DCM 策略 (The DCM Strategy)

Hi!

Wow forex is impossible. Or should I say nearly impossible lol!??...

The Daily Cash Machine or The DCM, is one of my best systems to date and I'm excited to share it here with you, so long as you're nice of course

Let me start by saying that in my opinion forex is similar to a coin flip in terms of profit to loss ratios. You usually lose more than you win, unless you martingale.

A lot might say this approach could easily kill an account however, but scaling up in this strategy works well I think because one only has to go 2 levels.

THE STRATEGY:

STEP 1:

Wait for when the lower wick of an up day is 3 pips or less

or, for when the upper wick of a down day is 3 pips or less on the following pairs:

EURUSD
USDCHF
USDJPY
GBPUSD
AUDUSD
USDCAD

Please see the following chart for a visual example:



It's a 5 minute chart of the EURUSD for may 22 2014. It shows a day where the distance from the daily open to the daily high was 15 micro pips. This means the upper wick on this day was also 15 micro pips. This is exactly what we're looking for because this distance is less than 3 pips, or 30 micro pips.

STEP 2:

Place a one unit hedge trade at 5:00 p.m. New York time the day after you identify a setup day as described in STEP 1, each with a Take Profit of 3 pips and a Stop Loss of 27 pips. (you might need bigger values when dealing with the currencies in the group with bigger daily ranges)

This means that hedge trade 1 will be a 1 unit trade, and hedge trade 2 will be a 10 unit trade. Meaning if the first trades you place in the sequence are 0.10 lots ($1 per pip), then the second trades in the sequence will be 1.00 lots ($10 per pip). This is what is meant by scaling up, or martingaling.

STEP 3:

As soon as the first trade of the hedge closes in profit, you now have to move the Take Profit level of the losing trade to the losing trade's price.

This way your losing trade will close at break even, or perhaps with a very small loss.

See the following example chart with a completed DCM trade:



*As per the strategy, the previous day was a Caledonia day (as I like to call them. I grew up on a street named Caledonia) on USDJPY, or small wick day.

What's great about this strategy is that price will usually retrace back to the open at least once or twice in the day. I think this actually might qualify as an edge in forex. Let me know if you think differently..

STEP 4:

Collect your cash!

STEP 5:

If you have a loser, repeat steps 1 - 3 but this time with a 10 unit trade!

This will be rare but will definitely happen from time to time. Let me know if you backtest this with an EA and the system has a loss! Finding that out would be one of the reasons I started this thread.

Thanks for your time!

If you have any questions please let me know

-> From my experience this strategy works best with an FXOpen AU ECN pro account.