Greetings, friends. It’s John Foster. It’s not a secret that there are risks at forex and at any other financial exchange. Traders insure them in different ways. Some pay attention to money-management, others set StopLosses, others don’t hold the position for too long, closing once the first profit is gained, fearing the turn of the trend. The reason for this stuff is that never a one strategy can work with the accuracy of 10/10 correct signals or … there is a one which can? Is there a profitable strategy with a high chance for success, which doesn’t fail at all, and each its signal is profitable? Before answering this question, let’s think what could have been then.
1.Strategies Using Indicators and Indicator-Free Ones!
2.Is “The Merger” Real?
3.Which Timeframe to Choose for Trading?
4.The Step-By-Step Instruction for “The Merger” Strategy!
5.Nuances of the Profitable Forex Trading Strategy “The Merger”!
6.“The Merger” 3 In 1!
7.Testing the Strategy!
Firstly, we could have forget about money-management rules and enter the market with by far higher amount than just 10% of the deposit. If your current standard order is equal to 1 lot, then you could have entered the market with 5-lot and even 10-lot orders, using the win-win strategy. Just imagine how great could your profit have been.
Secondly, we wouldn’t have needed any StopLosses, as the price would have never come against our forecast and we would have always been in profits.
So, good dreams, aren’t they? Let’s get back to reality. Surely, a strategy that never fails and gives not false signal is the myth for naïve beginners at trading, however, nobody says there is no profitable strategy with high chance for success, close to risk-free. We can’t get “0” in as the result of division in Math, but we can divide 1 by a trillion and get a value very close to zero. The same thing is in trading – risk-free is impossible, but one can get close to it to the extent that there will be practically no difference. I’m glad to present the unique strategy called “The Merger” in this article, and this system gives 9.9/10 correct signals.
In my previous articles, I have often raised the issue of the benefits of both types of technical analysis. If you trade with indicators, you have advanced financial tools in disposal, which are able to predict corrections, define moods at the market, etc. Indicator-free strategies allow to get trading signals which outgo the chart and gain maximum profit with it, having estimated the moment of the trend turn. Methods of these two types are absolutely different, and are opposite to each other from some point of view. Thus, any trader must decide: to trade with indicators or with indicator-free strategies. Or they don’t need to decide?
Can we combine an indicator-free strategy with one using indicators? Can we use visual analysis along with some additional technical tools? I have been thinking that we can’t, but I’ve found a strategy combining two schools of trading. Surely, in its very beginning, the system was, to say the least of it, unimproved, as I just took the idea to combine indicator-free methods and indicators. After several months of testing and adjustments, I am ready to present “The Merger” trading system – the profitable forex trading strategy with high chance for success.
To be honest, before publishing the algorithm, I was thinking about it for too long, as the strategy can turn forex market upside down. Firstly, it lets forget about money-management rules, which increases the profitability of the system in 3 times. If standard rules say you cannot enter the market with more than 10% of your deposit considering leverage (read more about it in the article “Leverage: What Is It?”), then trading with “The Merger”, this value increases up to 20-30% (depending on your skillfulness). Thus, because of this only feature, you will get 2-3 times more profit than with other trading strategies. After long thinking, I’ve finally decided to share this algorithm with my readers, and let it be. Maybe a new school of trading has been created, based on the merger of indicators and indicator-free methods.
This strategy suits trading at any timeframe, from M5 to D1. I don’t recommend working at the minute-chart, as it has unclear signals and short-term trends. I also don’t recommend using ultra-long-term trading at weekly and monthly charts, as you will have at best 1 entrance point a year trading at them. Profit is maximum at 5-minute and 15-minute timeframes, but it takes much time. If you want to trader in the calmer mode and spend less than 2 hours a day for working, then choose H1 or H4. You will not need even to check the terminal at D1 chart – it’s enough just to analyze the chart on Monday and Friday.
We will need the one indicator for trading, and also some knowledge about graphical models – so-called patterns. The indicator is the standard one, installed in defaults of the MetaTrader terminal – RSI (Relative Strength Index). To insert the tool, you need to choose the needed quote and then: Insert – Indicators – Oscillators – Relative Strength Index. Don’t change anything in settings and click “OK” when the insert window appears.
