In the master class "Be a Trader with iLearney"

As many traders point out, the simpler the strategy, the more logic in its applicationThe less subjectivism in identifying signals and the less grounds for refusing to work them out. Such strategies, with the absence of doubts, i.e. in essence the human factor, can be most effective, both in the hands of the robot and in the hands of the man himself.

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The basics of trading strategy

In this regard, a combination of the basic elements of trading systems based on Ross' hooks and Linda Raschke and Lawrence Connors' "Holy Grail" strategy may allow construct your own unique trading system.

Where is the simplicity here, if one strategy is complicated by another? In fact, the simplification is achieved by the absence of those filters described by the authors. Let's try to do without ADX and "trader's cunning" by building a strategy based on a clean chart and moving average.

To begin with, let me remind you that The Ross hook refers to the failure of a bull (bear) market to record another high (low). That is, we are talking about an unsuccessful test followed by a pullback. Since the necessary condition for the occurrence of these graphical configurations is a trend market, it is necessary to select the most effective entry point. And the moving average can help in this.

In mid-January this year against the background of a bullish trend, the euro/yen currency pair quotes could not stay above the previously formed maximum, which resulted in a pullback (point 1 in Fig. 1). Using EMA21 as a dynamic support, we can find optimal entry point on condition of an unsuccessful test, the confirmation of which is a closing quote of the breakdown bar. If it is above the moving average, then the trader has grounds to apply this strategy (point 2 in Figure 1).

Other elements of the trading strategy

Any trading system is incomplete without defining places of the protective stop order and identifying the target levelat achievement of which the profit will be fixed.

And if everything is more or less clear with the limitation of risks stop loss placed below the previously formed low around 92.2 yen per dollar on the corresponding currency pair, then It's harder to take profit. The fact is that neither Linda Raschke with Lawrence Connors nor Joe Ross gave their readers clear recommendations on this matter. That is, both the profit factor and the floating stop can be used, and even the fundamental level at Y100, which the Japanese government is talking about.

Whatever it was, but a successful entry saves the trader from many problems. That said. combined strategy allows you to use a second screen to detect it.

Two screens method for opening positions

To begin with, it is necessary to smaller time interval mark the horizontal line, which corresponds to the level of EMA(21) on the daily chart.

In the area of the identified support, attention should be paid to the emerging graphical configurations. In particular, on the hourly charts, characterizing the movement of the currency pair usdjpy, appeared the model underlying the Anti-Turtles trading system. As a result of applying the 2B principle of trader Victor Sperandeo, it was possible to make the most of a favorable opportunity by opening a position from the maximum level bar test of the previous market bottom (see Fig. 3).

Thus, by combining known strategies and adding their own elements, for example, in the form of a second screen, the trader has the opportunity to develop a unique trading system, characterized by a moderate risk and high potential profitability.