Simple Price Based Forex System - 5emas forex trading system

Simple Price Based Forex System ~ 5emas forex trading system

Simple Price Based Forex System is a very interesting strategy that utilises no indicators whatsoever, but only price levels and setting of pending orders. The strategy works on higher time frame charts (H1 and above) with any currency pairs and in all market conditions.

Here is how it works:

1. Firstly, we need to calculate a "Key Value" based on the current price of the currency pair. For quotes with 4 decimal places, the key value is the current price multiplied by 10 and then rounded. For quotes with 2 decimal places, the key value is the current price divided by 10 and the rounded.
   
2. Place a pending Buy Order at Current Price + (2 * Key value).
   
3. Place a pending Sell Order at Current Price - (2 * Key value).
   
4. Place a stop-loss for pending Buy Order at Open Price - (2 * Key value).
   
5. Place a stop-loss for pending Sell Order at Open Price + (2 * Key value).
   
6. Take-profit for both orders is calculated similarly to the key value but the current price should be multiplied by 100 and then rounded.
   
7. Place a Trailing Stop to both order at 2.5 * Key value.
   
8. When one of the order get triggered, cancel the other untriggered order.

Lets look at an example of a EUR/USD H4 chart below and how these values should be calculated.

1. The current price is 1.4810 and the current candles open price is 1.4832.
   
2. The price is quoted with 4 decimal places. Therefore, the "Key Value" is calculated as 1.4810 * 10 = 14.8. Rounding it results in 15 pips.
   
3. Pending Buy Order is calculated as 1.4810 + (2 * 15) = 1.4840.
   
4. Pending Sell Order is calculated as 1.4810 - (2 * 15) = 1.4780.
   
5. Stop-loss for pending Buy Order is calculated as 1.4832 - (2 * 15) = 1.4802.
   
6. Stop-loss for pending Sell Order is calculated as 1.4832 + (2 * 15) = 1.4862.
   
7. Take-profit for both pending orders is calculated as 1.4810 * 100 = 148.1, which is
   148 pips after rounding up.
   
8. Therefore, the Take-profit for pending Buy Order is set to 1.4840 + 148 = 1.4988.
   The Take-profit for pending Sell Order is set to 1.4780 - 148 = 1.4632.
   
9. Finally, the Trailing Stop for both orders are set to 2.5 * 15 = 37.5, which is 38 pips after rounding up.

More info for Simple Price Based Forex System ~ 5emas forex trading system:

A combination momentum and mean reversal model based on earnings annoucements - forex android trading system

A combination momentum and mean reversal model based on earnings annoucements ~ forex android trading system

Mark Hulbert of the New York Times just discussed 2 momentum strategies investigated by professors David Aboody, Brett Trueman and Reuven Lehavy.

Strategy A: pick stocks in the top percentile of 12-month returns. Buy them (individually) 5 days before their earnings announcements and sell them just before the announcement.

Strategy B: pick stocks in the top percentile of 12-month returns. Buy them (individually) 5 days immediately after their earnings announcements and hold them for 5 days.

Strategy A is very profitable: the annualized excess return is 47% before costs. (To be taken with a grain of salt due to the large transaction costs associated with trading momentum strategies, especially if small-cap stocks are involved.) Strategy B is very unprofitable: the annualized excess return is -43% before costs.

So what are the ways we can make best use of this research?

Naturally, instead of buying the top percentile after the earnings announcements, we should have shorted the stocks, thus making Strategy B a reversal strategy instead.

Furthermore, what about the bottom percentile of stocks? Should we have shorted them prior to the announcements, and bought them after the announcements? If so, we would have a very nice dollar-strategy for you statistical arbitrageurs out there!
More info for A combination momentum and mean reversal model based on earnings annoucements ~ forex android trading system: