Trading System - OzFX System

This amazing system has been created by OzFX, and you can find the original system along with the daily trade signals here. This system is not only simple to use, but is also extremely profitable. As with other systems I use, I have used most of the original system, and modified with slightly to suit my needs.

The System:
This system involves trading off the daily chart or sometimes the 4 hour charts. And since we are looking at a larger time frame, it involves holding positions anywhere from few days to few weeks. And since this is a longer time frame trading system, we are targeting more than 100 pips in profit with each trade, and typically around 200-300 pips. Once again, in my testing the past few weeks, this system has done exceedingly well with high rate of success and good returns per trade.

The Indicators:

1. 200 SMA applied to close.
2. Accelerator Oscillator with default parameters.
3. Stochastic (5, 3, 3)
4. Awesome Oscillator with default parameters.
5. RSI (9)

The Signals:
Long Trade (conservative):

1. The AC is showing green and just crossing zero.
2. AO is also showing green.
3. Stochastic is heading up and crossed above 50 and not in overbought territory (this is still being tested).
   
4. RSI is heading up and close to or above 50.
   

Short Trade (conservative):

1. The AC is showing red and just crossing zero.
2. AO is also showing red.
3. Stochastic is heading down and crossed below 50 and not in oversold territory (this is still being tested).
   
4. RSI is heading down and close to or below 50.
   

Long Trade (aggressive):

1. Both AC & AO are starting to showing green.
   
2. Stochastic is heading up and not in overbought territory (this is still being tested).
   
3. RSI is heading up.
   

Short Trade (aggressive):

1. Both AC & AO are starting to showing red.
   
2. Stochastic is heading down and not in oversold territory (this is still being tested).
   
3. RSI is heading down.
   

The aggressive method allows us to catch the trend earlier and also exit the trade as soon as the trend is reversing.

Stop Losses & Exits:
Each trade is opened with 3-5 lots. Stop losses are usually set to 100 pips. Set target points every 50 pips and sell 1 lot every time a target point is hit. Let the last lot run until the trend reverses. As soon as the first target point is hit, move the stop loss to break even.

Trading System - Baby Pips Method

This is not the actual system mentioned in the Babypips website (www.babypips.com), but slightly modified from it. For the actual system, visit here. I use the same indicators used by the system, but I apply them on a different time frame. Retracing the charts, it seems like the system would work. But I am still testing it thru live trading.

The Indicators:
The indicators necessary for the system is as follows. All these indicators are applied to the 4 hour chart.

• 5 EMA applied to close.
• 10 EMA applied to close.
• Stochastics (10,3,3)
• RSI (9)
• MACD(12,26,9)

The Signals:
Long Trades:

1. The 5 EMA should cross above the 10 EMA.
   
2. RSI should be trending upward and preferably above 50.
3. Stochastic must be heading up and not in overbought territory.
4. MACD must go from negative to positive or BE negative and start to increase in value.

Short Trades:

1. The 5 EMA must cross below the 10 EMA.
2. RSI should be trending down and preferably below 50.
3. Stochastic must be headng down and not in over sold territory.
4. MACD must go from positive to negative, or BE positive and must decrease in value.

Stop Losses:
I generally try to have a 50-60 pips stop loss for the trade since I trade off the 4 hour chart.

Exits:
Exist when the target prices have been met, or when the signals reverse indicating the end of the trend.

Always remember to trade with the trend.

Trade Update - USD/CAD Long CLOSED

Update 03-03-08 1:30pm:
I was trading this with the FXCM account, so it did not allow me much flexibility with setting multiple TP's. Hence all 3 lots closed with a +50 pips (hit the stop loss which I had adjusted) gain and was just shy of the +75 pip TP I had set.

Lots 1-3 (closed 1:30pm): +150 pips (50 * 3)

Total Pips: +150
Total Profit: $151.36

Update 03-03-08 7:40am:
This trade is still showing a small +15 pip gain. None of the lots have yet closed, so we could still have a loss in this trade.

