10 MOST POPULAR MANUAL STRATEGIES - Forex Tester

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www.forextester.com1.436110 MOSTPOPULARMANUALSTRATEGIESwww.forextester.com

CONTENT3Before you start4Short guide on how to use Forex Tester 56Martingale strategies7Martingale Grid & Hedging11Martingale hedging with exponential lotincrease16Price Action strategies17Simple short-term strategy21Engulfing bars23GBP/USD simple breakout system26Simple “Make Pips” strategy29The Trader vs. the Coin33Accurate Trading strategy37The Hedging strategy39The Tsunami Method42Conclusionwww.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM2

BEFORE YOUSTARTDISCLAIMERThe strategies given below are for demonstration purposes only andshould be tested in Forex Tester before using them on a real market.The Forex market is constantly changing, and the strategy that workedin the past may not perform that well in the future. Also, beware thatthe strategy good for one currency pair can be completely useless forthe other pair.One should find their own trading style; determine the strategy that fitsthem the most; find parameters that will give the best profit dsyouusehigh-quality data and particularly the tick data. The mediumquality data is enough for most of the strategies and can betp:/ www.forextester.com/data/datasourcesdownloaded on our htwebsite.However, some strategies require high-quality data only. Please,clickhere to subscribe to this data riptionwww.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM3

SHORT GUIDEON HOW TO USEFOREX TESTER 51.http://www.forextester.com/downloadDownloadthe program from our site.2.Install it on your p://www.forextester.com/orderPurchasea license from our site.4.Run the program.5.Register the Forex Tester using a registration key youreceive in the email.6.Go to the Data tab and open the Data Center.7.Check the currency pair(s) you want to download thehistory data for.8.Choose the data source from a dropdown list.9.Click the “Update from server” button.10.Select the date range and the kind of history youneed: 1 minute, tick, or both.www.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM4

11.Click “Update” and close the Data Center window.12.Create your project using the “New project” button onthe Home tab.13.Choose the currency pair(s) and the history data typeyou‘ve downloaded from the Data Center.14.Set any other additional parameters you need andclick “Create”.15.Start testing your strategy and evaluate the results.www.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM5

MARTINGALESTRATEGIESA martingale is a class of betting strategies that originated fromand were popular in 18th century France.The simplest of these strategies was designed for a game in whichthe gambler wins his stake if a coin comes up heads and loses it ifthe coin comes up tails. The strategy had the gambler double hisbet after every loss so that the first win would recover all previouslosses plus win a profit equal to the original stake.The martingale strategy has been applied to roulette as well, asthe probability of hitting either red or black is close to 50%.Martingale strategies divide into two groups:Using the same lot size.Multiplying the lot sizes.www.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM6

Strategy #1MARTINGALEGRID & HEDGINGCurrency pair:anyTimeframe:M5Indicators:Simple Moving Average (100)Data type:1-minData quality:High(Standard subscription riptionStop Loss:noneTake Profit:10 pips (or any other FIXED value)Projects:nonewww.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM7

BUY RULES:1.Draw the levels (red horizontal lines on thescreenshot) at the distance of 10 pips one fromanother.2.When the price touches the above level, open a buyorder.3.Set the Take Profit at 10 pips value.4.If the price goes up, you win 10 pips.5.If the price goes down and reaches the next lowerlevel — open one more buy order.www.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM8

6.Move the Take Profit of both trades to the order priceof the first trade.7.If the price keeps moving downwards, open tradesevery 10 pips.8.Finally, when the price reaches the Take profit level,you earn 0 pips of the first order, 10 pips of the secondorder, 20 pips of the third order, 30 pips of the fourthorder, and 40 pips of the fifth order. 100 pips in total!9.You can also place Buy Limits at a preselected amountof pips below the initial price (use Forex Tester’s“Ctrl O” hotkey to set a bunch of orders at once. Notethat you can set your own hotkeys by clicking the “HotKeys” button on the Settings tab).www.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM9