And now a few words about patterns. A pattern is the graphical figure that usually consists of 2-3 candlesticks. There are many models like this, and you can study some of them in the following articles: “Price Action”, “Inside Bar” and “Trading With Patterns”. If you study all the models described (follow their links), then you will have 10 patterns in your arsenal, which is more than enough to start trading. Then, you will be able to add new models, increasing the difficulty of the strategy and its maximum profit. Anyway, I don’t recommend using more than 20 patterns, and if you want more profits, trade with several currency quotes.
Step 1! Look at readings of the RSI indicator.
Step 2! Now we need to find an entrance point to buy/sell. For that, we need patterns. Once you see the RSI indicator signalizes about the change of the trend – start the precise chart analysis. With that, one has to look for graphical patterns at all the timeframes, which are less than your basic one. For instance, if RSI gives a signal at the M30 chart, then graphical models should be looked for at M30, M15 and M5. If you find a familiar pattern – enter the market immediately.
Step 3! StopLosses should be set according to rules for each pattern – you could have acquainted with them in strategies, links to which may be found in the beginning of the article. TakeProfit must be also set according to general rules described in the article “Trading With Patterns”. You can use the entrance with the one order and with two of them. Surely, in the latter case you gain by far more.
Step 4! Leave the market when the RSI gives the opposite signal or the opposite pattern appears. You can also leave the market via support and resistance levels.
The essence of “The Merger” strategy is extremely comprehensive, but is genius at the same time. We will check accurate pattern signals with the RSI indicator, which can predict the change of the trend and is never late with its signals. If indicator’s readings match the appearance of the graphical pattern – the chance for success is maximum. Further, you will learn about testing the algorithm and how many false signals it gave. But before that, let’s figure out some more nuances and features.
So, we’ve combined indicators and the indicator-free trading. Why don’t we add some elements of fundamental analysis to our strategy, in particular, publishing of important news? How to do that?
Watch for the news with the “Economical Calendar”. Once the important news about your quote appears, start looking for the pattern. Experience shows that graphical models often appear 30 minutes before the news is published. You can study the principle of working with Calendar and economical news more thoroughly in the trading system “News Scalp”. If you want to use fundamental analysis in “The Merger”, I highly recommend looking into this strategy.
I was testing my algorithm for 3 months. I was trading with different currency quotes, trying different timeframes and working with two brokers at the same time. All in all, I could enter the market for 57 times. Guess how many failed orders I had? You won’t believe – none! All the positions opened with “The Merger” forex trading strategy have been turned into profits. Surely, I doubt the system can’t make suffer losses, but the probability that a signal is false is ridiculous.
I was working according to standard money-management rules for the first 2 months. During the first month, I could gain 98% of the initial deposit, as I was trading carefully, opening just 1 order and closing it after 150 pips, never more. In the first month, I started experimenting with scaling the deposit, entering the market with two orders according to rules described in the article “Trading With Patterns”. As the result, my profit was 167%.
In the third month, I forgot about money-management and started entering the market with orders 3 exceeding my standard one in 3 times. Actually, I had by far less entrances, but it didn’t prevented me from gaining 211% of the initial deposit. I admit that it’s my record at forex, and I was in 2-day euphoria after that, eager to spend days at the terminals, having forgotten about anything else.
Now, testing the strategy continues, and I want to implement some more rules of the fundamental analysis in it, but even now one can gain up to 300% of the initial deposit per month. Even if you don’t use double orders and trade with 10% according to standard money-management rules, you are likely to gain about 90-100% per month with no efforts. The main thing is stick to rules described in the step-by-step instruction above, and don’t enter the market where there is no trading signal of the indicator and pattern.
I have nothing else to tell you about the profitable and practically risk-free forex trading strategy “The Merger”. It works and has its result. Surely, you will need to study thoroughly all the rules in this article and others (see the links). It will take 10-15 hours of your time, but, I think you agree that the opportunity to gain even 100% per month at forex is worth it, let alone if you comply with some conditions, this value can increase in 3 times. The profitability of the system is 100-300% per month, and its accuracy is 9.9/10 correct signals.
Get lucky and gain much, …. no, TOO MUCH!
Best Regards, John Foster
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|Moving Averages:||Buy (0) Sell (12)|
|Indicators:||Buy (1) Sell (4)|