Free Forex Midnight Setup Strategy User s Guide Reviewed and recommended by Rita Lasker www.ritalasker.com
Read this There are lots of different strategies on the market. We test most of them and want to share a good and simple strategy we faced Forex Midnight Setup Strategy. Please read the information about it below. Wishing you safe and profitable trading. Yours, Rita Lasker Description What Is a Trading Strategy? Most frequently, a trading strategy is a set of entry and exit rules, which a trader can use to open and close positions in the foreign exchange market. These rules can be very simple or very complex. Simple strategies usually require only few confirmations, while advanced strategies may require multiple confirmations and signals from different sources. Additionally, a trading strategy may contain some money management rules or guidelines. Some strategies (e.g. Martingale) can be centered strictly around position sizing techniques. Apart from the entry/exit rules and optional money management guidelines, strategies are often characterized by the list of trading tools required to employ the given strategy. These tools are usually charts, technical or fundamental indicators, some market data or anything else that can be used in trading. When choosing a strategy, you need to understand, which of the required tools you have in possession. It is important to choose a strategy or system that is easy to follow with your daily trading schedule and that can be applied successfully with your account balance size. Mechanical vs. Discretionary Forex strategies that are traded based on strict mathematical rules with no ambiguous conditions and no important trading decisions to be made by the trader are called mechanical. A good example of a mechanical system is a moving average cross strategy, where MA periods are given and positions are entered and exited exactly at the point of cross. When working with mechanical trading strategy, it is easy to backtest one and determine its profitability. You can also automate such system via MetaTrader expert advisors or any other trading software. The usual drawback of such strategies is their lack of flexibility before the fundamental changes in the market behavior. Mechanical strategies are a good choice for traders knowledgeable in trading automation and backtesting. Strategies that retain some uncertainty and cannot be easily formalized into mathematical rules are called discretionary. Such strategies can be backtested only manually. They are also prone to emotional errors and various psychological biases. On the bright side, discretionary trading is very flexible and allows experienced
traders to avoid losses in difficult market situation, while offering an opportunity to extend profit when traders deem it feasible. Newbie currency traders should probably stay away from discretionary trading, or at least try to minimize the extent of their discretion in trading. What is Midnight Setup strategy about Ready to dedicate your midnight hour to Forex trading? This strategy can be your winner. Trading strategy setup: Currency pair: GBP/USD or any other. Time frame: 1 day. Indicators: None. Trading rules This system is based on the fact that most of the time you won't find same size candles for 2 consecutive days on a daily chart. What does this mean for us only one thing: the price is moving steady either up or down with almost no price "noise" which is always present on smaller time frames. Entry: At 00:00 (your local time) or rather: according to the time set on your trading platform, with newly formed daily candle find highest and lowest price of the day for the previous daily bar. If the price bar (including shadows) is less than 90 pips long we will not open new
trades the next day. (This is our requirement for GBP/USD pair, it can be changed/adjusted for other currency pairs). If the previous day bar turns out to be an Inside bar, be cautious about entries the following day. While an Inside bar candle implies a good breakout opportunity the following day, it can also be a dual whipsaw breakout - a break in both directions - the most unwanted scenario for our trading system. If we've chosen to trade the next day, set a Buy Stop order at the top of the previous day candle the highest price +5 pips, and Sell stop order at the bottom -5 pips. Put your stop loss order for a Long entry at the lowest price of the previous day -3 pips. Put your stop for the Short order at the top of the highest price of the previous day +3 pips. These additional pips for entries and stops can also be adjusted once you learn the behavior of a chosen currency pair over the time. Exit: Now, when one of the orders is filled stay in the trade for the whole day. At midnight with the new daily candle open, adjust your orders and stops according with the previous daily candle following the same routine; keep trading position open until you get +100 pips, then you may close current position to reward yourself. Rewarding is a very powerful tool, use it. An alternative money management approach would suggest to enter with two trading positions, where the first one will be closed once we are +100 pips in profit, while the second one will be left to run till we get stopped out, thus allowing us to collect everything the market is willing to offer. Close your current open positions (with either profit or loss) if a daily candle becomes a Doji candle or is almost a Doji. What we mean by "almost" is that for the true Doji you need open price = close price, while "almost Doji" can have some distance between open and close (but no more than 10 pips). Also close your open trades if you've met a Shooting Star candlestick in an uptrend or a Hammer candlestick in a downtrend. Below is an example (no screen shot) to illustrate how we navigate in time: On May 1st at 00:05am, we opened a daily chart and it was a downtrend.