SELL RULES:1.Draw the levels (red horizontal lines on thescreenshot) at the distance of 10 pips one fromanother.2.When the price touches the below level, open a sellorder.3.Set the Take Profit at 10 pips value.4.If the price goes down, you win 10 pips.5.If the price goes up and reaches the next upper level— open one more sell order.6.Move the Take Profit of both trades to the order priceof the first trade.7.If the price keeps moving upwards, open the tradesevery 10 pips.8.Finally, all your trades will be closed by Take Profit ifyou deposit is big enough.Positive resultNegative resultIt is not necessary to forecastwhere the market will move. Youcan enter the trade at any pointand still win.If you have a small account andstumble upon a powerfulcountertrend, you can run out ofmoney and lose the entiredeposit.Tip:Use Trend indicators to avoidactivating many trades.Tip:Decrease the lot size or increasethe distance between the trades.www.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM10

Strategy #2MARTINGALEHEDGING WITHEXPONENTIALLOT INCREASECurrency pair:anyTimeframe:H1Indicators:Simple Moving Average (100)Data type:1-minData quality:Medium (Basic subscriptionForexite)Stop Loss:noneTake Profit:30 pips (or any other FIXED value)Templates:SMA 100www.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM11

BUY RULES:1.Open a buy order at any price if the price is above themoving average with the 0.01 lot size.2.Place Buy Limit 50 pips below and set the 0.02 lot size.The Take Profit should be placed at the entry of thefirst trade.3.Place Buy Limit 100 pips below the first trade and setthe 0.04 lot size. All Take Profits should be placed atthe level of the first trade.www.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM12

4.Place Buy Limit 150 pips below the first trade and setthe 0.08 lot size. All Take Profits should be placed atthe level of the previous trade.5.Continue placing orders using the same logic.SELL RULES:1.Open a sell order at any price if the price is below themoving average with the 0.01 lot size.2.Place Sell Limit 50 pips above and set the 0.02 lot size.The Take Profit should be placed at the entry of thefirst trade.3.Place Sell Limit 100 pips above the first trade and setthe 0.04 lot size. All Take Profits should be placed atthe level of the first trade.4.Place Sell Limit 150 pips above the first trade and setthe 0.08 lot size. All Take Profits should be placed atthe level of the first trade.5.Continue placing orders using the same logic.As you see, we double the lot on each trade and change theTake Profit every time the price reaches the next Buy Limit.In case you lose on the trade, you can still earn money.www.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM13

Example: Let’s say you have 5 losing trades in a row, and after that,you place the Take Profit at the level of the 5th trade’s entry.# of the tradeLot sizePipsResult10.1-200 -2020.2-150 -3030.4-100 -4040.8-50 -2051.60 063.2 50 160At the first trade, you lose 200 pips*0.1 lot 20.You lose on 4 trades in a raw, the 5th one is closed with zero loss,and the last trade is the only one that is profitable and covers allthe rest of non-profitable trades. So your profit will be 50.www.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM14

Positive resultNegative resultIt is not necessary to forecastwhere the market will move. Youcan enter the trade at any pointand still win.You won’t have enough money onyour deposit if you struggle frommultiple losses, which is why youmay lose everything.Tip:Use Trend indicators to avoidactivating many trades.Tip:Either open small lots or make ahuge deposit.Trade with the trend (usemoving averages).Increase the distance betweenthe trades (if you set 100 pipsdifference between the tradesfor example, then you will have: -20 -20 0 80 40).There are a lot of people who criticize this strategy. Forex Testerteam suggests you test it by yourself using our backtestingprogram.www.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM15

PRICE ACTIONSTRATEGIESPrice Action is a form of technical analysis that focuses on pastprices traded in the market. No indicators are used at all. The onlynecessity is the chart itself.Using price action, you need to pay attention to the candlesticksonly. As you see from the picture above, there are 4 levels in everycandlestick: open, high, low, and close prices.Depending on the open and close prices of the candlestick, it willhave different colors. These colors will give you a visualcomprehension of the strength of the buyers and sellers. If it‘swhite — the buyers (bulls) have won; if it‘s black — the sellers(bears) have won.www.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM16

