Author: LR Thomas

How to Backtest the High ROI Trading Systems-Part One

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Here is part 1 of a backtesting mini-course that I have added to the main courses, but can also be bought separately.





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Dazed and Confused-Another Missed Scalp

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In the little survey I just sent out to my readers one of the biggest problems was being able to structure their trading around their lives and I am as guilty of this as anyone.  What with running the blog…

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Potential trade setup

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A pin has formed at a push-pull level on the EurAud, waiting for some more confirmation at present. By the way this is a potential short!   Also watching the EUR/JPY update   currently waiting to see if price reverses and…

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Eurusd Scalp Trade

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  Here is a Eur/usd Scalp trade,  again I missed it but hey that’s life!  what you can see is that as well as the five min S/R zones there was a five minute channel that provided further confirmation of…

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Charles Scalping Question

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Charles sent me a chart of a 4 hour megaphone channel for my opinion. Within the 4 hour channel was an hourly channel that started to fail but would have yielded a 1-3 ROI trade depending on the entry.  By…

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Re Potential Trades

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I will be looking for upcoming trades in the pairs below over the next two weeks.  The EURJPY has had a long run and has reversed off the top channel line, will be looking for a low risk trade to…

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Re Shandys question

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“EURUSD – how does this look for a Push / Pull formation, context is it has broken out of the previous upward channel and previous Support has now turned Resistance, the re-test of which produced the 1,2,3 candle formation. And…

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Eur/Usd Hourly Scalp

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Just noticed this Eur/Usd trade as I was checking my charts this morning, missed it unfortunately but it would have given a nice 1-3 ROI.  Notice how the four hour turquoise resistance above was rejected and how price is heading…

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High ROI Scalp Trade AUD/USD

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When nothing much is happening on the daily charts there are still some good trades to be had on the hourly charts.  See below.     Due to the daily support line running through the middle the trade was moved…

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When is a Good Time to Use Your Intuition.

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Here is a good video interview of Daniel Kahneman author of Thinking Fast and Slow. I got one really good tip which is that if you are a person who uses your gut to make decisions it’s important to know in which situations you get good results from using your intuition.  Trading is more specifically discussed at about 7 minutes into the video.

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Re: How Do I Draw Trend Lines

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In answer to Charles’ question, “Are you using Demark trend lines which look at just the last 2 points, or are you using conventional trend lines based on “The lowest low to the highest low before the highest high, and…

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Question from Charles about S/R

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Here is Charles’s question. “The issue that I have is how you are drawing support and resistance. What are the rules that you are using so that I can use the same rules to test the method.” I will use…

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Putting it all together.

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This post is to show how the different systems can slot together to get an even higher ROI by using a scalping stoploss to enter a 10XROI trade.   Double Top at Monthly Resistance Above is a push-pull setup, but…

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Re Vlady 1974 Post Scalping using the Push-Pull

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Vlady 1974 posted a scalp trade on the thread using the push-pull pattern on the 15 minute time frame to take some pips out of the strong upward daily momentum.  I have a few comments about this.  Although this is…

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GBP/USD Holiday Update

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My last GBP/USD trade ended in a small loss, but it is interesting to see what the GBP/USD did over the holiday season.  The pull back which stopped me out turned out to be a test of the daily wedge…

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Re Deanoracers post

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Deanoracer has found a beautiful reversal push-pull setup see below, however I would like to explore the context of the trade more thoroughly see my chart below his.     In this chart there was a downward daily channel which…

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Re SK2

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In answer to SK2, no this is not a setup

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Re Dons Question

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The general view is that one shouldn’t trade during the holidays, however sometimes there can be massive moves during those times, I would say it depends if there are trades to take. I however have stopped trading, will be looking…

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Re Pipskateers’ answer to Don555

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Don555 asked a question on the Forex Factory thread and Pipskateer answered him, see below.  I have put my answer at the end.   The most important thing to bear in mind is that the trades have very small stop…

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Eur/Aud Trade closed on 12th December

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I forgot to post charts of a recent trade on the EUR/AUD, the same setup as the previous GBP/USD but this one worked! The context was the break of the trend line of a large daily wedge, with sideways movement…

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GBP/USD Update

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Here is the final update on the GBP/USD trade, as you will know from the last post, I was stopped out at -12 pips.   What is interesting is that the trade failed because price broke through that level and…

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Potential Trade Alert

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A push-pull level has been hit on the daily GBP/USD, as yet there is no confirmation on the hourly charts but it is worth keeping an eye on that level as it may turn into a trade for the Asian…

