To use this method you don't need to be an expert.. This is EXTREMELY simple so that anyone can follow it.A wonderful thing about FOREX KEY SYSTEM is that the trade is entered at the same time every single day!While the method can be used on many different currency pairs we recommend the EURUSD. Why EURUSD? The EURUSD is extremely liquid and usually has among the tightest pip spreads of any pair.
If you do use the FOREXKEY on pairs other than the EURUSD then you may want to use a different "StartTime", and perhaps different pip amounts for the target and stop loss. More advanced traders can experiment with this at their own discretion, but we will now focus on the EURUSD for the description of this method.
The System:
The Key Bar indicator will display a LONG (buy) or SHORT (sell) entry signal at 10:00am EDT (New York Time). See example below. Apply the Key Bar Indicator to a 5 minute EURUSD chart. The input called, "StartTime" is defaulted to 10:00am. This is 10:00am EDT (New York Time). IMPORTANT: If you are in a time zone other than EDT (New York Time) you will need to adjust the "StartTime" by the number of hours difference your time zone is. For example: If you are in a time zone that is 3 hours behind New York then you'd set the input to 7:00am (0700). if you're in a time zone that is 6 hours ahead of New York then you'd set the input to 1600 hours (4pm), etc, etc. Just make sure the "StartTime" is the equivalent to 10:00am in New York. Every trade is taken at this time each day.
EXAMPLE:
ENTERING THE TRADE:
If at the StartTime (10:00am New York time) the Key bar indicator displays a RED bar then you will sell short on the open of the NEXT bar. If at the StartTime the Key bar indicator displays a BLUE/CYAN bar then you will BUY long on the open of the NEXT bar. Yes, it's that simple!
EXITING THE TRADE method 1:
Exiting the trade is a two part process:
1) Profit Target and Stop Loss: As soon as the trade is entered use a 50 pip profit target and a 50 pip stop loss for both long and short positions.
This is considered a 1:1 (1to1) "risk to reward ratio" for the target and stop loss. This is considered a more professional approach than using a system where the stop loss is, for example, eight times that of the target so that a losing trade wipes out eight+ winners. In my personal experience I've only seen what I consider to be unrealistic "forex robots" and other "forex systems" use that type of trade management methodology in order to tout a very high percentage of profitable trades. In other words you can have a 90% winning system that loses more than it makes if one loser wipes out 10+ winners due to a 10 pip target and a 100 pip stop loss. The Forex Key System is not that type of system, it uses a 50 pip target and a 50 pip stop loss (1 loser wipes out 1 winner, and each winning trade recoups each losing trade). More advanced traders can experiment with other target and stop loss amounts at their own discretion.
2) Time Based Exit: For a long position: if by 2:55pm New York Time (remember to offset these times as per your own time zone, as outlined above) the trade has not yet hit the target or stop loss then sell the position on the first profitable close of a bar. In other words on or after 2:55pm New York Time if the position is still open then as soon as a bar closes and the trade is profitable then close the position.
So one of three things will happen: The trade will hit the target, the stop loss, or be closed on the first profitable bar on or AFTER the bar at 2:55pm New York Time.
The exact same is true for a short position except the exit time is on or after 10:55am New York Time, rather than 2:55pm.
EXITING THE TRADE method 2:
(Trades only 1 hour per day, with a higher percentage of profitable trades but overall profit potential can be less than exit method 1):
All of the above is the same except the exit times are as follows:
Long TimeBased
Exit: 10:55am (New York Time)
Short TimeBased
Exit: 10:40am (New York Time)
SemiAutomating the System:
Entering at the same time every day makes this method MUCH easier than nearly all other methods. To make this system more "automated" simply use limit orders for the profit targets and stop loss orders in your trading platform to automate the trades. Make sure to use "OCO" (Order Cancels Order) settings (if one order is executed the other one must be canceled automatically) If you don't know to do this then please consult your broker and/or check your trading platform help files.
If the target or stop loss is not hit before the timebased exit must be used then the trade will have to be exited manually. be sure to cancel any open and pending target limit or stop orders if the trade is exited manually.
NOTE: We recommend trading using a demo/simulated account before using real capital.
Download
How to download : Click here
0 comments:
Post a Comment