Strategy #3SIMPLESHORT-TERMSTRATEGYCurrency pair:anyTimeframe:W1, D1, M15, M5Indicators:noneData type:1-minData quality:Medium (Basic subscriptionForexite)Stop Loss:10 pipsTake Profit:10 pipsTemplates:SMA 100www.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM17

BUY RULES:1.Draw a weekly open on a W1 chart with a pink line.2.Draw a monthly open on a M1 chart with an orangeline.3.Switch to the D1 chart and see if yesterday’s close isbelow those lines.4.If it is above, draw a daily high with a green line.5.Switch to M5 or M15 and set the Buy Stop order at 1 piphigher than the green line (use Forex Tester dropperfor more convenient setting).6.Set Stop Loss and Take Profit values at 10 pips each.SELL RULES:1.Draw a weekly open on a W1 chart with a pink line.2.Draw a monthly open on a M1 chart with an orangeline.3.Switch to the D1 chart and see if yesterday’s close isbelow those lines.4.If it is below, draw a daily low with a green line.www.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM18

5.Switch to M5 or M15 and set the Sell Stop order at 1 piplower than the green line.6.Set Stop Loss and Take Profit values at 10 pips each.www.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM19

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Strategy #4ENGULFINGBARSIf the next candlestick fully covers the previous one, the engulfingpattern is formed. In many cases, it is the signal that the previoustrend is over.RULES:1.Determine the trend.2.Find an engulfing pattern.3.Place the Buy Stop 30 to 50 pips higher than theengulfing pattern / Place the Sell Stop 30 to 50 pipslower than the engulfing pattern.4.Place the Stop Loss at the ATR 5 value.www.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM21

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Strategy #5GBP/USD SIMPLEBREAKOUTSYSTEMCurrency pair:GBP/USDTimeframe:H1Indicators:noneData type:Tick dataData quality:High (VIP subscription riptionStop Loss:Custom (we prefer 10 pips)Take Profit:5 pipswww.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM23

RULES:1.Find the high of the previous day and draw a redhorizontal line.2.Find the low of the previous day and draw a greenhorizontal line.3.Set the Buy Stop at the high of the previous day (redline).4.Set the Sell Stop at the low of the previous day (greenline).5.Set the Stop Loss and Take Profit.6.When one of the pending orders is activated, deletethe other pending order that hasn‘t been executed.www.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM24

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Strategy #6SIMPLE “MAKEPIPS” STRATEGYCurrency pair:anyTimeframe:H1Indicators:noneData type:Tick dataData quality:High (VIP subscription riptionStop Loss:10 pipsTake Profit:5 pipswww.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM26

BUY RULES:1.Find 2 bullish bars (the bullish bar’s close price ishigher than the open price of the same bar).2.Open the order at the close of the 2nd bar.SELL RULES:1.Find 2 bearish bars (the bearish bar’s close price islower than the open price of the same bar).2.Open the order at the close of the 2nd bar.www.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM27

If you have 2 bars in a row in one direction, then the probabilitythat the price will keep going in that direction is more than theprobability of a reversal.Please note that price action strategies should be traded in thedirection of the trend.www.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM28

Strategy #7THE TRADER VS.THE COINCurrency pair:anyTimeframe:D1Indicators:ATR (Average True Range)Data type:1-minData quality:Medium (Basic subscriptionForexite)Stop Loss:40% of ATRTake Profit:none (close at the daily closeprice)Templates:ATRwww.forextester.com10 MOST POPULAR MANUAL STRATEGYWWW.FOREXTESTER.COM29

RULES:1.At the end of the day, take a look at what kind ofcandlestick was formed. If it‘s a bullish one — open abuy order; if it's bearish — open a sell order. (Originally,the decision of what kind of trade to choose was dueto the coin: head – buy, tails – sell. An

Short guide on how to use Forex Tester 5 Martingale strategies Martingale Grid & Hedging Martingale hedging with exponential lot increase Price Action strategies Simple short-term strategy Engulfing bars GBP/USD simple breakout system Simple “Make Pips” strategy The Trader vs. the Coin Accurate Trading strategy The Hedging strategy The Tsunami Method