I know forex isn't much of an active section in this forum, but still I thought I could contribute something towards this lively community.
First off, let me tell you a bit about my trading style. I am a chartist and rely mainly on price action. Indicators are just that, indications of price. They try to smooth out what otherwise might be hard to extrapolate from price action. I use indicators as a gauge to get the feel for the price action. Ask yourself, if the price is moving towards the indicators or away from them? How does price react to your indicators after big moves? Do they perform well in a particular session.
Before I move on to the system, as a pure chartist, I urge you to pick a few indicators and just watch and study them and you may find yourself getting a feel for the price action. Please don't try one indicator for a few trades, then something else for the next. Pick something and master it. As for me, the trading tool I use for entering the market and determining SL and TP is price. But, for the sake of those indicator lovers, I have added some tried and tested ones in my system.
So, onto the psychological numbers. What are they? In a nutshell, these are price levels with large orders in line to be filled. Eventually, these orders will aid in moving the market in a particular direction. You should know that each candlestick is a representation of the fear and greed of the participants in the market. Forex charts allow us to look in time and see what reaction a certain market had to news releases, data or any event of a particular day for that matter. Simply speaking, charts let us look into the degree of emotion from market participants. Putting price into this equation can start with the understanding that certain levels are psychologically driven and hence, I call these psychological numbers. Examples of these numbers are 226.50, 99.00, 110.50, 2.0150, 1.0900 and so on (basically, whole and half marks).----------PSYCHO SYSTEM EXPLAINED----------
Time Frame: 15 mins
Indicators: Awesome & Bollinger Bands.
Currency Pair: GBP/JPY & GBP/USD
Targets: 100pips & 75pips respectively.
Stop Loss: 10 pips + spread.
Trade the Tokyo session and the London session.
Bollinger Bands Setting (Standard)
Apply to Close
Awesome Indicator Setting (Standard)LONG ENTRY--
When the whole candle (candle a) is on the psychological support line (ie 1.0800) and closes above it. Then the next candle should move 5-8 pips above (candle a) upon when you enter the market. Awesome indicator should be green at (candle a). If price has not hit the overbought band (upper band) of Bollinger, then wait till it does, upon when you enter the market. SHORT ENTRY--
When the whole candle (candle a) is on the psychological resistance line (ie 1.0800) and closes below it. Then the next candle should move 5-8 pips below (candle a) upon when you enter the market. Awesome indicator should be red at (candle a). If price has not hit the oversold band (lower band) of Bollinger, then wait till it does, upon when you enter the market.
To filter out false signals, make sure you satisfy both the 5-8 pip movement and the Bollinger Band rule. Also, once you are on +30 pips, move your stop so that you take atleast +10pips. This is to protect against evil retracements.
I have been using this system for some time now with a lot of success. However, I urge everyone to trade this system on a demo account before putting any real money. And if and when you do so, please do it at your own risk. Remember that COPY AND PASTE disclaimer that you see on every HYIP site? LOL)))
Let me post a few screenshots of my trades.TRADING RESULTS USING MY PSYCHO SYSTEM
No of Trades: 38 Trades
From: 5/11/2007 To: 20/11/2007
Number of +10 pips: 17
Number of -13 pips: 9
Number of +75 pips: 12Overall PIPS: +953 pips
This post has been edited by mazdaz: Dec 4 2007, 06:11 AM