Simple's Green Room

[boca_bobby]

"The System"

Ok All, here is what I've been doing. It's basically a 5 step process that I will lay out with pictures. So be sure to scroll down to read this entire post. This system is bit and pieces of many things we have discussed over the past. All I have done is try to put it all into a mixing bowl and come up with something that is fairly simple as well as effective. This system is NOT a 100% full proof idea that you will only see gains. There are losses but they are usually manageable and overall you should see a portfolio trend in a positive direction.

First some general rules for entry tickets. I try to only trade one pair at a time. I take a fairly aggressive stance with my first entry as I use 25% of my portfolio size for the number of units traded. I sometimes will double up if a trade instantly goes against me. But for this to happen, my first position has to be at least 25 pips or better in the red AND I still feel strongly that eventually the trade will go in my direction and my target price can be achieved.

So here we go!

Step #1

I open my Oanda web platform and instantly click the Technical Analysis icon located on the top left side of the screen. See the next picture for a look:




Step #2

This will pull up a tab in your browser. The first thing I do is change the "Set minimum % probability" to 70%. The default is 60% but we want plays that gives us just great chance of success. We could raise the # even higher but it starts to give us less and less pairs as we raise the % upwards.

After we set it to 70%, I look for regular pairs to plays. Regular pairs is subjective to each individual so I'll leave that up to you. But try to stay away from that Zimbabwe Dollar that Simplegreen loves so much. I haven't had as much success as he has with that position.

In today's example I choose USD/JPY as my pair mostly because of the 78% probability of us getting a successful trade. Notice how it gives us a target of 117.14. That's the best we could expect so don't try for more! This system gives lots of opportunities so there is no need to get greedy. Just take what is available and move on.

See the next picture:




Step #3

Next we click the "Volatility Analysis" tab. We enter our pair of USDJPY and then turn to the daily bar. These are the prices that we can expect the pair to trade between over the next 24 hours. We use these projections as our ultimate target and stop prices. Notice how step #2 gave us a lower target price. WE USE THE LESSER OF THE TARGET PRICES TO SET OUR TP. We only want to get a quick gainer and move on. Remember that we get lots of set ups so there is no need to get greedy. Fight the urge to go for broke.

See the next picture:



Step #4

We then turn to our MT4 platform. Look at the H4 chart. In our example we are looking to go short. Is the current price below the tunnel? The tunnel is the charting method described by Simplegreen on many occasions so if you are not sure review the method before you use this system. In our case the answer is yes so we can go onto the final step. If the answer is no then find another play.

So if you are going short, the price needs to be below the tunnel. And vice versa if you are going long.

See the next picture:



Step #5

Now we drill down to the M15 and M5 charts for our entry. Basically what we want is an overextended TDI. See the next picture and then continue to scroll down for more info:




Step #5 is the trickiest part. We don't always have time to sit around and wait for the perfect entry like our chart shows. You can still enter but know that your greatest gains are seen if you are patient.

I find this system works extremely well for overnight type of trades. For an extra option you can look to see if your pair will have any critical news coming out in the next 24 hours. If it does I would highly suggest just sitting on your hands. We saw what happened with that Swiss incident. No need to be a cowboy. The patient will always get the best results.

Many times I take a trade in the early evening and have to wait until the next morning before we see get our results. I'm ok with that. I hope this helps you.

Good Luck!!