Belkhayate system

*THIS SYSTEM HAS BEEN DEVOLOPED BY MOSTAFA BELKHAYATE*

I didn't create this system, it was done by "El Mostafa Belkhayate", winner of the Gold Trophee 2009 Technical Analyst ( Paris Salon AT), Silver Trophee 2010 Technical Analyst ( Paris Salon AT), and curently CEO at "Belkhayate Asset Management".

I'm just showing and explaining it to the forum, as I didn't find any thread on babypips regarding this system, and I thought to open one to share with you all

The creator is French native speaker, and there is not much translated into English on the web, but what i found and studied seems enough to be profitable

Mostafa said that, respecting the signals, this system has a 80+% ratio of success.

Let's get into it!

It's based on Center of Gravity and can be applied ot any market and any timeframe, althoguht I've seen it used for the most on H1 and H4

Indicators and Entry Rules
- The dynamic COG is the one shown on the price chart: the middle line represents the COG, while the space between the 2 Green lines represent the area where to buy and the space between the 2 Red lines represent the area where to sell. This indicator uses a mathematical formula developed (polynomial nonparametric regression) to calculate first the center of gravity of a moving stock (blue line), then 3 standard deviations to upwards (red stripes) and 3 down (green stripes). The amplitudes of these deviations are always proportions of the golden number 1.618.
- The static COG works as confirmation in case one of the situations stated above is matched. To be considered a valid entry, the static COG must be between the lines 4 and 8. The closer it is to 8 (-8), or even better beyond that level, the stronger the signal is in order to sell (buy)

Tips
- Dynamic COG Direction: enter only trades signals that match with COG direction (eg: cog lines are pointing UP, we are looking for BUYS only)
- Check Market Flow and trade only signals matching with MF direction to drive more odds in your favour
- Different TF analysis! H1 is showing a buy.. but where are we in term of price on H4? is it above or below blue line? what can we expect on longer term?

Take-Profit
The System TP rules are to set it at blue line (dynamic COG middle-line), anyhow most of the time the price runs till further lines, so splitting up the positions, trailing stop etc etc can help maximizing the profit

Stop-Loss
The System uses Pivot's below (above) the dynamic COG entry-line. What I do is keeping a RR ratio not below 1:2 and look out for possible critical levels around (Trinity extension, Figures, past days S/R, Pivot's etc etc)

In the next example is materalized what explained above

Closed 6 trades today, for a total amount of 105 pips, all 6 positives

EDIT: 1 trade very slightly actually, more BE than profit

how do you interpret and use the mbfx timing indicator with the lines instead of candles? could you explain what divergences you look for and is this recommend by the creator of the system as well or is it just your own preference?

cheers

Sounds like a great system. It also sounds like the Nanningbob system. I dont know if you've ever heard of it but I hear it is an incredible system.

Yes I am, but overlaping it with different signals and static COG seems to let come out a solid system.

I just need a wider backtest to analyse it fully, and to use it in correlation with mkt flow and structure to drive the odds in my favour.

I use it like a stocastich, above 70 I look for shorts, below 30 I look for longs--> when it's not matching one of these 2 situations, in correlation with COG's, I stay still and wait

Look up at NZDUSD example to see a divergence example, once again: it's pretty much used like a stocastich, and I use it as confirmation, to make my entry signal even stronger (to drive odds in my favour a bit more), not as main signal!

As for stocastich, an example of divergence is:

price makes higher high, mbfx fails to make a higher high ----> bearish signal
price makes lower low, mbfx fails to make a lower low ----> bullish signal

This divergences analysis was not reccomended by the creator, It is just a use I made of it.

At disposal for further doubts!

It uses a Moving average (80 or 100 SMA depending on the pair you're trading). It also uses the same concept of counter-trading/equilibrium price/gravity as your system does, except is also includes a martingale in the system. Just make sure you get a recent one as there have been quite a number of them made and some are not profitable anymore...but the logic is still the same.