The Trade:
Entering this trade once again since the charts still show a buy signal (OzFX system). Only problem is that the price is below 200 SMA and not a valid signal. But once again, this would test to see how important that filter is.


Lots: 3
Entry (Long) - 0.9860
Stop Loss - 0.9800
TP - 0.99350

Trade Update - CAD/JPY Short CLOSED

Update 3-3-08 7am:
Good start to the month so far. After hitting the 50 pip 1st target price, the remaining 2 lots closed at break even. But we are not complaining. :) One thing to note might be that if the Stochastic is in over bought or over sold condition while entering the trade, the profit potential is probably lowered. This is just a theory from this trade alone, and we will need more data to prove it.

Here are the results.
Lot 1 (closed at 11:40pm): +50 pips
Lot 2 & 3 closed at break even (3:06am): 0 pips

Total Pips: +50
Total Profit: $48.66

Update 3-3-08 12am:
Our first target price has been hit and we closed one lot for +50 pips. Stop loss has been moved to break even. Remaining 2 lots are up +32 pips each.

The Trade:
This is the other signal for today's trade from the OxFX forums. As in the previous signal, I was reluctant to open this trade as this too had the Stochastic in the oversold condition. But nevertheless, I decided to go ahead with it.


Lots: 3
Entry (Short) - 104.77
Stop Loss - 105.77
TP1 - 104.27
TP2 - 103.77

Trade Update - EUR/CAD Long CLOSED

Update 03-03-08 11am:
The 3rd lot finally hit the stop loss, so this trade is complete.

Lot 1 (closed at 6:30am): +50 pips
Lot 2 (closed at 7:30am): +100 pips
Lot 3 (hit SL at 10:35am): 0 pips

Total Pips: +150
Total Profit: $151.79

Update 03-03-08 7:30am:
This is the better trade of the day and has already locked us +150 pips in profit. Stop loss has been moved to BE, and Lot 3 is still running.

The Trade:
This was one of the trade signal was from the OzFX forums for today. I was reluctant to enter this trade as well as the other one as the Stochastic were already in the overbought/oversold territory. But since they gave the signal, I decided to give it a try to see how important the Stoch is to the trade result.

Lots: 3
Entry (Long) - 1.49639
Stop Loss - 1.49036
TP1 - 1.50139
TP2 - 1.50639

Trade Update - CHF/JPY Short CLOSED

Update 03-03-08 7:55am:
We again made a small but decent profit on this trade.

Lot 1 (closed at 1am): +50 pips
Lot 2 & 3 (closed at BE at 7:50am): 0 pips

Total Pips: +50
Total Profit: $48.69

The Trade:
Now you may be surprised why I am entering this trade when I already have a position open. This is because This trade was also signalled on the OzFX system. Well no quiet as I am breaking one of the rules. The current price is above the 200 SMA which means I shoudnt be going short, but I just want to see how important that filter is.


Lots: 3
Entry (Short) - 99.56
SL1 (2 lots) - 100.06
SL2 (1 lot) - 100.56
TP1 - 99.06
TP2 - 98.56

Note: I am using the FX Solutions trading platform for this trade. hence I am able to place multiple stop losses to try out different money management techniques.

Trade Update - CHF/JPY Short CLOSED

Update 03-04-08 1pm:
After holding on to this position for a week now, and having seen the position fluctuate between -70 pips and +80 pips, I have decided to close this trade for a loss.. The main reason is that the signal has reversed according to the babypips system.

Trades closed at 99.53.
Total Pips:
Total Profit:

Update 02-29-08 7:30am:
The Swissy hasn't fallen against the Yen like the other majors have. At the peak, our gain in ths trade was probably close to 45pips, but currently it stands at a +5 pip gain. Not very valuable.

The Trade:
This trade is based on the babypips system on the 4 hour chart. Continuing the trend we have seen earlier, the Swissy has been lower against the yen. And since the indicators were starting to line up for this one, I decided to pull the trigger.


Lots - 2
Entry (Short) - 99.64
Stop Loss - 100.64
TP - 98.64