If you've been following my posting the you know that I'm always looking for a way to improve (Kaizen). Over the weekend I think I may have found a method that really works well. It's funny because this trading method actually came from a part of a method that failed in the past.  I had a past method that used about 3 or so indicators to try and generate an entry signal. While going through these old charts i began deleting indicators just for the heck of it and I ran across something that caught my attention. So as always, after passing the eye test I went back and grabbed some historical data and started back testing. I tested it on various time frames and was really impressed with the win percentage which was about 50% but the one thing that bothered me was the inverse risk reward ratio. Meaning that whenever I had a losing trade I would lose much more than what I would gain on my winning trades. So you don't have to be a rocket scientist to realize that if I win the same number as times as I lose then I'll be losing money at the end of the day. So I wrecked my brain and played around with a few settings and found something that worked. I just finished up my testing last night so today is the first day that I am trading it live on a pair so i'm interested to see how it goes. If it does turn out to be a success, then it just goes to show you that you don't need a fancy method or millions of special indicators. Sometimes the simplest methods work just as good, and are a lot less confusing.  However the most important part (as my trading mentor/coach told me) A good method means nothing without the willingness to follow your rules. 
3/3/2011

good

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