Daily Range Stops
I agree with your stop loss and take profit point because SL is according to your account money(how much you can tolerate)
Thanks for these notes, truly understanding how your EA works is definitely the first step to being successful with it
hi,
if a buy order is triggered,do you cancel the sell order ? whats the logic in leaving 2 trades open ?
d.
OK,IM GETTING THIS ! ignore previous post.only down side to this is the time needed to nurse the trade.if using on a few different pairs its very difficult to stay on top of.we need an EA.Any one capable of adapting one that ive got which would be ideal,just needs tweaking.
This would seem to be too difficult for anyone here to create an ea for. And manually it is next to impossible. But it does look like a great idea. What are we going to do????????????
Anyone trading this system with success?
how long have you been using this ?
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This trading method was being shared a long time ago. I think it has not got the attention which it deserved to because this method is indeed a potential money maker. We are going to use the daily range indicator attached to the bottom of this post.
Place the indicator on your chart and it will give you the daily range value of the current pair... For example, if the indicator gives you a value of 100 for eurusd, then it means that the daily range for the eurusd is 100 pips. What we have to do is to calculate a usable value from this value and we are just going to divide it in half. So we get 50 pips and this will be the value we are going to work with. This is just an example, the main thing to learn here is to take the daily range value given by the indicator and divide it by 2.
The Daily Open
We need to determine the OPEN of the NEW DAILY CANDLE. We are working on the daily chart. The time this OPEN occurs will be different from broker to broker. After you have determine the time your broker closes the old daily bar and opens the new one, you will just need to wait for this time in order to catch this open.
We will consider the eurusd example above and continue on it. The value we go was 50 pips. So, now we place a pending BUY order 50 pips above the DAILY OPEN (new) and 50 pips below the DAILY OPEN. So at this point we have 2 pending orders, one sitting above the open and the other sitting below the open.
The heart of the method
Now this is the most important part which you need to read well and understand. The pending orders we have placed should not be fixed but they need to be dynamic. We will have to move them as there is a change in the price in such a way that we are going to trap the price and one or both orders will be triggered. What we do is, if the price move 10 pips against any of the orders, we move that orders by 10 pips closer to the open. For example, if price has moved down 30 pips, then we will need to move the pending BUY order 30 pips down, so it will become closer to the open of the daily candle as it will only be 20 pips away from it. The same applies for the SELL order. We are going to trail it each time there is a 10 pips move against any of the orders. At some point, we are sure that any of the orders are going to be triggered. To make it clearer, you might want to read the stepwise example below:
1) First a BUY stop is placed 50 pips above the open and a SHORT stop is placed 50 pips below the open
2) The price then goes 10 pips up, and with it, the entry price of the SHORT stop (now officially 40 pips below the open)
3) The price retreats and then goes down 30 pips, so now your BUY stop entry price is only 20 pips above the opening price and only 10 pips away from triggering your SHORT stop.
Stoploss and Takeprofit
We are going to use fixed stoploss in the system. For the buy, we will use the low of the daily candle as stoploss and for the sell, we will use the High of the daily candle. As for the takeprofit, we will use the same value we used for the initial pending orders, which is the daily range divided by 2. In our example, our takeprofit will be 50. We can use a trailing stop which is half the value of the takeprofit and in our example, it will be 25 pips. These are not hard rigid rules, you can choose to use other money management techniques which suits your style.
Final Note
You should take note that we are going to place ONLY these 2 orders per pair per day. Either these orders get closed in profit or they get stopped by the stoploss. Whatever happen, when it happen, we close the platform and we wait for the next open to try another session. Also, you can stop trailing the orders when they reach the OPEN of the daily candle. However, if you want to continue moving the pending orders beyond the OPEN, then you can experiment with it as well. Just pay attention to good money management. This trading method is not as complex as it might seem here. Take some time to read it until you can grasp the essence of the method, then open a demo account and practice it for some time until you become confident enough with it to move to the next level. Good luck with your trading.