenge continues.

*Capital Growth includes daily debit or credit interests

*Capital Growth includes both trading systems - EUR/JPY 30/30 and EUR/GBP 7/17

March: -30

Cumulative Results (Since 10/01/07): +360

I found this break out trading system on an experienced trader’s blog.  He documented in details about how to use this system.  The currency pairs he recommended were EUR/JPY, GBP/JPY, and GBP/USD.  Mostly because these pairs tend to have wider swing and are more volatile.  The system is very similar to the one I am using.  However, I primarily trade EUR/JPY using the break out strategy.

Take a look at his blog at Practical Forex Trading.  It’s a good read guaranteed.