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200 HMA Alignment Strategy for London and US Open

 
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bcroft

200 HMA Alignment Strategy for London and US Open

200 HMA Alignment Strategy

Since my last post, I need to switch my strategy to earn Silver 3. I was exiting trades too soon to reach 50 pips, so how could I modify what I liked about the London and US Open sessions using a modified alignment strategy. 

1)    Trade both Open Sessions.

2)    Choose 1-2 correlating pairs (GBP/USD and EUR/USD).

3)    Select the 200 HMA plus 10 HMA based on Todd’s discussion of the HMA strategy.

4)    No pivot points since it was cluttering the screen.

5)    MACD at 24-18-52.

6)    Look at three-time frames for alignment on at least three-time frames (5M-1H-4H or 1-5-15). The longer time frames were necessary to reach the 50 pips.  The shorter time frames for collecting pips as a buffer.

7)    Place two orders for each pair. Scale-out after 50% TP targets are reached then allow the rest to run.

8)    Enter and Exit for the Long Time Frame Trades

  1. TP-50
  2. SL-50
  3. 50% of SL is time to exit

9)    Enter and Exit for the Short Time Frame Trades

  1. TP-50
  2. SL-50
  3. 20% of SL is time to exit
  4. The difference is that I would use a mental stop of 10 pips in either direction unless it began to run.

Results: Win-Loss ratio stayed 57%-58%. The loss amount was still slightly larger than win amount per trade, but the ratio resulted in positive cash flow over the 100 trades using the strategy. In one session, I ended up with 178 pips. The most significant advantage is that I do not get stopped too soon and I do not panic. I like the fact I can use it as a long-term or short-term positions. I also like that my screen is much cleaner looking.

 

 

Wed, 07/11/2018 - 5:07pm
 
rwebaz

Clean screens are important. Try assigning your stops to trailing once price has eclipsed your entry point by 50 pts. For example, purchase at 1.25; market goes up to 1.80; raise your stop to cover the cost of entry (breakeven plus a small profit) and click the trailing stop box simultaneously at 1.30. Now, as the trade moves higher, the 50 pt trailing stop gap will adjust automatically. The trade should have enough breathing room to avoid a quick stop-out if the trend continues higher. When the trailing stop is eventually taken out, review the chart once again to see if you still think the uptrend has legs to go. If so, simply repurchase below the stop-out and continue on placing your new stop once again at your breakeven point plus 50 pts when your 2nd entry point is eclipsed.