I have tried several indicators; however, the fact is that they are ALL Lagging. At best, a few can tell you what's currently happening, although most will tell you what already happened. With all that said, many "experienced" traders tend to promote Price Action with minimal indicators. Along the basic premise of Price Action, I'd like to share a VERY SIMPLE idea that can be proven profitable with backtesting...
Follow the daily trend of currency pairs against the USD... that's it, that's all!!
For example, let's consider the eurusd. If yesterday's trend was downward, then place a sell order at the opening of today. Although my days are based on GMT, I don't think it would matter, as long as you cycle back to the same session (i.e. Asian, European, Austrailian, U.S.). The sl/tp = 200/200.
There are filters that can be added to this strategy to help extend the edge. Some of those filters are: (1) enter only after two consecutive days of retracements (i.e. market up on day 1, then down on day 2, then up on day 3... on day 4 you would enter an order to go long); (2) enter with a limit order in the new day (i.e. if prior day was an up day, then on today's order enter with a limit buy order about 50 below the close of the prior day). The basic drawback with (1) & (2) is that they may filter out good trading trends that begin early; (3) adjust the risk/reward to a more favorable ratio. The problem with doing that is the increased probability of a good trade going bad because you overextended the tp relaive to the sl. Another problem is that a bad trade may get stopped out prematurely relative to the tp (i.e. sl=100, but tp=200); (4) a semi-martingale or full-martingale component (i.e. after every two losses, double the lot size). Needless to say, this can potentially become very disasterous all too quickly.
Overall, this system is banking on the fact that even in a ranging market, it tends to move in a given direction more often than daily reversals. For example, the eurusd may begin at 1.3000, go up to 1.3600 by the end of the week, then drop to 1.2900 by the end of the second week. In the interim, you may have had the opportunity to follow a few days of trending in between reversals (possible only 1 - 3 reversal days vs. 4 - 8 trend days, with couple of relatively flat days). Ultimately, you're looking for a better than 50% win rate.
Walt
Follow the daily trend of currency pairs against the USD... that's it, that's all!!
For example, let's consider the eurusd. If yesterday's trend was downward, then place a sell order at the opening of today. Although my days are based on GMT, I don't think it would matter, as long as you cycle back to the same session (i.e. Asian, European, Austrailian, U.S.). The sl/tp = 200/200.
There are filters that can be added to this strategy to help extend the edge. Some of those filters are: (1) enter only after two consecutive days of retracements (i.e. market up on day 1, then down on day 2, then up on day 3... on day 4 you would enter an order to go long); (2) enter with a limit order in the new day (i.e. if prior day was an up day, then on today's order enter with a limit buy order about 50 below the close of the prior day). The basic drawback with (1) & (2) is that they may filter out good trading trends that begin early; (3) adjust the risk/reward to a more favorable ratio. The problem with doing that is the increased probability of a good trade going bad because you overextended the tp relaive to the sl. Another problem is that a bad trade may get stopped out prematurely relative to the tp (i.e. sl=100, but tp=200); (4) a semi-martingale or full-martingale component (i.e. after every two losses, double the lot size). Needless to say, this can potentially become very disasterous all too quickly.
Overall, this system is banking on the fact that even in a ranging market, it tends to move in a given direction more often than daily reversals. For example, the eurusd may begin at 1.3000, go up to 1.3600 by the end of the week, then drop to 1.2900 by the end of the second week. In the interim, you may have had the opportunity to follow a few days of trending in between reversals (possible only 1 - 3 reversal days vs. 4 - 8 trend days, with couple of relatively flat days). Ultimately, you're looking for a better than 50% win rate.
Walt
