I must confess that I'm a bit apprehensive to share this idea. Partly because I've yet to fully develop it, also beacause I'm tempted to be secretive and greedy.. i.e. Keep It To Myself. Nonetheless, it is a better blessing to give, especially considering the benefits I've received from this forum. Furthermore, by sharing ideas and improving upon strategies is how we all can be successful. Hopefully, others will not only seek to take from this forum, but also contribute to it for the benefit of everyone.
In any event, here's the concept:
Enter a long and short position simultaneously. On both sides set your order to scale into the trade as it moves in the given direction. For example, for the eurusd, long 1 lot @ 1.4504 & short 1 lot @ 1.4500. If the price moves 10 pips up, then go long with an additional 1 lot. If it goes up an additional 10 pips, then go long with another lot. Wait for the daily break-out or plan to close-out all positions once the price reaches a given target. There is no need for a SL, as the counter positions fulfill that need.
I've considered other variations, such as including a SL and moving the SL up as the price goes in a given direction so that profits can be locked in. The problem with that is the whipsaw effect that creates at least two adverse effects, (1) the likelihood of being stopped out before reaching a given target & (2) the need to liquidate and re-start the process everytime a SL is activated. This is a more time intensive and demanding approach.
Another variation is to enter the straddle/strangle and once the price goes a designated amount of pips in a given direction, then book the TP on the positive trade, then immediately open another position in the same direction as the booked position. Wait for a reversal or a continuation of the trend by "x" number of pips, then book the profitable position again. Because of the reality that the market WILL RANGE sooner or later, one will be eventually profitable with this system.
The only real drawback I see with this system is the impact of the spread, especially every time an entry is made. However, currency pairs with wide spreads tend to have a bigger daily range, which gives a better opportunity for more profits/pips. Furthermore, the issue of spreads comes with the forex territory.
Your thoughts...
In any event, here's the concept:
Enter a long and short position simultaneously. On both sides set your order to scale into the trade as it moves in the given direction. For example, for the eurusd, long 1 lot @ 1.4504 & short 1 lot @ 1.4500. If the price moves 10 pips up, then go long with an additional 1 lot. If it goes up an additional 10 pips, then go long with another lot. Wait for the daily break-out or plan to close-out all positions once the price reaches a given target. There is no need for a SL, as the counter positions fulfill that need.
I've considered other variations, such as including a SL and moving the SL up as the price goes in a given direction so that profits can be locked in. The problem with that is the whipsaw effect that creates at least two adverse effects, (1) the likelihood of being stopped out before reaching a given target & (2) the need to liquidate and re-start the process everytime a SL is activated. This is a more time intensive and demanding approach.
Another variation is to enter the straddle/strangle and once the price goes a designated amount of pips in a given direction, then book the TP on the positive trade, then immediately open another position in the same direction as the booked position. Wait for a reversal or a continuation of the trend by "x" number of pips, then book the profitable position again. Because of the reality that the market WILL RANGE sooner or later, one will be eventually profitable with this system.
The only real drawback I see with this system is the impact of the spread, especially every time an entry is made. However, currency pairs with wide spreads tend to have a bigger daily range, which gives a better opportunity for more profits/pips. Furthermore, the issue of spreads comes with the forex territory.
Your thoughts...