Trading System Example

Trading System Example

The Russian Academy expert Yuri Lozgovtsev has developed a trading system, to work with which indicators are not needed, but only exchange and level charts are needed.

Here is some additional information on this methodology of trading:

  • The system worked well in 2006 and 2008. This is no guarantee of its effectiveness in the future, but allows us to assume that it will continue to work. Forex Digital takes responsibility for the results of your work with this system – the responsibility is yours and keep this in mind. The rules of the system are given for didactic purposes.
  • The system presupposes strict rules for opening and closing the position. Any corrections to the rules change the system and can increase or decrease its effectiveness.
  • The system assumes that you work with the GBP/USD currency pair (pound sterling against the US dollar)
  • Position opening signals are checked at least once an hour.
  • The system contains 3 very important rules of rejection and breaking the levels.
  • Positions are opened if the price is repelled (repulsed) from the level or if it pierces (breaks it) after the appearance of the complementary signal. Positions are closed in case of price reversal by a certain distance (this is called position tracking).
  •  When trading strictly according to the proposed rules with the help of the MT4 or MT5 terminal, it is advisable, after the signal appears, to monitor the position in real time until its closing. The trader can, at his own risk, introduce changes to the rules, for example, check the position a few times an hour.
  • If the trader has performed all the signals, the system would have shown the following results in the past:
    • In 2006 – 2794 points
    • In 8 months of 2008 – 2055 points
    • After that, the degree of effectiveness of the work has not been followed up at the time of publication of this article.
  • In case the trader having executed all system signals and having traded with a leverage of 1:20 and, in addition, having brought to the system some complementary rules for changing transaction volumes (these rules are for the time being the Academy's know-how) , each thousand dollars would theoretically grow in the indicated time interval:
    • In 2006 - up to US$204006.00Yes... This figure is quite large and, at first glance, it raises doubts, but the result of the test was this - precisely two hundred, not twenty thousand, because in 2006 there were practically no complicated periods and the capital, with the reinvestment, could have grown up very quickly.
    • For the 8 months of 2008 - up to US$29.912,00This amount is the capital existing at the end of August 2008 and not the capital as a whole. In this case, if the remaining months are positive for the system, the degree of effectiveness can very well be compared to 2006.
    • The trader must understand that with the increase in capital he sees the possibility of increasing the volume of new transactions also increased (by reinvesting what he gained in the previous transaction) and, as a result, the deposit can grow much faster than at the beginning of the path .
    • We also draw your attention to the fact that the summer of 2008 was a difficult period for the market and for some time the deposit fell due to a series of losing transactions.
    • However, due to the state of affairs in August 2008, the delay in the probable value of the deposit compared to 2006 indicators is only two months: in 2006 the capital was substantially this at the end of June (29300 US$).
    • As we can see, the impetuous growth of the deposit in the period between July and August 2008 allowed the system to quickly replace the June losses and considerably increase profitability in the 8 months of 2008.

 

Trading System Example

 

TRADING SYSTEM «OF THE LEVEL OF THE WHOLE VALUES»

System author: Yuri Lozgovtsev, Academy of Currency Markets, Russia.

This trading system is designed to trade the GBP/USD currency pair. The hourly linear graph is used, constructed from the closing prices. The trading system is based on the support/resistance levels plotted on the price graph with 100 point intervals between the gradation levels of the price scale (for example: 1.5800, 1.5900…1.8300, etc.)

I. TRANSACTION PERFORMANCE

  1. The trading system gives the 1st signal to carry out the transaction in the rejection of the level if the time has closed within the limit of 5 points, without reaching the level, or else at the level itself. The transaction is carried out 20 points before the close of the hour. If the transaction has not taken place and the price has moved in the direction of the break and has closed over/under the level, then this signal is nullified.For example, if the British pound sterling came down and touched the 1.8400 level (or the time closed at 1.8405) we will carry out the buy transaction at the price 1.8400 + 0.0020 = 1.8420 (1.8405 + 0.0020 = 1.8425).
  2. The trading system gives the 2nd signal to carry out the level push transaction if the price has broken the level and closed no more than 25 points under/over it. The transaction is carried out 20 points from the closing time of the hour, which closed over/under the level towards the recall.For example, the pound sterling went down, broke the 1.8400 level and the present hour closed at the price of 1.8379, we will buy at the price. 1.8399 (1.8379+0.0020).

    If the transaction has not taken place and the price has gone towards breaking the level and has closed under/under the level by more than 25 points, this signal is canceled and we will then work on the 3rd signal.

    If initially we already have the open position so we do not carry out the transaction at the 1st or 2nd signal, but the market has closed the previously opened position and then has shown rejection with the close of the hour in more than 25 points of the level , then the transaction takes place in 20 points from the time of the close of the hour in the direction of the rejection (signs for continuation: 1ºc and 2ºc).

  3. In this case the opening will be worse than in standard signals 1 and 2, but it is assumed that the movement still continues.
  4. The trading system gives the 3rd signal to carry out the level-breaking transaction if the price has broken the level and closed 26 points or more above/below the level. The transaction takes place at 20 points from the time of closing.For example, the pound sterling went up, broke the 1.8500 level and the present hour closed at the price 1.8529, we will then carry out the purchase at the price: 1.8549 (1.8529 + 0.0020).

    If at the present signal the transaction does not take place, but the system has given a new signal, then the old signal is canceled and we will carry out the transaction by the new signal that has appeared in the meantime.

    If within 7 hours the transaction for the signal does not take place, then we do nothing and wait for a new signal. If we get a Stop Loss by the signal, then the next signal in the same direction at this level is ignored. This rule will be valid until the formation of the opposite direction signal.

II. LIMITATION OF LOSSES

After performing the transaction, losses are limited to 45 points.

For example, if we think the American dollar will become “cheaper” against sterling and we execute the transaction «Buy GBP for USD» at the price 1.8546, then we limit our losses on the price:

1.8501 (1.8546 - 0.0045).

But if we believe that the US dollar will become “more expensive” against the pound sterling and we carry out the transaction «Sell GPB for USD» at the price 1.8441, then we limit our losses to the price:

1.8486 (1.8441+0.0045).

III. TRANSACTION PERFORMANCE

As soon as the transaction is completed, the present hour closes with a profit of 35 points and more, we immediately limit our losses to 30 points from the close of this hour. And if the next hour closes for us, that is, it brings us more profit, then we limit our losses to 30 points already at that time. And we keep doing this until the position is closed with a profit.

For example, we bought pounds at the price of 1.8563 and when, after some time, the hour closed at the price of 1.8604, we immediately limited our losses to the price. 1.8574 (1.8604 - 0.0030). The next hour closed at price 1.8645, after its close we limit losses to 1.8615 (1.8645 - 0.0030), and we get a current protected profit of 52 points (1.8615-1.8563).

If sterling continues to go up - our profit will grow, if it goes down we do not change the loss threshold level (ie we will no longer decrease the protected profit).

If 15 hours after the completion of the transaction it is not closed at a loss, but we cannot defend the profit, then, if possible, we transfer the loss limitation level to the transition price: for the tie (ie. , 0 loss, 0 profit).

Until the market closes the hour with a profit of 35 points we have not changed the limit level of our losses!

If the transaction is not closed at a profit, or at a loss, these signals from the trading system will not be accepted or taken into account. Only after the closing of the present transaction do we analyze the chart regarding the signals of the trading system and make a decision regarding whether or not to carry out a new transaction.

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