A Daily Timeframe Strategy That Pulls 100-500+ Pips Per Trade

Trading Strategy
This is a guest post by Ahmad Hassam

This is a daily timeframe strategy that can make hundreds of pips per trade for you without you having to spend hours staring at your computer monitor. Wake up in the morning, scan the charts on the daily timeframe, setup your trade and that’s it. After that you are free to do whatever you want to do.

Let’s discuss this Daily Timeframe Strategy. This Daily Timeframe strategy uses only two indicators. These are the Bill William’s Accelerator Oscillator (AC) and the Stochastic Oscillator. The Bill William’s Acceleration/Deceleration Indicator (AC) measures the acceleration and deceleration of the current driving force.

Bill Williams is famous for his application of Chaos Theory to Trading plus his concept of fractals. Bill Williams says that before price behavior changes, momentum changes and before momentum changes, there is acceleration and deceleration. Knowing acceleration/deceleration can give you an advanced warning. This oscillator does exactly that.

Stochastic oscillator is another popular indicator that tells you about the overbought and oversold condition in the market. It has two lines, the %K and the %D. %D line is the moving average of %K. %K is shown as a solid line while %D is shown as a dotted line.

Let’s set the system up. Open your MT4 platform. Open any currency pair daily chart and attach the Bill William’s Accelerator Oscillator (AC) to the chart. Choose Green as the value up color and red as the value down color or whatever colors you like, it doesn’t matter. Attach the stochastic with setting of 5,3 and 3 on top of the AC oscillator.

Enter into a long trade when the green AC is above zero and the Stochastic is above zero level. Exit the long trade when the red AC is below zero and the Stochastic is below zero. Similarly, enter into a short trade when the red AC is below zero and the Stochastic is below zero. Exit the short trade when the green AC is above zero and the Stochastic is above zero. Since, you are using the daily timeframe, you need a wide stop loss. Enter the stop loss of 100 pips below the long entry and 100 pips above the short entry.

Practice this Daily Timeframe Strategy on your demo account and see how easily it can make hundreds of pips per trade for you. Once, you have practiced this Daily Timeframe Strategy and mastered it on your demo account, you can trade live with it. Good Luck!

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Comments

I do not understand what you mean in ” Attach the stochastic with setting of 5,3 and 3 on top of the AC oscillator.” (http://www.forexmachines.com/articles/a-daily-timeframe-strategy-that-pulls-100-500-pips-per-trade/)

Best regards,

Ruben Fernandez
capima @ hotmail.com

Hi,
The stocasthic I know is:
0 – 100
Level 20, 50 , 80

I don’t know the Attach the stochastic with setting of 5,3 and 3 on top of the AC oscillator.

Ruben open the stochastic,go to inputs and set the 5 3 3.very simple..

I may be missing something here however the Stochastic loaded on my mt4 does not go below 0..?

Can someone please explain a little further?

Thanks.

Ahmad,

Thanks for sharing this, however I can fully understand the questions about the Stochastic, can you confirm the following is a correct interpretation of the ‘5,3,3?

Value for %K = 5
Value for %D = 5
Value for = 3

Price Field as default = Close/close

MA Method as default = Linear Method.

Another question about entry, can’t quite see how a zero line is much use, would it not be better to add a 50% line to the Stochs and wait for line to cross that, it seems to give better results in back testing. The other thing to bear in mind is that MM with a 100 pips stop loss needs to be calculated correctly in relation to your acceptable risk profile and some of the trades I looked at lasted for 25 days but yielded a 1000 pips or so.

Banjob/Ruben,

In MT4 load the AO onto your desired pair. Once the AO is loaded, drag and drop the Stoch over top of the AO that is already loaded to your chart. This will make the 2 indicators over lap. The zero line is the zero line of the AO indicator. When both cross the zero line (long or short) you take the trade.

Banjob/Ruben,
Correction

In MT4 load the AC onto your desired pair. Once the AC is loaded, drag and drop the Stoch over top of the AC that is already loaded to your chart. This will make the 2 indicators over lap. The zero line is the zero line of the AC indicator. When both cross the zero line (long or short) you take the trade.

I have set up 3 charts as suggested by Ahmad but wonder how the comment from Ahmad “After that you are free to do whatever you want to do” actually works as the system ONLY suggests setting a SL.The system suggests exiting when certain conditions are met BUT if you are not there watching it ??
Cheers Oldie

Peter, run it in the daily chart. Check it once per day, at the close. If any of the conditions are met, place the appropriate trade.

This might work but only when you trade with the trend. If you had taken all the trades this strategy produced so far this year, you would be at -66 pips. So far, there have been 4 short signals for a total of -918 pips and

4 long signals for a total of 852 pips. Stop loss should be around 150 pips.

Go to View>Navigator.Click on + sign next to indicators. If you already have your AC open, select Stochastic Oscillator and drap and drop it to you AC indicator window. It should work.

This is a strategy that’s been around since at least 2006 when i first heard about it and it’s probably been around since before that. It works, i’ve used it effectively but it requires a bit of attention during the first few hours of a trade since you have to watch for the correct signals based on the particular conditions, but it’s hardly a full time job.

A few things you should know that aren’t fully explained in this article is that you shouldn’t open a trade unless BOTH lines of the Stoch is passed the 0, if they’re not both passed 0 you should open it on the next candle if it’s still going in the same direction. On the AC, the first candle after the 0 is what i call an “entry” signal and isn’t always going to produce a good trade if you follow it immediately so sometimes it’s a good idea to wait for the next candle to be sure and prevent any loss (Can’t lose if you don’t trade). Also a good idea with the take and stop orders; keep multiple TP’s in increments of 50 pips and a single SL at 100 (as the article says) BUT, when you hit the first TP at 50, move the SL up 50, so that at this point, you’ll only break even, after the next TP at 100, move the SL again the same amount, up to 0, and from here you you leave it be and worry about something else since you’ve already won whether you have other TP’s or not. There’s usually 3 to 6 trades per week with this system and it’s easy to use and very effective if you’re careful.

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