Quasi-Random Forex System

Now that I've had some weeks to learn my way around the Forex, I've decided to set up an experiment to help me understand it a little better on a basic level. Enter the QRF system. Please note that I am trading this system on a DEMO account (see the links at the bottom of the page), and NOT with my hard-earned cash.

Purpose:

I want to know what profit-loss ratio (PLR) is most likely to suit my trading style. The focus here is on money management, not necessarily just profit.

I will begin with a PLR of 0.5:1, trading that for a full week before incrementing the ratio to 1:1. I will add 0.5 to the ratio each subsequent week until I am satisfied that I have gleaned all I can from the experiment.

Trade Duration:

This system is based on results, with trades lasting anywhere from minutes to the entire trading week. Trades will end with a take profit (TP), stop loss (SL), or manual closure (CL). TP and SL levels will be determined at the time of the trade, based on what ratio I am trading that week. I will CL any open trades at the end of the week, and sometimes certain pairs if I expect a news day to throw them into a tizzy. Charting intervals are irrelevant to this system, since I'm not using any standard indicators. A trading week will begin Monday morning; I will stop entering trades on or about 2:00 PM (Pacific Time) on Thursday afternoon. Any trades still open when the market closes on Friday will end with a CL.

Trade Entry and Exit:

Enter a position favoring the USD on each of the Big Six at the beginning of the trading week. Subsequent positions in a given pair will depend upon that pair's performance, according to the following rules:

1. A short history showing the results of the last three trades will be kept for each pair. A '+' means that I took a profit on that trade, while a '-' means I took a loss.

2a. If a pair stops out twice in a row, I will stop trading it for the rest of the day.
2b. If a pair stops out three times in a row, I will retire that pair for the rest of the week. This could happen the day after rule 2a is invoked.

3. If I think a news item will adversely affect a pair (and this experiment's result for that week), I will simply not trade that pair for that news day.

4. Reverse position on a - ; repeat the previous position on a + .

For example, if my last trade on USD/JPY (long) stopped out, I will next trade the USD/JPY short. If it took a profit, I would repeat the long position.