177# Closed Daily Candles Trading System
Submit by JanusTrader
Trade Entry Rules - All Using Closed Daily Candles:
• A correct candle (Bull candle for a potential Buy, Bear candle for a potential Sell has closed over the
Kijun-Sen and over the correct 25,1 Envelope outer by at least 10 pips net of spread.
• The 0.0115, 0.115 PSAR is below the price action for a Buy, above for a Sell AND
• The Aroon 14 is showing a correct colour line at 100% AND
When All That Is In Place:
• Set a trade stop entry 51 pips (Add spread as required) beyond the high (for a buy) or low (for a sell) for
the GBPUSD pair (54 pips for the EURUSD and USDCHF)
• Set a contingent limit exit 100 pips gross (Less spread as required) beyond the trade entry point for half
of the trade (you may need to place two simultaneous trades for this - one to exit at 100 pips profit and
one with an indeterminate exit)
• Set a contingent stop loss at 10 pips (Add spread as required) behind the 20 SMA
After reading this entire section thoroughly see the graphics at the bottom of this page.
If a Sell trade has been placed and remains unopened (Not yet triggered) when a daily candle closes
above the Kijun Sen remove the trade. If a Buy trade has been placed and remains unopened (Not yet
triggered) when a daily candle closes below the Kijun Sen remove the trade.
Trade Exit Rules:
• The initial exit point for the first part of the trade is at 100 pips (Less spread as required) which has
already been set as a limit exit
• The second part of the trade is allowed to carry on to reversal.
Closing The 2nd Part Of The Trade:
• Once the first exit has been achieved, bring the stop loss up to 100 pips gross (Less spread as required)
behind the original entry value for the second portion, ensuring a break even trade at worst (if both
portions of the trade are of equal size)
• Exit the second portion either:-
• When a candle closes back by at least 10 pips net (Add spread as required) over the 20 SMA OR
• When a candle closes back over the Kijun-Sen
This system as described has a very high success rate - 90+% wins to the first 100 pip exit and 67%
profitable to reversal, with some of the reversal trades reaching over 2000+ pips duration. And that's from
the last 5 years!
A new trade or continuation trade cannot be placed unless a daily candle has first closed over the Kijun
Sen, therefore if a Sell trade closes a new Sell trade cannot be placed until a daily candle has first closed
above the Kijun Sen.
You'll notice as you follow the trades that the opening stop losses, before the first 100 pip gross profit is
reached, can be sizeable - over 300 pips in certain cases. You have to assume that a sizeable opening
loss will occur at some point, so you must use a trading bank that can withstand a 300 pip loss at some
point. I don't like having double percentage point losses, so a 2000 point bank is my preference, but you
may want to be either side of that.
Bear in mind that's 2000 points for BOTH portions of the trade, meaning effectively a 4000 point bank for
each as they are traded simultaneously.
Once a trade is under way, DON'T be tempted to intervene as you will virtually always get it wrong. This
is end of day, not intraday, trading and different thought processes are needed. Go purely by the
indicators and only use closed candles when taking decisions. Move your trailing stop loss daily 10 pips
net (Add spread as required) above the closed value of the 20 SMA for a Sell trade and 10 pips below the
20 SMA for a Buy trade.
Finally, try and take any decisions as close as you can to midnight GMT as that is when the candles
close. Whilst it's rare for the Far East action to have much effect, it's worth making the extra effort when
you're getting near a potential trade point.
Note of Caution:
Reduce (1/2 possibly) staking when a currency pair is reaching new highs or low as added volatility at
these levels should be expected. When trading GBPUSD either trade cautiously or ignore trades where
your 1st exit profit is above 2.0000 or below 1.5000.
When do I start to use the SMA to move the stop loss?
Adjust the stop loss daily whether the trade is pending or active. Once the 1st part of the trade closes
move the SL to 100 (Add spread) behind the entry, continue to check your trade daily, when the SMA
trailing stop offers a SL less than 100 pips behind the entry value adjust the SL daily.
What currencies can I trade?
We have detailed the set ups required for GBPUSD, EURUSD and USDCHF, but it is so easy to back test
this system why not look at alternatives such as GBPJPY.
Please explain which line signifies Up and which line signifies Down in the Aroon indicator?
The blue line is the Aroon Down and the yellow line is the Aroon Up.
Daily Forex Strategies