A little about me
I've been trading for over 10 years in Forex, have busted several accounts, made a multitude of mistakes, read a dozen books, bought scores of EA's which promised the world, and I've spent thousands of dollars on various courses. I work full time in a regular job and I dont trade professionally for a living - to be honest, I don't even trade much these days, but for awhile now, I haven't been breaking my account and it's been slowly growing. So why am I here?
I still believe there is a system out there which can bring consistent returns, where I trade as little as possible. Most ordinary folk have lives - they have kids, a family, a regular job, commitments etc, so that leaves little time to constantly monitor each candle. For the guys who can watch the 5M chart every day, I say "good luck to you"... but I would rather trade for 30 minutes in the morning and not look at the charts again till the next day - each to their own.
This thread will be a work in progress, I will lay out the rules of the system, I'll post a few examples, and that will be that. You are welcome to fine tune/ finesse/ tweak /code to your hearts content. If you have something of value to add, or if you find a better way to refine entry or exits, or automate it, then please feel free to post.
I don't use many indicators at all, which I guess makes this a weird system to have on a forum dedicated to indicators and coding, lol.
COMBINED TECHNICAL SCORE SYSTEM (CTS)
What is it?
A combination of technical signals and patterns which give you confidence to enter a trade.
What time frame?
Any time frame. Higher probability of success on 1HR,4HR and Daily.
Any. Forex, crypto, shares.
Cypher, Gartly, Bat, Double/Triple Top, SR bouce/break, Doji/ Pin Bar Candles
RSI, Candle stick, EMA(50), S&R Lines
Each confirmation of a signal adds to the combined technical score. A CTS of 4 is a reasonable reason to enter a trade. A lower score is still ok depending on your risk appetite and more suited to aggressive traders, or traders who can reduce their initial position size.
Usually above/below previous support or resistance. Can be above 113.3% fib extension, but not usually greater than 127.2% Fib extensions from the major swing.
No trade is entered without at least a 1:1 Risk/Reward ratio.
T1 at 38.2% of the last swing
T2 at 61.8% or previous S/R of the last swing
SL moves to BE at 38.2%
Pattern Completion = 2 points
RSI over-bought or over-sold = 1 point
Previous support or resistance = 1 point
Fib cluster = 1 point
EMA Direction agreement = 1 point
Divergence = 1 point
Candle reversal pattern (doji, pin bar, shooting star etc)
Of strict importance is to follow your plan.
Honour your stops and profit targets.
Applaud each act of discipline and sticking to your rules, no matter the result.
If you would like me to explain the Harmonic patterns in detail, we can do that, or I can direct you to a good site - Im not here to reinvent the wheel. What's important is that you follow the rules for recognising the patterns. Measure your impulse legs and swings from obvious swing points (fractals can help). There are some indicators which can draw the patterns for you I think (like ZUP or Pattern Recognition Indicators, but I dont have experience with them and if you did use them, be sure to check the pattern and fib measurements are correct).
Here is an example on the USDJPY 4HR chart earlier this year.
Cypher Pattern Completion - 2 points
RSI oversold - 1 point
Previous support (minor) line on 1 HR chart - 1 point
Total = 4 points ie a reasonable excuse to go long.
- No chart clutter with a million signals.
- You can see the pattern forming days in advance so you can set limit orders, stop losses and profit targets.
- The harmonic patterns alone have win rates from 65% upwards... some say the Cypher is as high as 85%.
More to come.