Topic: How to build this strategy?

Hello everybody.
I am a total newbie, both for Forex trading and for this forum.
It all sounds really exciting and promising! But I have a lot to learn....
Maybe someone can help me in finding a way to develop the following strategy:

If the day before the trade the range is higher than 140 pips, I would like to enter the day after, if and only if the price is 140 pips or more higher than the day's low (long condition) or 140 pips or more lower than the day's high (short condition). Then, I would like to exit the next day (i.e. the day after the enter), at the end of the day, unless a 60 pips loss comes out.

I have tried to implement this in the following way:

I know for sure that something is already wrong, for example in the Opening Logic Condition the Bar Range indicator should always rise, but in the strategy I don't have this as a costraint (is there any more suitable indicator, or combination to do that?).

Thanks in advance for your expert help!

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Re: How to build this strategy?

Hi and welcome to the forum,

This is what I've come up with:
A same direction signal - Does nothing
An opposite direction signal - Does nothing
Permanent Stop Loss - 60
Permanent Take Profit - None

[Opening Point of the Position]
Previous High Low
     Enter long at the previous low
     Base price  -  High and Low
     Vertical shift  -  140

[Opening Logic Condition]
Average True Range
     [ A ]   The ATR is higher than the Level line
     Smoothing method  -  Simple
     Base price  -  Bar range
     Smoothing period  -  1
     Level [pips]  -  140
     Use previous bar value  -  Yes

The closing is a bit tricky (Day Closing at the next day), so I suggest try different things -  which works best.

Don't forget these settings apply to a daily chart!

Hope this points you to the right direction.

Re: How to build this strategy?

Hi footon
thanks a lot for your prompt reply!
I had a few trials following your suggestion, and this gave place to a lot of new questions!
I hope you won't mind.....

First of all, when I use Previous High Low as an Opening Point, and select  "Enter long at the previous low", if I click on the information icon, I get the following message: "Open a long position 140 pips below the previous low"

It seems to me that this is the opposite I would like to do in my strategy, I would like to enter if the price is 140 pips or more higher than the day's low. Am I wrong? I am confused.

On the other hand, if I use Price Move as an Opening Point, and select  "Enter long after an upward move", I think I get the right direction ("Open a long position 140 pips above the previous bar low price"), but what is wrong is that the previous bar is used and not the current one.
Is there any way to work with the price shift referring to the current day/bar low?!?

One more question (there are a lot more, but for the time being I gess this is enough): in the Market Data I get a lot of "close" transactions, but i cannot see any "open" one. What does this mean?

Thank you for your patience!

Re: How to build this strategy?

I'm deeply sorry, I forgot one important thing - it is - (minus) 140 shift.

About previous bar value (PBV): it is correct to use PBV if base price is set to anything except Open, because how do you know the low of the current bar? If and only if the current bar is finished, you know the low of that bar!

Your last question - can you please elaborate on that please, I'm not sure I understand you correctly, a screenshot wouldn't be bad (picture says more than 1000 words, right big_smile ).

Re: How to build this strategy?

hi footon

all right, it works with -140!

as to the Previous Bar Value, now I got it!

I am trying to implement my strategy, but there is still something I don't understand. For example, look at the following screenshot:

The 13-14/01/2011 records are a good example of what I mean an entry signal for my strategy: on the 12th, a more than 140 pips range had shown. On the 13th, the position is correctly opened and on the 14th it is correctly closed. What I don't understand is the entry price and then the profit: is the entry price the one shown in the "Price" column of the Bar Summary, i.e. 1.5723?  In this case, this wouldn't be what I meant, because the entry price should be 140 pips above the 13th low, that is 1.5858. Of course the profit is also different.

Another thing I cannot understand is the amount of "close" transactions that come out in the list, maybe this has something to do with the N Bars Exit Closing Logic Condition. In fact, from th "info" button I get the message "Close a long position when Not defined" that is not exactly what I would expect the N Bars Exit to do....
Is there any other way to exit the day after the trade enter?

I hope you can help, I am struggling to fill my lack of education!

thank you

Re: How to build this strategy?


I'm not sure where comes that 5723, it should show the opening price and the closing one too respectively. For instance, readings for 27.01 are correct...

Market data window is confusing if you ask me, I prefer using Journal by Positions (click the arrow which points to left and right in the Orders During the Bar window, in case you don't know).

I suggest you track that trade on the main chart, then it should be obvious if it goes wrong or not.

About close transactions - as they are all -300, it should be the permanent TP of 60 kicking in. The openings of positions, which are stopped by SL, are not shown in the market data window, but in position journal they are all nicely there, hence the confusion.

So, I hope Journal by Positions will turn things around for you, if it doesn't, I'm not very optimistic about finding a better next day closing.

Good luck!

Re: How to build this strategy?

OK, thanks! I'll try to take advantage of your hints.  smile