So rather dismayed to see the charts this morning. Such a huge drop on EUR and GBP on Friday meant that Monday morning was in all probability going be a little quiet; retracing to some point unknown.
I had an eye on the charts from 08:00 to Midday but ended up doing some accounting and admin instead as my 4 pairs nothing was really setting up. I have learnt not go to ferreting around the Forex marketplace looking for setups………I cannot juggle so many possibilities and charts. Fairplay to those that can.
So what have I changed in my approach from 2 weeks ago and over 6 months of backtesting and nearly 1000 trades ?
1) Added a 1000ema to my 1min chart to give me better yes/no trade line and keep me on the side of better setups.
2) Removed MACD Indicator. I kept a note of the position of the Histogram on a number of trades and actually saw no correlation between trade success and the position of the signal line or Histogram.
3) My target for each trade is now 3x Stop Loss. I will take 3 trades each between 0.3% – 0.5% of my equity size and scale out the trade.
4) Better SL Management. Move my SL to within 5pips of entry after T1 is reached or my entry has been tested once.
5) Trading Hours for my business will predominantly be 08:00 -> Midday
My backtesting has shown that I will have a maximum of 1-2 trades per day….maybe up to 2 days with nothing. Also that with this approach I have a profitability edge of 60/40. Trades should last on average 1hr 20mins if they go the distance and that my most profitable period should be between 08:00 and Midday. Trades that were taken between 06:00 and 08:00 only moved to T2 and beyond 25% of the time. Whereas setups occurring in The Time Zone were going the full hog 50% of the time. Other profitable times turned out to be 14:00 -> 15:00 and 16:00 ->18:00.
Lots to do: Need to revise my Trading plan and update my posters on the wall
All the best