Channel Trading: Viking1961 500 step system

Hi

This isn't exactly my own invention/system; I got the idea from the etoro guru 'Viking1961' another fellow dane.

It seems like the most solid and quite simply system I have ever come across, so I hope you can either point out the flaws or confirm that this is the holy grail in which case I should probably up my investment

1. Philosophy behind the system: The basic idea is that you select a currency pair and find a channel of 'min-max' boundaries + a safe zone. The two year high-lows of a single pair. This will form the 'channel' within which one trades for the next 3 months.

2. Indicators and parameters: None. You just use past history of a currency pair to pick your channel.

3. Entry and exit signals: None. Every 50 pip move up or down a new trade will be triggered and reach TP.

4. Stop loss and profit target placement: You start out opening both sell and buy orders and with TP 50 pips away. Whenever you reach a TP you open up two new trades at that level with another 50 pips for TP. That way you will effectively range-trade up and down a currency pair, continually taking pips to the bank and slowly increasing the amount invested. Each closed trade takes you another step. Michaels plan is to take 2000 USD and turn it into 400.000ish within a relatively short periode (some 2 years or so).

6. Backtest results: I am currently copying this trader. With a mere 50 USD on a live account. Its intended for 2000 USD, but I am playing on the safe side until I have confirmed that this actually works.

The account is live and has been trading for months now; you can follow Michaels results at:
https://openbook.etoro.com/viking1961/#/stats/ (what matters here is realized equity; an increase of 162% in one year so far).

More information can be found here:
https://www.facebook.com/notes/vikin...77330139012365

Where the system is explained in more detail, charts are provided as are excel sheets with the calculations.

Read more: http://forums.babypips.com/free-fore...#ixzz3g3NUxMOc

Hi, Im trying to figure out where the profits are coming from, reading your post and the creators post, it seems like your always in, taking profit every 50 pips, but opens a new order imidiatly, and also having a massive counterposition... It looks like its just paying alot of spread, and when the SL is reach you would loose everything?

Maybe position size is the secret, could you explain more about wen you are taking profit, and there is no counter trade that is offset?

Best Regards,
Richard

Read more: http://forums.babypips.com/free-fore...#ixzz3g3NXcAsr

Quote Originally Posted by Richard87 View Post
Hi, Im trying to figure out where the profits are coming from, reading your post and the creators post, it seems like your always in, taking profit every 50 pips, but opens a new order imidiatly, and also having a massive counterposition... It looks like its just paying alot of spread, and when the SL is reach you would loose everything?

Maybe position size is the secret, could you explain more about wen you are taking profit, and there is no counter trade that is offset?

Best Regards,
Richard
Hi Richard

I am not an expert in this system myself; at the moment I am just copying the signal. There is a gradual increase in position sizing so that will explain some of it. Every position opened is usually around 1-2% of the total equity. At the moment only 30% out of the available amount is used, so even if they all hit SL it would still have been profitable (given the 160% increase over a year). And yes, when you reach the boundary of your channel; say the top. You dont open up new buy orders.
Also the spread is accounted for in the TP-placement and the opening of new orders.

Anyway - I am hoping someone here can give this system a proper 'system-check', as profits keep coming in, and I see no way it could bust except maybe at some point if the currency pair went completely outside the channel, but even then there would be profits left.

Read more: http://forums.babypips.com/free-fore...#ixzz3g3Nd6fYE

Lately, I've been learning that more exposure [time] in the market = more risk. So when there is no precise entry and exit and just leaving it to the market to reach 50 pips seems risky because anything can happen within that timeframe; price and reverse and run into a loss of 50 pips.

Just an observation.

Read more: http://forums.babypips.com/free-fore...#ixzz3g3NtbORN

Quote Originally Posted by sgpilot View Post
Lately, I've been learning that more exposure [time] in the market = more risk. So when there is no precise entry and exit and just leaving it to the market to reach 50 pips seems risky because anything can happen within that timeframe; price and reverse and run into a loss of 50 pips.

Just an observation.
Well - the positions are opened with no SL; so even if it runs into a loss there will be positions in the opposite direction to make up for the loss.

Read more: http://forums.babypips.com/free-fore...#ixzz3g3NxfsSK

This is basically a grid system with 50 pip lines. What can happen, is if price is towards the top of the channel, and then starts trending down towards the other side, hitting each 50 pip sell TP, but no buy TPs the first buy will be left open, along with all the other buys, and the total balance (equity) will remain the same as initial balance. When the trend, in this scenario, reverses and starts taking out the buy TPs, now you have an equal amount of sells left open, and in a 1800 pip range, that could be 36 open positions, so you would have to use very little margin per position to avoid margin call...also you'll always have to be trading this, because you can't afford to just close all the open orders, because they will all be in loss.

Did you notice the total equity line on the etoro page link? It never gets postitive. You basically have to agree, assuming everything else about the strategy works, and you don't ever get margin called, that the initial deposit is to be given up and only profits will be money you can get back, yes you might get part of your deposit back, but not all, if you have to close all open trades.

Read more: http://forums.babypips.com/free-fore...#ixzz3g3O4ieFg