The method uses candlestick pattern and the relationship between the highs and lows of the price bar to determine entry points.
Entry Rules
1. Price made 3 or more consecutive lower highs
2. Price made 3 or more consecutive lower lows
3. Price made 3 or more consecutive black candle (closing price is less than opening price)
4. When conditions (1) to (3) are met, enter a long position at the high of the previous bar.
Example of such a price pattern is shown below:
Exit Rules
1. Exit after holding the trade for 3 days.
Lets do a case study using Bio-treat.
Based on data from 2004 to 9 May 2008, the trading record is as follows:
| Entry Date | Entry Price | Exit Date | Exit Price | % Change | Draw Down % | Max Gain % | Bars Held |
|---|---|---|---|---|---|---|---|
| 5/19/2004 | 0.82 | 5/24/2004 | 0.83 | 1.22 | -1.8293 | 1.8293 | 3 |
| 6/24/2004 | 0.87 | 6/29/2004 | 0.9 | 3.45 | 0 | 4.023 | 3 |
| 12/14/2004 | 0.65 | 12/17/2004 | 0.625 | -3.85 | -4.6154 | 2.3077 | 3 |
| 12/23/2005 | 1 | 12/29/2005 | 1.05 | 5 | 0 | 5 | 3 |
| 6/9/2006 | 1.06 | 6/14/2006 | 1.04 | -1.89 | -1.8868 | 1.8868 | 3 |
| 10/23/2007 | 0.75 | 10/26/2007 | 0.785 | 4.67 | 0 | 5.3333 | 3 |
| 1/23/2008 | 0.625 | 1/28/2008 | 0.65 | 4 | -4 | 6.4 | 3 |
There were a total of 7 trades with 5 winners and 2 losers.
3 comments:
Hello, I am wondering if you do trade any of these system yourself? If not, what system do you trade with? Thanks..
Hi dream,
I do trade some of the system but not all of them. I combine some of the indicators together to increase the probability of winning and also to prevent overtrading.
Hello,
This is a good, knowledgeable blog. Can I link your blog up in mine? Cheers!
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