Simple and Easy H1 / H4 method

[conglo]

Here's a very simple and easy method for E/U H1 and/or H4 if you can stay on top of it.

It will probably work on other trendy pairs.

 

I've been testing it and am going to demo on a basket of pairs next week.

 

One year manual testing H1/H4 E/U (averaged) with a 4 pip spread (conservative)

Profit factor 2.04

66% profitable

Avg. profit 2.87

Avg. loss 2.72

 

 

1 Indicator: CCI 50, zero crossover.

You could also use the Awesome Oscillator or a MACD histo zero crossover and achieve pretty similar results.

 

When CCI crosses above zero buy at the close of the bar.

When, at the end of a subsequent bar you have a profit, no matter how small, close the trade and take it.

 

Opposite for sells.

 

Stop and reverse when appropriate even if it means a loss.

 

NOW.. here's the "loss recovery" part.

 

This method works very well but you're going to get whipped sometimes and incur losses.

 

You will need to keep track of your highest equity point.

 

Please don't ask me how to do that.

If you don't understand go to BabyPips or figure it out, this is Forex 101 stuff.

 

If you've had some losses, just keep going and watch the close of each bar until you have met or exceeded your previous highest equity point. Eventually it will come when you hit a good trend. Take your profit and exit. Wait for the next signal.

That's it.

 

NO STOPS! REPEAT: NO STOPS! Just an exit when the CCI turns unless you've already taken your profit.

 

If you have an EA to close your trade at a set equity point it's a good idea, I would even recommend after a losing streak to close your trade after you hit breakeven.

 

Shouldn't be difficult to code an EA but it's beyond my skills.

 

I don't receive emails that notify me of updates to this thread but I will check in periodically and will respond if appropriate.

 

Improvements or suggestions welcomed but please try them yourself first to see if they have merit.

 

P.S.

Someone may be thinking of a using negative progression of some sort.. it will work and work well, but you're going to take a much larger drawdown. I've tested it using a D'Alembert.

I don't like the risk, I would rather employ the method across a large number of pairs.

 

 

 

 

 

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Edited June 25, 2011 by conglo

[conglo]

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