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Thread: 1:7 Trading Strategy

  1. #1
    Trader ara's Avatar
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    1:7 Trading Strategy

    I hope the admin will approve this trading journal thread. I want to use this thread as an observation and as a tester for a strategy, initially I will use a demo account, if there is some weakness, then I will try to improve this trading system until it becomes a strategy that generate good profits, though not big, at least it can generate a good profitable strategy, and if I get good results, then I will apply it in a real account.

    DESCRIPTION
    Idea
    I have an idea to create a trading system by relying on Risk:Reward Ratio. Why? Logically ... the forex market is up and down. There are only 2 possibilities. But it's not as easy as what we thinking about. Because in fact, getting consistent profit in forex is not easy, because there are other factors psychologically. However, if we think mathematically, then the chances of winning in each trade are 50%, yup ... of course, that is absolute by mathematical formula (without any influence of psychological factors). So, winning trade vs losing trade should be 50%:50% if we trade without analysis with 1:1 of SL:TP. Then I want to create a trading system by favoring the ratio of risk and reward. Here I use the name "1:7 Trading Strategy" because I will use the ratio 1:7 of Risk:Reward. This means I use a ratio of 1 SL: 7 TP. Why I do use 7? Why I don't use 1:2 or 1:3? The answer is : I love the number of "7". Hohohoho.

    Market Analysis
    What is the strategy of market analysis that I used for this trading system? The answer is "ANY", yup, whatever the analysis, it can be applied.
    Like what I said before, I do not take a fixed analysis strategy. I say that the chances of wining trade is 50% if we trade without analysis with 1:1 Risk to Reward ratio. I want to know how if I used 1:7 Risk to Reward ratio without analysis, but wait a minute...., oh oh no..., I think I must analyze the market for my trading in order to make the reward ratio is bigger then risk. Okay...okay... I will do analyze the market with whatever type of analysis.

    Money Management
    At first I will divide equity to 20 trades, so I have 20 trades chance. But I will use a demo account, and I will use the smallest lot size. So I would say that the strategy will fail if I get 20 losing trades in a row even though there is still equity remaining in my demo account. Because I do not want to create multiple demo accounts for this trading journal just because I get many stop out. For stop loss and take profit, I will initially set SL = 15 pips and TP = 105 pips (7 * 15 = 105).

    Conclusion
    Once again I speak, I created this thread to build a trading strategy by relying on Risk Reward Ratio. I do not rely on skills in market analysis. So I hope you understand, understand, and again....understand....., also giving a good contribution to my trading journals.
    Because : I am here on this trading journal is just for LEARNING, not for TEACHING. Thank you

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  2. #21
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    Quote Originally Posted by ola4real View Post
    Ara, you must be a professional trader of high value, that is how it will be possible for you to have a risk to reward ratio of 1:7, that is a big one, and by that you would have suppressed all the power of the market to a standstill level. I am not particular with your strategy because i have mine, but i will try and work on higher risk to reward ratio like you.
    I am such a trader that really love the use of good risk to reward ratio, and i have even opened a thread about it recently, so that traders can know the beauty in it. I have always being working with risk to reward ratio of 1:3-5, i have never traded with 1:7, i can only imagine how huge the profits of this trader would be at the end of the day, this is a very good one.

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  3. #22
    Trader ara's Avatar
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    Quote Originally Posted by kebikemor View Post
    However you should consider proper analysis which will add more value to your trading skills,
    That is my main problem with this trading system, it hard to enter the market in the right time with SL 15 pips and TP 105 pips. Hohoho


    Quote Originally Posted by kebikemor View Post
    Practice makes all things perfect, it is necessary to practice and learn in the demo account,
    That's why I have to practice in demo account first to test this strategy.


    Quote Originally Posted by coolless View Post
    as a newbie traders we need more knowledge of forex trade.
    I am also newbie,,, need more knowledge


    Quote Originally Posted by juniorpeters View Post
    i only target 1:4 and am okay with that so i don't get to lose the profit and my own money,i hate winning trades turning to losses.
    That's nice idea bro..., I am also hate winning trades turning to losses, and i'm having a few times those kind of situation, 1: 7 seems hard for me. But I still have to test it until some future time, before evaluating further.


    Quote Originally Posted by ola4real View Post
    I am not particular with your strategy because i have mine, but i will try and work on higher risk to reward ratio like you.
    Just use your own strategy, I still test this strategy..., for a while I'm still not sure about the results that would I get from using it.

    Weekly report
    I have only two trades on last week, and both trades are loss.., not good..., I still stick to the original rule of this strategy, if I lose my deposit in 20 consecutive trading times, then I will do some evaluation and change some of the initial rules that I apply to this strategy.
    2018-05-05_104222.jpg

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  4. #23
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    This strategy is seems to be good because first you are use the demo trading account for practice and check your trading ways but I do not understand that why you make the 1:7 risk and reward ratio. You are select it because you are like it but this thing is never help you to make profit on forex. Its profit target is so much high which is create difficulties for your to make profit on your trading.

