AS INVEST: Simply Money Management System (SMMS)

Professional traders know how to lose. They are not better in winning, nor have a better strategy than you (if your strategy gives you more than 50 % winners, lol), they are just better than you in taking losses. That may sound rough, naive, archaic, whatever, but nevertheless its true. There is no holy grail indicator, nor a holy grail system. Warren Buffet has none and George Soros also not. The point in being a successful trader and dont belong to the majority of forex losers is simply to have a logical Money Management. Talking is cheap.... i know. Thats why i am starting here and now this journal to see if its possible to trade successfully just with one indicator and good money management. I will start today with a 100 Dollar live miniaccount and see how this strategy works.

Rules are simple: one indicator RSI 20. Hourly charts, 4h and daily. Pairs: EUR/USD, GBP/USD, USD/CHF, EUR/GBP AUD/USD, NZD/USD. Also EUR/JPY but due to its higher volatility we set the RSI there to 30. USD/CAD i dont like to trade at all, this pair is just nuts. USD/JPY I also dont like to trade because under these market conditions this pair is too choppy, as USD and YEN are both seens as safe haven currencies. Leverage is 1: 200 and one pip EUR/USD is worth 10 cents. Our total risk capital on each trade is 0.03 lot, devided in three units of 0.01 lot. That a reasonable profit/risk reward. Thats trading and not gambling.

We forget all these famous rules like "the trend is your friend", "never add to a losing position", "the market is always rigth" and other fairytales. You can set up your chart with just the rsi indicator and dont even have to look at the price chart. We enter first sell 0.01 lot when 1h, 4h, or daily RSI is at or above 70, buy when hourly/4h or daily RSI is at or under 30. We have more two units to add if the price goes severely against us. SL: RSI goes back under 60 , but price still over our combined entry level and vice versa. Important: our trade is triggered through RSI indicator, then its only logical that is also has to be the RSI indicator that brings us out of the trade, no pip value or trendline break etc. Thats a logical setup, the RSI brings us in the trade, RSI brings us out of the trade. TP: RSI trendline. If we are in with multiple units, we exit at trendline firts unit, and wait to see if trendline is broken. If only 1 unit is in trade, conservative strategy is exit all at trendline test. Aggressive strategy: wait and see if trendline is broken, and put entry to breakeven. Trendline of RSI is always first profit target. If broken, then stay in trae. if not, exit.

Now I only have to say sorry for my bad english, its not my mother language,and then we can beginn:

Monday 20.07.2009

Three triggers in hourly charts, all turned at RSI 70 level, so i only was in the trade with one unit 0.001 lot each:

USD/CHF 1.0670 buy monday. 1 h RSI at 29.70, exit at RSI trendline 1.0691 21 pips (conservative strategy)

GBP/USD 1 h RSI at 70, entry 1.6540 1/3 unit, exit at RSI trendline 1.6490 for 50 pips (conservative strategy)

AUD/USD 1 h RSI at 70, entry 0.8160 1/3 unit, exit at RSI trendline 0.8141 19 pips (conservative strategy)

all three RSI trendline were broken after, so if you are aggressive and kept staying in the trade, your profits were much higher.