348# FX Stage Trading System
Submit by Janus Trader (Written by http://www.stage3forex.com/ ) 09/06/2012
Time Frame 15 min or higher .
The Trend Indicator is used to understand market direction. A close above the indicator signifies a Long Biaswhile a close below signifies a Short Bias.
The VCycles Indicator is a proprietary index measuring the patterns and magnitude of an instruments volatility. It is used to filter trades by eliminating areas where the propensity for a move is low while highlighting areas with a high or increasing propensity for a move.
Entry Rules: A BUYor SELLsignal is defined as either:.1. A close above / below the Trend Indicator WHILE short term volatility is increasing (VCycles displays Green).
EXAMPLE: An hourly close breaches the Trend Indicator in a downward direction, while at the same time the VCycles Indicator displays increasing short term volatility (Green). Yielding a SELLSignalOR2. Short term volatility increasing WHILE the current price is above / below the Trend Indicator EXAMPLE: The current price is already above the Trend Indicator AND VCycles begins to show a measurable increase to short term volatility (the indicator begins to display Green).
In the below example, a BUYSignal is generated based on the first entry rule; A close above / belowthe Trend Indicator WHILE short term volatility is increasing.
Training In the next example (below) multiple short signals are generated based on the second entry rule;Short term volatility increasing WHILE the current price is above / below the Trend Indicator
Stop Loss & Targets In this section we will explain the methodology behind selecting stop loss and take profit levels. A static stop loss and take profit should always be placed at the time at which a trade is opened. Under contain circumstances it is appropriate to trail the stop to protect the position, these situations are explained in detail in the following section entitled “When to Trail the Stop”.
Stop Loss Placement Example: In the example to the right, a Buy order is opened at “1” and the initial stop is placed below the Trend Indicator at “2”Another Example follows. In general, a trader should seek to place the initial Stop Loss to the outside of the Trend Indicator. For example a Sellorder should have a stop placed abovethe Trend indicator, while a Buyorder should have a stop placed belowthe Trend Indicator.
Placement Example: In the example to the right, a Buy order is opened at “1” and the initial stop is placed below the Trend Indicator at “2”.
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