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GBP/CAD Trade

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Shandy from Forex factory presented a  GBP/CAD setup, here is my take on the trade, The second candle wasn’t quite as large as I like to see but large enough. The hourly chart at first glance did not present horizontal…

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Shandys post on Eur/Cad

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Shandy is right about the push-pull pattern but lets look at the context of the trade.  The first chart is a monthly and daily side by side, you will see that the low of the move coincides with a Monthly…

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Shandy’s posts

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Here are some comments on Shandy’s posts on Forex Factory He is right about this trade, the only issue I have is that the move is getting a little old.  I found two earlier entries, see charts below .  The…

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Kibles’ question on Forex Factory

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“I do like the idea of this trading method, “but” entering on the hourly chart has a couple of glitches as; when looking at the daily chart we wait for momentum for a couple of bars and then when bar…

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Trade Update

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A trade that I identified and unfortunately missed was posted on the Forex Factory thread. (see below). I though I would post an update to that trade, I have marked the entry levels with solid purple lines, notice that price…

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Taking Losses and Loving It!

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Well no I’m not serious, I don’t expect you to love taking losses, but at the very least in trading you need to truly accept losses because if you can’t accept losses then you always have an inner conflict about taking the trade and it can lead to self-sabotage.  The higher the ROI of your trading system, the easier it should be to accept a loss while at the same time doing everything you can to make sure your trade has the best chance of succeeding.  With the 10xroi Trading system, you could lose 80% of trades while only trading 1% on a trade and still make more than you could earn in most other financial investments.  If you can make money while losing 80% of trades then that should make you feel a whole lot more relaxed about taking a loss.

Here is a  sequence of 10 trades just trading 1% and having 2 random wins of 10XROI  using $1000

L,L,L,L,W,L,L,L,W,L

990,980,970,960,1056,1046,1035,1139,1127

Profit = $127 or 12.7 %

How many trading systems do you know where you could lose 80% of the time and still make a comfortable profit?

 

 

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The Benefit of Multiple Eyes

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I have found an unexpected benefit to writing these books, my readers on the Forex Factory thread are actively looking for trades and are now drawing these trades to my attention.  I took one today, Thanks 1101.  Here is the chart.  Keep it up guys.

euraud_001

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1101s trade 12th Feb 2013

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Here is 1101s chart from the Forex Factory thread of the Eur/Aud Chart.  He has taken a reversal trade however his charts are different from mine and I can’t see a push-pull setup as we don’t use the Sunday candle.  However he is correct about the context of this trade.

1101a_chart

Here are my reasons for getting in the trade, unfortunately I missed it this morning !!  Just didn’t see it!

euraud

The daily chart on the right shows the brown dashed line as monthly resistance, it formed a strong level of resistance.  There was also a parabolic rise to this level on the daily chart, indicating a strong downwards move if price reversed.  I have marked the green push-pull level however price never pulled back to that level but there was an entry using the TAYJ system of a four hour break of a trend line and a horizontal break at the top of the parabolic move.  The stop loss would sit behind the four hour breakout candle.  The take profit would be the 1.44 area which lines up with the bottom of the parabolic move.  This would give about a 1-8 ROI on the trade NICE!

 

This trade has now pulled back and created a pin at the support area which now adds confirmation to the short trade spotted by 1101, I entered the trade at the close of the four hour candle on my trading platform which has much smaller spreads but I have recreated it here on the charts.  The stop loss is above the pin and is only 40 pips away from the entry.  I have placed the take profit at the low of the parabolic at the 1.4530 level to give a 1-8.5 ROI the reason for not giving it a 1-10 ROI and letting it run to 1.4460 is that there is a strong trend line in the way, see the lowest chart.  Whatever happens win or lose this is a good trade!

euraud_001

trendline_euraud

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Patience is The Virtue!

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In the 10XROI Trading system, the money management system and the high ROI compensate for the scarcity of trades.  If you really understand the power of being able to get a 50% win rate and a 10XROI with this system…

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Be Waters Charts

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I am beginning to have an issue with traders who are trying to learn the system and using their own chart setup, I would suggest you adopt my template at least until you really have the hang of the system.

Here are some charts from be water on Forex Factory, they make absolute sense to him but I see something different.

Be waters charts are below.  Monthly, Daily and Hourly.

bewater_monthly

bewater_daily

bewater_hourly

 

Here are my monthly and daily charts below.

gbpusd

 

As you can see from my monthly chart the GBPUSD is hitting the brown monthly trend line, now it might break through but it hasn’t broken through yet and it could easily do a false break and reverse at this point.  I marked with a green arrow the push-pull that had a valid context with the green arrow.

