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Gold Mechanical trading strategy

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Gold Mechanical trading strategy in Trading Systems_xx
Hi traders,

Will share here a mechanical trading strategy for gold that I am currently using in a live environment. This is obviously no holy grail or "quick road to riches" strategy. You Will not get rich fast with it, but I find that the returns are pretty decent for a fully mechanical strategy. 

Here are the returns that could have been made since 2005:
2005: 15.2%
2006: 16.1%
2007: 23.7%
2008: 42.9%
2009: 44.4%
2010: 19.4%
2011: 41.2%
2012: 44.1%
2013: 132.9%
2014: 15.2%
2015: 21.1%
2016: 67.6%
2017: 5.8%
2018 till today: 17.3%

Worst year was 2017 with a 5.8% return for a 35% DD. This can be considered as atypical as the highest second DD for the period was around 8/9%. So the system can be considered quite safe. If you check the Gold chart for 2017 you will
see that gold was ranging for a pretty long period, the largest one since 2005.

All in all, I see these returns as decent for what is a fully mechanical period.

Hopefully I have time tomorrow and will disclose the full system.

Stay tunned.








Linkback: https://www.forex.zone/trading-systems/10/gold-mechanical-trading-strategy/178/
#1 - August 14, 2018, 04:26:16 PM

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Interesting. Please post the details of the trading system when you get time.
#2 - August 14, 2018, 04:36:09 PM

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Here it goes.

First and foremost, this is not my own trading strategy. I found it in another well known Forex forum. The thread went well but finished in the dust bin when the thread starter and other participating members blew up their account. Is this a bad startegy ? No, but the money management was extremely risky. It was based on martingale and as such, was deemed to fail. I will later on review that. Let start first with the strategy itself:

Instrument: Gold
Timeframe: H4
Indicators needed: 
1. Ichimoku 9,26,60
2. Custom Heiken Ashi candles
3. Smoothed MA applied to High (5,2)
4  Smoothed MA applied to Low (5,2)
#3 - August 15, 2018, 10:12:04 AM
« Last Edit: August 15, 2018, 10:14:37 AM by Fbird »

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Gold Mechanical trading strategy in Trading Systems_clip
Buy entry at market once a HA candlle closes above Senkou Span B and above 5 SMA applied to high.
Sell entry at market once a HA candle closes below Senkou Span A and below 5 SMA applied to low.
No SL/no TP. Exit Will occur whenever a HA closes below 5 SMA applied to Low for buy trades and above 5 SMA applied to High for Sell Trades.

Money management: the original thread used an aggressive martingale scheme (for each 1000$ in the account, first trade at 0.01 lot, if it is a loser, 2nd trade at 0.06, 3rd trade at 0.11 lot etc...). This is very risky and sooner or later will blow the account. I recommend the following money management rules with smooth martingale which proved to reach max dd of 35% since 2005:

First trade at 0.01 lot for each 1000$ in the account and then, increment the risk by 0.01 lot (i.e. 0.02 for the 2nd trade, 0.03 for the third trade etc...). The worst sequence occurred in 2017 with 11 losers in a row. A way to avoid such bad ranging period is to draw support and resistance lines on a normal candle chart and enter only when there is a breakout. In you looked at the chart in 2017, you will see that it was quite easy to do.

In an important point of this money management strategy is to stop the martingale cycle whenever you have a positive trade. Our goal here is first to protect our capital. For instance, if you 1st trade lose 100$, your 2nd trade lose 120$ and your 3rd trade win 180$. Stop the cycle and start again at 0.01. Yes, this cycle lose 40$ but sooner or later you'll catch a big trend run and your 3rd trade will cover the previous loses and more.

Just want to mention as well that I do not take into account the first H4 candle of the day as it is sleep time for me (the backtest I indicated previously reflects that). If this candle triggers a trade, I will enter on the close of the second candle if conditions are still valid. 

I let herebelow the mt4 template, although it is easy to build. Will show a trade example in the following post.







#4 - August 15, 2018, 10:40:59 AM
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Here attached is the trade example from last month. Green lines show entries and red lines show exit.
First trade resulted in a loss of € 8 for 0.01 lot. Second trade shows profit of €36 for 0.02 lot. Net P&L of €28.

As i said, this is not a system that will make you rich fast, but profit are still decent with a rather conservative money management strategy.

If you have any question, please post and I will do my best to answer.

Cheers all.
#5 - August 15, 2018, 11:01:28 AM
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« Last Edit: August 15, 2018, 11:03:47 AM by Fbird »

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Gold Mechanical trading strategy in Trading Systems_clip
hello Fbird,

what is the right hand top corner of chart represent? Is it useful for trading?

Close in XXX, Spread XXX

see attachment
#6 - August 19, 2018, 01:39:15 PM
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Gold Mechanical trading strategy in Trading Systems_clip
hello Fbird,

what is the right hand top corner of chart represent? Is it useful for trading?

Close in XXX, Spread XXX

see attachment
Hi Steve,

This is just an indicator that shows time to candle close and current spread. As I trade manually, I like to have it attached to the chart. You will find it below. Cheers.
#7 - August 20, 2018, 09:27:04 AM
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Last cycle of trades was closed lastFriday (see chart attached, Green lines are entries):

First trade: 0.01 lot ; R = -5.9€
Second trade: 0.02 lot ; R = -9.4 €
Third trade: 0.03 lot ; R = +60.7 €
#8 - August 20, 2018, 09:40:34 AM
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good strategy and very suitable to be learned by novice traders like me
#9 - February 03, 2019, 06:42:55 PM

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a good strategy for trading on forex but has this starategi been tested for profit?
#10 - February 04, 2019, 08:12:46 AM

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a good strategy for trading on forex but has this starategi been tested for profit?
good night


Whatever strategy we will use, we must try an account demo or contest a demo account. If indeed the results are good and we can use them, then we can make this strategy a tool to generate dollars in forex.
#11 - February 04, 2019, 12:00:23 PM

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Good system trading but sometimes not suitable if used by another trader, maybe these system trading can work well for you, but if used another trader might getting difference result, why?  because different psychology trading and also might change money management, and also at the same time will difficult to make same entries each other, one might already make entries, but another still delay, because maybe requote etc, while each tick price movement already worth the risk 
#12 - February 04, 2019, 01:46:52 PM

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I noticed this strategy more in calculating the percentage of profits and losses, this is more a calculation mechanism but can be better if you add other techniques or other strategies to maximize this technique
#13 - February 05, 2019, 05:38:08 AM

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hai dude , i think market working 24 hour in the 5 days your enter any time and start trading this is the depend on you working on which market some time Asian market moving good some time European market moving good but many time gold, oil and index and some other pairs moving fast in the European market so i am some agree with you if you trade on the gold and your part time trader then European market is best for the trading but if we are avoid the trading when market is very fast and wetting for the best trading time this is best when market fast then trading is very risky many time we are enter when market fast and lose all money so avoid then i think trading is not easy business this business is over all risky business and total depend on our experience because good experience avoid to the lose and less experience going to the lose i think market is not most important rule experience important rule in the trading business , good luck ,
#14 - February 06, 2019, 11:17:32 AM

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This trading system can be applied to trade in pairs other than gold, if indeed it must be used for trading gold whether it can be used on another timeframe
#15 - February 11, 2019, 07:51:58 AM

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