STS 2020 - a major update for our Simple Trading System

STS 2020 - a major update for our Simple Trading System

13 August 2020, 17:34
Daniel Stein
3
2 708

Long time no see, but now I'm back and like to provide some interesting results of my research work.

The initial publication of our Simple Trading System was years ago and now it's time for a major update.

Before I continue I have to say special thanks to some inspiring group members and friends.

Alin
- the Zen Master of FX Power who opened my eyes in how many ways my own tool can be used
Luigi - he reminded me to keep things simple and to adhere to the successful rules already established
Alain - the coding genius that made so many things possible I've just dreamed of so far

and many, many others that fill our trading chat group with ideas and knowledge

OUR TRADING PHILOSOPHY

The STS 2020 is based on the idea that every week there is just one currency that is in the focus of the market participants.
Our system identifies this currency and checks for the best possible counter currencies to trade the expected moves.

The significant benefit of this approach is that you get rid of all the unprofitable sideways moves, and the entry setups usually last for several hours and days.
All this makes it ideal for part-time traders all over the world because you do have more than enough time to do your research without staring at the charts all day long.

The most important analyzes before entering a trade are

1. The trend situation of the underlying symbol -> FX Trend FX Trend MT5

2.  The individual strength of the involved currencies -> FX Power / FX Power MT5

3. The support and resistance levels of the underlying symbol -> Lighthouse / Lighthouse MT5

4. The real market trading volume from the broker side of view -> FX Volume / FX Volume MT5

Optional is an automated trade management solution -> Powerplay Trade Manager / Trade Manager MT5


RULE NO 1: The trends have to be in line and their intensity has to be high!

sts_trends


FX Trend provides an option to filter it's alerts by the trend intensity. So if you like to get an alert if the above criterias are met you have to configure the alert options like this.

fxt_alerts


RULE NO 2: Identify a very strong or very weak currency!

For this specific currency strength analysis we use 3 instances of FX Power inside one subwindow.

I trade always on H1 and on this chart time frame I use 1 Day, 3 Days and 1 Week as FX Power analysis periods.

Please follow the video tutorial below to see how to configure 3 different FX Power instances in just one subwindow.



This multiple-instance setup provides a complete new insight into strength and weakness of individual currencies and it makes it a lot easier to  identify real strong and real weak currencies.


So what are the situations we are looking for?

We are looking for situations where ONE currency is 
up in the sky across all three FX Power instances

fxp_strong


or situations where one ONE currency is down at the bottom across all three FX Power instances

fxp_weak 


RULE NO 3: Identify the right currency pair to trade against your trigger currency!

To do so we have to look at the FX Power Delta line which indicates difference between two currency strength lines.

fxp_delta_buy2



RULE NO 4: Check the support and resistance levels!

Just run Lighthouse with it's default settings and check if the SR distance check advices you to "WAIT" or "GO"

lh_state


RULE NO 5: The volume lines must diverge!

fxv_lines_diverge


RULE NO 6: The volume is always right!

fxv_rules


RULE NO 7: Timing is important!

Monday, Tuesday and Wednesday are good for new trading opportunities

Thursday and Friday are good to monitor the market and prepare your exit

Why? No professional trader will enter any major positions right before the weekend when the markets are closed.
They usually prepare their trades at the beginning of the week, use the vola during the week and get out of the risk before the market closes.

This is our personal experience trading forex for several years now.


Here are some trade examples from this week where we strictly followed all 6 rules of the STS 2020 (click to enlarge)

NZDCHF


CADJPY


NZDCAD


AUDJPY


CHFJPY


EURJPY


And last but not least, one trade where I ignored rule No 6 "The volume is always right!" 

EURGBP


Summary: You have to wait if all indicators point into the same direction and then just follow the market.


If you like to become part of our great and successful trading community

Get your toolset at https://www.mql5.com/en/users/blueball/seller

and send proof of your purchase to https://t.me/SteinInvestments
to get your personal invitation to our amazing group chat

All the best and happy trading
Daniel


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