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Great stuff, cableman ;)
Still long, with the odd bit of shaving and re-entries :)

You guys might like to look at the Sterling Yen cross. Not necessarily for intraday action, but instead for momentum trading. Once it moves into a trend it frequently stays there for days or weeks.



You could use a moving average strategy or an overbought/sold strategy or a pivot strategy (similar to below) and they should keep you in the trade for some time without knocking you out.

Thanks for this Hilary - just the sort of thing I'm looking for. Do you set your own spreadsheet up for pivots?

That's brill, Hils!

cheers hil ill take a look. mng choco

Seymour,

Yes, that's my own spreadsheet.

If you take that downleg from just before Xmas to mid-January as an example and assume that you're a muppet trader who consistently buys at the intraday high and sells at the intraday low, you would have gone short on 22nd Dec at 198.68 and been stopped on 18th Jan when it hit 192.12 for a minimum profit of 656 pips. Not bad for 3 weeks work!

Now let's also assume that you were trading a contract with an initial margin requirement of 200 and that every time the position moved 100 pips in your favour you used the open profit from the position to increase the position by 50%. So for instance, if you opened a position at 10/pip (using 2,000 margin) you would add 5/pip when it hit 197.68 and then a further 7.50/pip at 196.68 and so on. By the time you were stopped, your tally would read like this:

656 pips at 10
556 pips at 5
456 pips at 7
356 pips at 11
256 pips at 16
156 pips at 24
56 pips at 36

which would make a grand total of 26,304. In actual fact there would be some losses to include as well, as you would have added to the position at 191.68 and below and these would have resulted in a loss on those trades. I did assume at the outset, however, that you'd entered the market at the worst possible time and a little bit of poetic license is obviously needed. Even so, it should have been easy to net over 20k from a 2k trade in around 3 weeks. That makes it a quick 10-bagger and if you then repeated the process on the ensuing upleg it would be easypeasy to make astronomical sums in a few short weeks.

intresting hils...
i do a bit of stg kiwi..but iwill take a look @stg/yen

Very nice Hilary - will do some homework as this looks like a nice way to trade and not too volatile. Edit - hope you're making these astronomical sums!!!

Hilary, Just me being slow I suspect, but given that FX is 24 hrs, where do you take your figures from?

5pm New York time, Seymour, is universally accepted as the standard.

Btw, I highlighted GBP/JPY in that example because it's had some recent moves which illustrated the technique well and because at some stage soon it should turn and embark upon a downleg.

The technique works on other pairs as well. Your post a couple of weeks back providing a link to a trader who offered courses prompted me to make the post. I watched his spiel and at the end of it he highlighted a 2600 pip move in Cable which ended last March with perfect ma crosses at the bottom and top of the move.

Edit: You don't need to restrict the technique to FX either. If you take a trending stock with a 10% margin requirement, enter towards the bottom of the channel and add 50% every time the position clears 5% profit. You do need to manage your money well though to avoid the margin calls if/when positions move against you.

Thanks Hilary. It certainly looks as if GPB/JPY will turn soon. Will watch hawklike!!

Thanks Hilary. Excellent posts . Will reveiw my FX strategies, (Again)

Hilary - the strategy you've outlined obviously works when there's a nice trend.

But how does such a strategy cope with periods such as Apr-Aug last year when the market was extremely choppy?

Piptrader,

Yes, it still worked - just not always as well. You still saw moves of between 300 and 500 pips over the course of a week or two.

The most important part of the strategy though is knowing which side of the market to be and why and where to have the stop and why. The most disconcerting aspect is having a stop which is too wide for most peoples nerves and especially in watching a 100 pip gain one day ebb away the following day.

Closed the lot at 19319
Blimey, that was some ride :)

Hmm...no plans for a longer term cable short yet

Does anyone know where to download eod FX prices (free!), both current and historical, so I can backtest some theories? Still intrigued by Hilary's suggested strategy. Quite happy to have a 100pt stop if it gets the result in the end.

Thanks Hilary. There don't seem to be many systems which can cope well with both types of market, so this is definitely worth looking at.

Interesting stuff on the /Yen cross. Any theories on ebbs and flows at different times of the year. I only ever traded this cross once, I was told at the end of July last year that this cross always goes down in August (I would need to review the exact reasons) which you can see it certainly did but I decided to get in early just before going on a long weekend, it was less than half a handful of points fortunately but with a very wide stop, well I was running a small profit on departure and only a tiny loss on return and the entry point still looked reasonable but then along came a blue candle of over 200 ticks and then a big upward intraday spike on a down day where I can still see my stop hit virtually at the top of the range. Of course it then dropped close on 1,000 ticks in a week and a half. Muppet trader probably but I would love to know any theories on catching close to turning points and also the relevance of different times of the year. I would need to check exactly why but I think into the end of March has significant relevance over there.

hodgins havnt really looked into stgyen but i think jap tax year ends march.. and they see repatriation of funds..