1:7 Trading Strategy
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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. #2
    Trader ara's Avatar
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    Well, I've made a demo account with the initial deposit is 10,000 ..., wow .. a very big amount ..., I can't imagine if it is my real account ...
    As I have said above, I deliberately created a demo account with a large initial deposit and will use the smallest lot per trades, I will take only 20 trades in this account, meaning I will use 20 * 0.01 lot size = 0.2 lot size total, and I will take risk 15 pips per trades, so if I lose 15 * 0.2 lotsize = $30 of total initial balance then I assume I have failed, so I have to evaluate and improve this trading system, and then continue with the new trading system but still based on risk reward ratio as the basis of this strategy. I will doubled the lot size per $30 of profit that I gained. So if I can gained $30 from the initial balance then I will raise the lot size into 0.02 per trade, and 0.03 lot size per trade for the next $30 that I gained, and so on, and so on....
    2018-04-22_205533.png

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  3. #3
    Trader ara's Avatar
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    My first trade for this strategy, My first trade on USD/JPY
    Analysis : I see there are deviation from the candlestick chart and force index indicator, so I decided to put short position on this pair at 107.759 with Stop Loss point set up at 107.909 (15 pips above) and Take Profit point set up at 106.709 (105 point below). Lets I see what happen to my first order.
    I have to complete this order till closed, so I wan't to open a new order if the opened position still uncompleted yet. I just want to have only one position at a time.
    2018-04-23_091422.jpg

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  4. #4
    Trader ara's Avatar
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    My first trade is failed, the price touching my stop loss point, I get loss trade on my first chance. Well, that's not a good analysis for me.
    This is my second trade for this strategy, seems not bad, the price is near to my take profit point, but don't know if the price will hit my TP or will reverse to bearish, hohoho... Let I see what will happen on my second order. I will waiting this order till complete before I put my third order for this trading system.
    2018-04-24_081508.jpg
    My second trade is on USD/JPY, analysis by time frame H4.

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  5. #5
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    Trading without proper analysis of the market is not good if we want to make money in this market we need to analyze the market very well before trading so that our chances of winning will be much more than our chances of losing, you have a very good strategy here that could help you make money with discipline I believe this strategy will work, you should note give up on this strategy because the first trade with it fail.

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  6. #6
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    you are right that each trade has the same percentage of winning and loss and so we could not be able to make consistent profits unless we have a good tools that let us to increase the winning and decrease the loses as we can as possible, if we can control our psychology then we can increase our profits and satisfy with good results.

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    Honestly it is good to develop the ability and see you in this section, thanks for your thread, in any written words there is an experience or word to pick from it. It is true that there are only two possibilities in forex market of which I see to be either you loss or win, that is the mentality a lot of newbie traders like me use in this market, newbie trader don't have a good knowledge and experience but also wants to take big risk that they feel will give them the huge profit in their trade, trading with the mindset of two things will happen in forex market either loss or win is not that good enough, because you will not bother much about analyzing your trade properly well before trading.

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  8. #8
    Trader ara's Avatar
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    Quote Originally Posted by Eneregha View Post
    Trading without proper analysis of the market is not good if we want to make money in this market we need to analyze the market very well before trading so that our chances of winning will be much more than our chances of losing
    Yup I think so, that's why I think I should do market analysis for each trade on this trading system, at first I don't think so, I just think I will trade based on 1:7 risk reward ratio without market analysis just for tester, but then I change my plan.
    Quote Originally Posted by sameeh View Post
    you are right that each trade has the same percentage of winning and loss and so we could not be able to make consistent profits unless we have a good tools that let us to increase the winning and decrease the loses as we can as possible,
    Strongly agree with you my bro...
    Quote Originally Posted by coolless View Post
    Honestly it is good to develop the ability and see you in this section, thanks for your thread, in any written words there is an experience or word to pick from it.
    Okay, hank you for your attention to this thread.

    Okay, I've done with two trades, first trade is loss, and the second trade is win...
    2018-04-25_171141.jpg

    And this is my current trade, my third trade....
    2018-04-25_171123.jpg

    Almost difficult to trade with 1:7 risk to reward ratio, because I have to analyze the market to find trend in order to gain around 100 pips profit but with very small stop loss point, I should waiting the best moment for enter the market.

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  9. #9
    Trader ara's Avatar
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    My third trades is unsuccessful, I get loss in my third trade. I just put one another trade as my fourth trade, this time I enter the aud/nzd market, I don't use any theory for analysis, I only put buy order because I see the price is in strong bullish momentum and the price is difficult to goes down although only few pips. Okey, lets I see what will happen with my fourth order.

    2018-04-26_135715.jpg

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  10. #10
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    Quote Originally Posted by ara View Post
    Yup I think so, that's why I think I should do market analysis for each trade on this trading system, at first I don't think so, I just think I will trade based on 1:7 risk reward ratio without market analysis just for tester, but then I change my plan.

    Strongly agree with you my bro...

    Okay, hank you for your attention to this thread.

    Okay, I've done with two trades, first trade is loss, and the second trade is win...
    2018-04-25_171141.jpg

    And this is my current trade, my third trade....
    2018-04-25_171123.jpg

    Almost difficult to trade with 1:7 risk to reward ratio, because I have to analyze the market to find trend in order to gain around 100 pips profit but with very small stop loss point, I should waiting the best moment for enter the market.
    Congrats for your successful trade, i believe you have recovered your loss trade, that is forex trade for us it us not that easy or simple to analyze properly to get the results that we need in our trade, although that is the more reason money management is good that is should not be lack at anytime we trade, honestly it is not easy but with the rightful knowledge and experience we can defeat any obstacles in our trading process.

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