My New System

February 12, 2007 by Trader Rich

I made my first trade today using a very simple system and profited 30 pips. This simple system really is a product of becoming very familiar with the intraday movement of the GBP/USD.

This morning with no economic releases, the GBP pushed downward below Friday's low, 1.9457 but couldn't push any lower than 1.9438. This failure to follow through usually indicates a possible trading opportunity. Timing is very important though. The push downward first occured at 5:15 am EST. I would never take a reverse here. In fact, I wouldn't take a reverse until after a good portion of the US session is complete. My thinking is that if in this case there just aren't enough sellers to push the pair lower. The intraday sellers in recognizing this fact will close their positions either taking profit or a small loss. I don't like to trade greedy and in my experience, taking 30 pips from the GBP/USD is optimal. In my trade today, this proved correct, I got in at 1.9463, out at 1.9493, and the pair hit a high of 1.9495. Below is a chart of the movement this morning. In an attempt to possibly spur some discussion, I'll post a video later.

This is just one way that I look for trading opportunities. I'm not looking at any of the traditional indicators, just the previous session low and the candlesticks for the current session. I'd say that I'm pretty close to trading naked (no lagging indicators.) I'm also of the school of keeping it as simple as possible.

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7 Responses to “My New System”

wiper on February 12th, 2007 3:16 pm

Great trade Rich!
For what reason did you close the trade (near the high)?
Forex2stay on February 12th, 2007 4:37 pm

Hey Rich,

Great Trade!

Sounds like you’ve been hanging out at the forexfactory

Feels pretty good doesn’t it?

Trade Well…
Brent
Rich on February 12th, 2007 4:43 pm

Wiper, I had a 30 pip target, that’s it. From my experience, this is a least greedy and practical profit target.

Thanks Brent… I only hope I can trade full-time like you and travel the world at the same time (Switzerland, etc) You’re living the dream…
Forex Newbie on February 12th, 2007 9:20 pm

Thanks for your honest post. All of us loose money time to time but don’t have the courage to show it to the world.
You are brave enough to share your knowledge and experience with all of us.
Keep up the good work. We need traders like you to show us the right path.
Forex Trader on February 13th, 2007 10:44 am

First let me congratulate to you for a nice trade. I am sure you feel a bit more confident. Trade “naked” requests a milions of hours watching the chart. But it si not enought, becouse sooner or later you will recognize some patterns which will push you to pull the trigger and in about a few seconds later “market” will do exactly opposite move. I have tried it for 18 months (8 hours daily) and without sustainable succes. I have found that using a few and very simple indicators could improve trading decisions significantly.
Rich on February 13th, 2007 10:57 pm

Thanks Forex Newbie… In response to “watch your back”, you are right, you do need to watch the charts for this trade. But based on what I’ve seen with the GBP/USD, I’d only be looking for a reverse sometime during the US session. In this case, I would use a small lot size and place an order if a price candle had previously closed below the previous day’s low or above the previous day’s high. I don’t know if this simple method will pan out or not. I’m having a tough month overall and I have to dig myself out somehow or risk losing what I’ve gain the past 6 months. This isn’t easy but I’m trying everything right now in hopes that in a couple of years, I’ll find my niche.
Graham C on March 5th, 2007 8:10 am

Thanks for the link Rich, appreciated