InvestorTool
- Indicators
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TJIONG KIM SHIUNG Tjiong
Systematic Independent Trader | Capital Preservation & Risk Management Specialist - Version: 2.0
- Updated: 8 February 2024
- Activations: 10
This indicator is very useful for those who trade with investor techniques. That's why I named it InvestorTool. Why investors? Isn't this a tool for trading?
This indicator is basically to help investors to identify which pairs are very close to their All-Time-Low or All-Time-High.
So that the investor will quickly spot which instruments are "relatively" at its low cost, and telling the minimum equity required.
If the pair is close to All-Time-Low then investor can put a buy position.
When the pair is close to All-Time-High then it is suggested to put a sell position.
The trading technique to be used is suggested as simple as that.
How about the SL? SL is suggested to be put below All-Time-Low when opening buy position, or SL is to be put above All-Time-High when opening sell position.
Then, how far is the TP? We cannot apply normal Risk:Reward Ratio, such as 1:1, 1:2, 1:3, 1:4, or 1:5. The Risk:Reward ratio would be such as 1:0.1, or 1:0.2, or 1:0.3, etc.
Or we consider to get a 10%, 20%, 30% profit from the asset we invest. Consider that we are already put a very low risk, by setting the SL beyond the All-Time-Low and All-Time-High price.
Therefore the suggested TP should consider the Average Daily Range. If the ADR is 120, while the today's range is still 20, then we can expect the pair will move another 100 pips at the same day.
However, the movement can be either up or down. So, let's say it can be 100/2=50 pips up, and possible 50 pips down. It means you can put 50 pips for your TP, which normally this 50 pips can be your 10% of the Risk (depends how close it is to the All-Time-Low or All-Time-High).
This technique is dedicated for traders with Investing type style, looking for low risk, anticipating slow growth, but still gaining the discount price in derivative market.
However, you should consider that currency pair tends to get into its equilibrium. Because no country expects its currency too strong nor too weak.
So, Currency pair is not the same investing instrument just as Gold or Stock Index. So, when using this tool, you need to consider the difference of the natures among the instrument pairs.
At the moment, this initial release of this tool, it only covers currency pairs, with additional XAUUSD and XAGUSD. In the future, I might add indexes, and other commodities available in your respective brokers.
You can follow me to get the latest information on this tool.