We set our orders (both Buy and Sell) according to the previous candle (April 30th). The same day our Sell order gets filled. The day has passed and the price made some further progress down. At 00:05am, May 2nd with a new daily candle appearing we change our stop loss for a current Short position according to the high of the previous bar (from May 1st), from that point we can either continue to stay in the trade or lock in profits. Also we reset our Buy order which is now going to be just above the highest high of the May 2nd candle. This system also gives an opportunity to be constantly in a trade and at the same time it requires very little observation and takes only 5 minutes a day to set all positions and forget about Forex till the next midnight. You will see losing trades with this system from time to time it is a part of any trading, but the overall result will be very positive. Let s look at the screen shot now and examine our trading in greater details: Next is a detailed candle-by-candle explanation of the trading on the chart above. We will number candles starting form 1, so number 1 is a circled candle. 1st candle (high low = over 90 pips) which allows entries the next day. We set entry orders. 2nd candle the price didn't get above or below the 1st candle, no orders filled. Midnight: the 2nd candle is over 90 pips long, we're going to reset orders according to the 2nd candle s high and low. The second candle is also an Inside bar, so if we decide to trade, we should keep in mind that our risks at this stage will be higher.
3rd our buy order is filled. Midnight: day ended negatively, but didn't trigger the stop loss, we keep our position open and adjust stop loss below the low of the 3rd candle and minus additional 3 pips. The 3rd candle is also less that 90 pips long and we wouldn t trade the next day except that for now we have already one position running. 4th went in profit and we rewarded ourselves closing position at the end of the day with just over 100 pips (you can actually set your target lower than that, or use 2 entry orders as suggested above). Choosing a profit target for the day becomes easier when you know a daily range average for a particular currency pair. For example, GBP/USD daily range average is 180-200 pips EUR/USD daily range average is 110-120 pips USD/JPY daily range average is 80-90 pips USD/CHF daily range average is 120-130 pips Taking about a half of it can determine your daily profit targets. 5th no trading as the price didn t exceed previous candle boundaries. Midnight: candle #5 is less than 90 pips + it is an Inside bar, thus we are not setting any orders for the next day. 6th we didn t trade it and for a good reason price managed to get below and above the previous candle s high and low, which would have hit our stops, in worst case - twice. By the end of the day we reevaluate the charts and it is a good time to set new trades. 7th - entered Long, our stop loss was below the low of candle #6, this trade is a reward again more than 150 pips, so we lock it in. At midnight we set new orders again. We will have systems that will be able to easily allow trades running their positions further relatively safe, but for this one it is important to lock your profits at least partially the reason is that we move our stop order every day. 8th no trading opportunities. Midnight: candle #8 is less than 90 pips + an Inside bar (IB) again, means we are not going to trade the next day. 9th - no trading and we were very right about it. Midnight: #9 candle is long enough for us to set targets for the next day. 10th no orders triggered. Midnight: #10 candle is long enough, but is again an Inside bar, it is risky to trade, looking at previous days traders are now obviously indecisive about the trend. Decide per your own risk appetite. 11th no trading, but if we did, the day would have ended with a small profit. 12th no orders triggered. An IB again. 13th no trading. At midnight set new pending orders. 14th - Bought, but closed negative for the day, although the candle was bullish. We stay in a trade. 15th we are almost at break even, but nothing to earn, we stay in a trade, stop loss below the latest daily candle. 16th we got stopped out (not a problem, you shouldn't be worried about such negative days), a short position is filled soon after on the same day. One day later it'll become profitable and so on... Based on the information from http://forex-strategies-revealed.com/
Good luck with your trading! If you have any questions, please feel free to ask our support team by sending an E- mail to: ritalasker@gmail.com We will do our best to help you. Yours, Rita Lasker & Green Forex Group Any additional information: http://www.ritalasker.com Contact Information: http://www.ritalasker.com/contacts.htm Follow us on: Youtube: http://www.youtube.com/channel/ucdu1rtahpionchssd6d5rjw Facebook: https://www.facebook.com/rita.lasker.9
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