Lots of old guys around don't use em. I think they are a good tool if you are starting out though (like the first year at least). It takes awhile to get the "feel" and they give you something objective. Most pros you read about, and all funds use em too. So by no means do I think they are a crutch. Use whatever works. Find a setup like you have, and do the same thing over and over. That said, my entries are very objective (trendlines, Fibs, retracements to MA's occaisionally). If I were to just wing it based on feel, I'd be toast. Jay
I am again long GBP/USD (now the RSI agreed) from 1.7873 (now i trade June future) with a gain of more than 100 pips, but I don't know when to exit. Maybe I should make a rule about trailing stops. But how far away from the price? 20 pips? 30 pips? 40 pips? It's not easy.
Tried "a trailing stop" (my trading station don't have it), and took my profit at 1.7962. 90 nice pips.
You are doing very nicely I must say! Regardless if your unsure of your exits currently, over time you will gauge things and perhaps find something to give you definate exit points. Regardless, wouldnt moan too much your making nice profits
Why did I not have more trades in EUR/USD? Because it has been på the high side of MA 50 most of the day - and I took my pips at the top of the terror spike. That time it seemed a good idea then - but not now, where the price is higher...
Barunch, When you have back-tested you system with data was the RSI a good filter. What were the back-tested results of the system, both with & without the RSI filter. In terms of an exit strategy, if you are confident the system provides a good % of wins at 30 pips then you may want to use this as the max profit target at first. From the systematic perspective, you should take a look at the winners, and see the % wins if you let it run to different levels (+25, +30, +35, +40 pips, etc.) at some point you will see a breakdown in the % wins, and the system will start to have a negative result overall. Good luck, - Greg
Hi Greg, When I back-tested, the big moves up or down started when RSI was under 45 og over 55 - not from the middle-zone. But today we had some big swings because of the news, and then RSI is not so relevant, I suppose? Thanks for your help. I will study the winners more to learn about the different levels.
Are you buying and selling when price crosses above or below the moving avg? what is the "10 pip filter"? Thanks in advance - trying to learn a bit more about forex.
Hi tjh, It is a trend-following system, so I buy when the price crosses above MA 50 - and sell when it crosses below. To confirm the cross-over the system waits to buy/sell until the price is 10 pips away from cross-over. That's called a filter. I don't think it's a good idea in a trending market, because you lose 10 pips in profit - but in a trading range it should be.