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According to my backtest, this strategy has been profitable for at least two years now. The strategy itself is very simple and literally takes less then 5 minutes PER WEEK to execute. If you have been trading for a while, you’ve probably encountered this system in one version or another on forex forums. It’s a simple weekly breakout strategy. After the markets open on Sunday at 23:00 CET (17:00 EST) we wait for the first 4 Hour candle to close. This happens at 3 AM CET on Monday, or 9 PM EST. Since I know I will get this question, if your broker has different 4 Hour settings, just use the hourly chart and draw a breakout box from 23:00 to 03:00.
For longs:
Place a Buy stop order at the high of the 4 Hour breakout box + 20 pips (+2 pips added for the spread)
For shorts:
Place a Sell stop order at the low of the 4 Hour candle - 20 pips
Here are the rules I used during the backtest. I tried to keep the rules simple and robust to avoid curve-fitting the data. The stoploss is placed at the opposite side of the of the breakout channel. If we are long we exit our trade when price breaks the low of the breakout channel and we simultaneously enter a short trade. But we only take …
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fxsurprise8 avatar

Thanks for your comment Airmike. While 125 trades may seem like a small amount, this is a weekly strategy. Doing a test with 1000 trades would mean back-testing the past 1000 weeks or since 1996. The Euro wasn't even around back then.

You can't use the same rules for short-term and long-term strategies.

ivanbgd avatar
ivanbgd 31 Mar.

Article is very nice for me !

driven avatar
driven 2 May

Sorry I didn't see this earlier so I could like and comment on it during the contest.

driven avatar
driven 2 May

I'm by no mean an expert on forex (still researching when I have the time), but there are a number of 'cherry picking' bells that go off in my head when I read this. Please don't take this as a harsh critique, this article is much better than most on here. But why do you use only one currency pair, and not even GBP or USD? Do you assume there is enough correlation that it applies to all, or did this just happen to be the one you tested? And as I'm sure you know, curve fitting is not just about maintaining general rules, you will inevitably find patterns if you go through enough data...

driven avatar
driven 2 May

...You could go to a casino and go through the red/black history at all the roulette tables and if there are enough of them you will find a number of patterns, but as we know there is no reason to think they will apply in the future. We know that from conceptually understanding how roulette wheels work. I guess my question here is: what is your conceptual model for why this patterns works? Do you assume there is an assimilation of information during the first 4 hours after a weekly open and then this information coalesces at this point? But why 4 hours and not 2 or 3?

orto leave comments
Ironically, being a slave of trading performance puts people with that mindset in a downhill movement. It’s a paradox of the financial world that in order to succeed and have the things that attracted you to the idea of having it all in the first place, you have to be humble and forget about being better than the other guy, or richer. Speaking of paradoxes, there’s something called the Omnipotence Paradox which can be very humbling once you give it some time and thought. Can an omnipotent being create a stone that’s heavy enough so this same being can’t lift it from the ground? If he can create the stone, that implies he won’t be able to lift it, and therefore he won’t be omnipotent anymore. If he can’t create it, then it’s the same principle, he’s not omnipotent. The lesson here is: there are no absolutes, especially in trading. In other words, trading is not perfect and it will never be, so stop looking for perfect answers. The Holy Grail Paradox All of this conversation and pursuit of the Holy Grail is very amusing sometimes. If you ask a professional trader at the top of his game (I did) he’ll tell you the Holy Grail is hard work. If you’re looking for some magic signal or…
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eagl avatar
eagl 6 Oct.

Good stuff. It may sound cliche but ultimately what works in trading comes really comes from within. True deserving hard work in trading is about research, development, testing and thinking about preserving your capital. A lot of traders fool themselves by looking at the market day after day and the market fools them in turn by letting them win twelve times in a row. Subsequently we all know what happens to that poor chap when the market turns bad against him.

doctortyby avatar

Emotional Intelligence also applies here.I agree with the fact that numbers don't lie and a 50% Win/Loss Ratio with a reward/risk of 3:1 can make one successful. Regarding the Ego, it makes our lives hard not just trading

SpecialFX avatar

Unfortunately, your article will probably not get much attention, because it is all text and a bit philosophical, but there is a lot of stuff here that people should pay attention to. I was reading and nodding in agreement all the time :)

Likerty avatar
Likerty 30 Oct.

First part of the article was really sensational just later fell in to usual and already heard things, but still it is one of the best articles on the matter taht I read here in DUkas contests!

orto leave comments

Hi guys,
This article is written for new traders to get started, from
deciding how to enter, to the exit of a trade and most importantly, managing a
trade. Instead of focusing a lot on technical indicators, I would like to share
on the use of simple candlesticks charts (you may set candlesticks as a chart
setting. In my personal view, simple things work best.
Determine your Entry
1.       Using candlesticks pattern
Bullish sign – To Buy or Long
Bearish sign – To Sell or Short
2.       Price concept
Fundamental concept, a trend can
never start nor continue if prices doesn’t go higher high, or lower low.
Buy or long when prices goes
higher, sell or short when it goes lower.
3.       Combining Candlesticks pattern and Price
Buy on 1 pip higher, sell 1 pip lower
(this is for intraday charts, if you are using a daily chart, you may want to use
wider pips). I will be using 1 chart as an example all the way from the entry of
a trade till the exit.
Position your Exit
Move Stop-loss to breakeven level once price
moves in your favor
Tightened Stop-loss price to the new price
whenever a new high / low is form
New reversal candlestick pat…
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MrSami avatar
MrSami 4 Apr.

Nice approach for starters. In my opinion, samples may be increased in a detailed article. Such as, giving some bars you may ask for estimates for next move, and trade plans. Later, you can show what happened in real...
Good luck

orto leave comments
Time Frame: 15 min
Symbol: All pair
Take profit: 4 pips
  I'll write one of my most effective and simple strategies using the Fractal indicator.
  First go to the 15
min time frame, then insert the fractal display (button indicators / bill
williams / fractal), here's an important part, fractal indicator on the screen,
the part that says "Number of bars on sides" put the number 5 . Once
you have done it will look like the screen below.
  After adding the fractal indicator, go to pictures and click on the picture rectangle that shows in the figure below.
   Now the search
chart is a strong movement upwards or downwards, after the wait indicator fractal
appears in the top and bottom, as shown in the figure below.
  After selecting specific points in the rectangle, dragging
the rectangle go expecting a break in the bottom or
top, watching the movement of the candles, and
afterbreaking open an order in favor of the disruption,
if broken down to open a sell, or else to open
a buy.
   You can also leave pending orders on top of these two
prices that are labeled with the rectangle.
Once open the order, expected to
close four pips of profit and close it. As
shown in the figure below.
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CASPI avatar
CASPI 13 Apr.

Useful information. I wish you success.

belman avatar
belman 15 Apr.

good luck+1

kkforex avatar
kkforex 18 Apr.

INteresting strategy 1+

kostas19 avatar
kostas19 18 Apr.

Nice presentation but i feel like the strategie is not viable because you have 3 pips that cover slippage spreads and comissions. +1

scramble avatar
scramble 25 Apr.

this "strategy" can be good just for fun, in my opinion! but staring in front of charts so much time to wait such setup to happen just to pick 4pips (4pips - 2spread = 2 pips)becomes to be a total waste of time.
good luck with this, if works for you, then everything is OK! :-)

orto leave comments