 

 

 

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Shandys Chart

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Here is a chart and comment from Shandy

shandy_origianl

Shandy is only using horizontal support and resistance, and ignoring the patterns created by the diagonal trend lines which are creating support.  Price has not yet broken down so the context is not yet correct.  I have marked a previous push-pull with the correct context,

shandys_post

 

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ZA Traders Chart

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ZA trader posted a chart and comment see below.

“Another text book entry, this one gave an entry earlier today, but buying so high up(into 1.5) is just too risky for me…”

za_original

 

He is correct about not taking this pattern because of the context. it is hitting against a stong support area but also the momentum of the move has evaporated and is unlikely to thrust through resistance.  The context is not right for a trade.

za_trader_mine

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1101s Chart

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Here is 1101s take on a developing situation on the GBPCHF. see below.

1101_original

1101 is correct about the context GBPCHF could be due for a huge break of resistance which be the correct conditions for a pushpull.

1101

 

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Analysing DeepFXs Chart

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Deepfx at Forex Factory posted this chart yesterday, he puts a lot of emphasis on the support area hit by the PushPull candle see below.

deepfx_original

 

I agree with this setup but I have some other reasons besides the support level.  Price made a huge outside candle at the trend line of a wedge pattern see below.The outside candle acted as the ‘push’ candle in this scenario.

 

deepfx_gbpusd

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Protecting Against Weekend Gapping

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The 10XRoi Trading System  and the Trade Around Your Job System provide trades that can last anything up to ten days, which means they can stay open over the weekend.  Most of the time there is no particular gap after a weekend but sometimes you get something like this which could potentially wipe out your account.

gap

Now based in the UK as I am this problem can be solved by using a guaranteed stop loss which many spread betting companies provide.  The stop loss is not guaranteed after you move it to break even but it makes little difference because you usually don’t move your stop loss until you are well into the trade.

However there are other ways to protect yourself even if you can’t use a guaranteed stop loss.  Most of the time you will find that the Sunday night open is at around the same level as Fridays close or it moves to it pretty quickly.  You could simply close out your trade either on Friday afternoon ideally after a pull back.  You could well find that it has gapped in your favor and pulled back by Sunday when your reenter the trade and replace your stop loss, giving you extra pips.  The downside to this is that the trade could have moved  so far in your favor that you miss out on the trade.

weekend_gapping

 

The other way to protect yourself is to have a brokerage account which allows very high leverage, and offers account protection in that you can never lose more than is in your account.

You then make sure that you have the minimum in the account needed to cover the trade so if you get margined out by a large weekend gap you only lose the size of the trade or as near as possible.

If you are based in the US then you need a broker outside the US in order to get the high leverage which is also governed by the financial authorities in their country.  I have a list of some of these brokers in my Kindle book Learn to trade Forex Without Losing your Shirt.

 

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Shandy Question

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Here is a question and chart posted by Shandy on the Forex factory 10XROI thread  I have posted my chart and answer to his question underneath.

“Ok so attempt number 2 here in identifying a push-pull formation – CADJPY Daily, candles marked as 1,2,3 with 3 being the red candle. Or would this be a 1,2,3,4 formation, with the candle 1 being the large bull candle to the left of where I have number 1 now?

And if this is a valid formation, where would the “trigger” line be placed?”

shandy_3.1

Here is my chart with the moving averages and trend line break which helps to determine momentum, you will notice there was a trade prior to the one Shandy is pointing out which because it was closer to the source of momentum was a better trade.  However back to the candle pattern recognition.  Candle 1 is the pin after the pullback,candle 2 is always the Push candle and in this instance the pull back to the close of Candle 1 was at the low of candle three.  I have marked the push-pull level in green.  Upcoming resistance is the red dashed line.

shandy_3

 

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Shandy 2

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Shandy was referring to this pattern in his post but he numbered the candles incorrectly,also, although I am unable to show it because I don’t know the pair or the date, if you look closely you will see that an upwards wedge has formed and the candles that Shandy is referring to are being rejected, hence the large wicks.  This context is not suitable for an entry.  In any case  I have numbered the candles as they should be, see below.shandy_2

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Deanoracers question

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Deanoracer is correct about the candle pattern but the context is not correct, the moving averages are threading and there is no indication of momentum.  Context first then push-pull pattern.

deanoracer

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Shandys question

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This post is to answer Shandys question on the 10XROI thread on Forex Factory, he numbered the candles incorrectly so I have posted the corrected image below.  We would look for daily entries at the low of candle 3.

 

shandys_question

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