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  5. #24
    Trader Toyen's Avatar
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    Quote Originally Posted by putih View Post
    This strategy is seems to be good because first you are use the demo trading account for practice and check your trading ways but I do not understand that why you make the 1:7 risk and reward ratio. You are select it because you are like it but this thing is never help you to make profit on forex. Its profit target is so much high which is create difficulties for your to make profit on your trading.
    I have checked the strategy, it is a good strategy with a careful plan, i always like this strategies that will make you to be earning big right from the month you start to use it. I like the risk to reward ratio too and 1:7 is a far high reward that will make traders to get to their breakeven point of success faster than many others.

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  6. #25
    Trader ola4real's Avatar
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    Quote Originally Posted by Toyen View Post
    I have checked the strategy, it is a good strategy with a careful plan, i always like this strategies that will make you to be earning big right from the month you start to use it. I like the risk to reward ratio too and 1:7 is a far high reward that will make traders to get to their breakeven point of success faster than many others.
    I like this strategy personally, it is good and it has the well planned risk management. We can not trade with success when we don't have the good plan on the risk management, that is more important than trading with our strategy alone. And when the strategy is good too, we will just be making more money as we trade forex.

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  7. #26
    Trader ara's Avatar
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    Quote Originally Posted by putih View Post
    I do not understand that why you make the 1:7 risk and reward ratio. You are select it because you are like it but this thing is never help you to make profit on forex. Its profit target is so much high which is create difficulties for your to make profit on your trading.
    Thanks for your advice my mate..., yep I agree with that, I feel difficult to making profit with high level of TP and low level of SL, but I should finished my first plan for this back test, if I am failed to manage my first deposit (demo account) with using my first plan, then I will evaluate and creating my second plan with some modification from my previous plan.

    Weekly Report
    I do not have many trades on this account because I have little constraint in managing my real account with other strategies. But I was able to open two trades on last week, and the result is not good. Both end up with loss.
    2018-05-12_081041.jpg

    So far I have 9 loss trades, and only 1 win trade. (8 loss streak).
    2018-05-12_081103.jpg

    According to my first plan, I have to modified my trading plan if I get 20 streak loss trades from my initial balance, now I have a losing streak in 2 trades from the initial balance. So according to my plan, I will modify my first trading rule if I then get 18 loss in a row in the next trade. But if I get profit even if only 1 trade, then rule in first plan still remain valid.

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  8. #27
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    Quote Originally Posted by ara View Post
    Thanks for your advice my mate..., yep I agree with that, I feel difficult to making profit with high level of TP and low level of SL, but I should finished my first plan for this back test, if I am failed to manage my first deposit (demo account) with using my first plan, then I will evaluate and creating my second plan with some modification from my previous plan.

    Weekly Report
    I do not have many trades on this account because I have little constraint in managing my real account with other strategies. But I was able to open two trades on last week, and the result is not good. Both end up with loss.

    So far I have 9 loss trades, and only 1 win trade. (8 loss streak).

    According to my first plan, I have to modified my trading plan if I get 20 streak loss trades from my initial balance, now I have a losing streak in 2 trades from the initial balance. So according to my plan, I will modify my first trading rule if I then get 18 loss in a row in the next trade. But if I get profit even if only 1 trade, then rule in first plan still remain valid.
    My friend, I must tell you that I salute your courage here, you had 8 losses, and you are bold to post it here, many traders on this forum cannot do that, they may even abandon the thread because of that. Well, I will like to advice you as well, the trading strategy that makes trader to win just 1 trade in a whole 9 is not a good one, you should try to change it totally if you knew that the fault was not from you.

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  9. #28
    Trader ara's Avatar
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    Quote Originally Posted by ajagbeolegba View Post
    My friend, I must tell you that I salute your courage here, you had 8 losses, and you are bold to post it here, many traders on this forum cannot do that, they may even abandon the thread because of that. Well, I will like to advice you as well, the trading strategy that makes trader to win just 1 trade in a whole 9 is not a good one, you should try to change it totally if you knew that the fault was not from you.
    Thanks mate..., I wan't learned from my mistakes. learned from my own experienced, that was my goal in making this thread. So, I should to I have to make important notes in each of my personal transactions, especially every failure in my trade. I am glad that you give me some advice, thank you for your advice, I will try to change it totally when I get 20 loss trades hahaha

    Back to journal
    Enter to the market take buy position on Aud/Nzd, I see there are strong bullish on this pair.
    2018-05-14_121135.jpg

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    Last edited by ara; 05-14-2018 at 08:17 AM. Reason: correcting single word

  10. #29
    Trader techboy's Avatar
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    It is mathematically possible to achieve huge risk reward ratio such as 1:7 but the problem here is that do the trader has the capacity to do it, because as far as I know most traders are doing the opposite instead, it will really requires a lot of discipline in order to achieve this goal, this target will not be easily achieve in the lower time frames because market are so choppy this days, maybe if you use this approach in the higher time frames especially daily, then you might have better chance of success.

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    " Trading is 70% Psychology, 15% Risk Management and 15% Strategy ! "

  11. #30
    Trader ola4real's Avatar
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    That is a very bad trading results, when traders can lose 8 out of the 9 trades they traded, that is not what we will be proud of. I believe that the trader have to go back to learning, he has not known anything about the forex field yet, his trading results is a prove of that. When the result is 4 against 5 or 5 against 4, we can still be hoping to have a better reward next time, but this one is too high of the defeat.

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