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A Simple Switching Strategy to Make some good Pips and Solid Money

 
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Skylarhaws

A Simple Switching Strategy to Make some good Pips and Solid Money

So I have tested this strategy out and have found some good success with it. I originally picked it up from the Signals class so some may be familiar with this. Essentially what I do is I pick a few currencies and find which way they are trending and make sure there is enough volitility there to hit my take profits and then I place my trade.

Typically I set a 100 pip take prfit, and a 50 pip stop loss and start out at .01 mini lot. You could easily start out higher if you have the room in your account, but for my testing purposes I started out at .01. At the same time I set up a reverse stop order at the 50 pip stop loss of my live order and set it for a 100 pip take profit at a lot size of .02. If my first order misses, my second order is there to pick up the slack. I will then set up a third revers stop order back where my original order started and set 100 pip take profit and 50 pip stop loss at .03. I simply continue to increase my lot size to a point where I cover my losses and make the money I originally set out to make. I have not gone more than 5 tades without making a profit, but there are ways to come back to 0 if you need to. The lot size that you need increases with each trade and is kind of martingalesq, but the real odds are that the market will move 100 pips one way or the other at some point. Below is a chart that I put together based on the signals class. There are details like commissions, carryover and different currency pair returns, but generally its worked out as below. 

I will trade this with 10 active trades at a time with as many as 10 currencies at one time and just go back and forth. If I hit switch 6 I will change my TP to break even to increase my chances of hitting it and breaking even on the trade, by switch 7 if I have not boken even I will adjust both my contract size and my stop loss to increase my chances of breaking even. If I have not boken even by 7 I cut my losses and continue the pattern back at switch 1. I have run through this a few times now and have booked a small, but solid profit each time. I want to try lowering the take profit pips to increase my contract turnover.

I like this strategy because it takes the emotion out of it for me, I have set rules that tells me when I get out and what I do, now if I could automate this it would be perfect.

 

Switches Take Profit Stop Loss Lot size $/pip Loss on trade Total Loss Profit on Trade net Profit
1 100 -50 0.01 0.1 -5 -5 10 10
2 100 -50 0.02 0.2 -10 -15 20 15
3 100 -50 0.03 0.3 -15 -30 30 15
4 100 -50 0.04 0.4 -20 -50 40 10
5 100 -50 0.06 0.6 -30 -80 60 10
6 100 -50 0.09 0.9 -45 -125 90 10
7 100 -50 0.14 1.4 -70 -195 140 15
8 100 -50 0.21 2.1 -105 -300 210 15
9 100 -50 0.31 3.1 -155 -455 310 10
10 100 -50 0.47 4.7 -235 -690 470 15
Mon, 01/28/2019 - 8:39pm
 
laure.haro

Fascinating, but I'm not making sense of your totals.

 
Skylarhaws

Yeah it’s a bit busy. So at a .01 lot size you can estimate to make about .10 cents a pip. At 100 pips you simply make 10 dollars on the trade or loose 5. If you loose five your next order will enter at a .02 Lot size meaning you will make 20 or loose 10. If your second trade wins you get 20 then minus 5 for your previous loss netting 15. The series continues with the formula:
Profit from trade-sum of previous losses = net profit
Does that help?

 
chkcharts

Interesting

 
Skylarhaws

Even more interesting is that this is a trading strategy that, if not combined with other methods or have the switches set up as multiple contracts, will have a win to loss ratio of less than 50% but still be profitable.

 
shepimak

Just wondering if it's correct to say that 60:40 ratio of average ratio produces the most optimal chances of success if losses were constantly monitored! i.e. risk mitigation is applied on each trade?

 
Rookie

Sheo, I would say for us rookies somewhere between 6-40 and 80/20, we aren't turtle traders, at least not yet. I had to decrease, my win ratio in order to increase my Pips per trade.

If you had the bucks and not in the Beeline you could trade like to old turtles at a 30% win ration...