Simple Forex System Trading

So far so good this month in April.  + 55 pips.  In terms of percentage gain this month, it is currently at +7.38%.  Besides the EUR/JPY & EUR/GBP pairs I normally trade, I added EUR/CHF AND AUD/USD this month.  Except for the EUR/GBP pair, I continued to use the 1:1 profit to loss ratio, normally set at 30 pips.  EUR/GBP is still 7 / 17.

EUR/JPY and EUR/GBP are still my favorite pairs.  EUR/CHF tends to have “moody” swings which hit my protective stops every time.  What I did was when the trade was in plus 15 to 20 pips, I would move the stop loss to the break even point.  Somehow, this pair would have some kind of knee jerk reaction frequently.  It hit the stops and then resumed its course.  This is probably my least favorite pair.

I currently do not trade this method as the pattern of this pair has changed.  I am writing scripts to test it out in demo.

The method was posted here.

The method was originally posted here. 

I’d like to make some updates to this method.  Currently, the settings are:

Time Zone Used:  GMT

Reference Price:  Open Price at 23:00 GMT

Buy Limit:  Reference Price - 7 pips

Buy Take Profit:  7 pips

Buy Stop Loss:  17 pips

Sell Limit:  Reference Price + 7 pips

Sell Take Profit:  7 pips

Sell Stop Loss:  17 pips

I found that the Buy Limit and Sell Limit can be modified depending on your brokers’ spread and your trading style or preferences.

So, with that said, you can adjust your buy limit or sell limit as follows:

Buy Limit:  Reference Price - (7 to 10) pips

Sell Limit:  Reference Price + (7 to 10) pips

The rest of the settings remain the same.

You can find the method here.

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.

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.

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.

I found this website which has posts daily about the British Pound trades.  It is using a Set and Forget method.  The profit and loss ratio looks good.  Take a look at Daily 20 Pips.