Simple trading strategy for proof of concept. Keeping focus on EurUsd.
Demo account starting with $5,000
FX Truths:
Demo account starting with $5,000
FX Truths:
- Entry level does not matter. Using S/R* to keep things simple.
- There are no edges in trading.***
- There is no way to predict a trend. All trends are hindsight.
- It is easier for price to retrace than to trade beyond extremes.
- Price movement is random.
- Indicators are derived from historical prices and are of no use for profitability.
Trade Management:
- Initial Entry: 40 pip TP (0.8R)/ Re-entry at -50 pips or next S/R level beyond. (54+% win rate**)
- Secondary Entry: 25 pip TP (0.5R)/ Re-entry at -100 or next S/R level (80+% win rate**)
- Third Entry: 50 pip TP (0R)/ Hedge or Invalidation Level at -200 pips (80% win rate**)
*Support and resistance will always have the same odds of price respecting them (50%). Round numbers are due to the predictive nature of where large options (vanilla, exotic) are placed. Option order flow attracts trades toward their price but not much past, if at all.
**Win % based on R-Multiples [Forex R-Multiple Win Percentages](https://forums.babypips.com/t/forex-...-table/1236423)
***When retail enters a counterparty trade with their broker by buying the Ask or shorting the Bid.
**Suggested Reading:**
- Trading and Exchanges: Market Microstructure for Practitioners: https://shorturl.at/ovPQZ
- Order Flow Trading for Fun and Profit: https://www.orderflowtrading.com