D.T.S.
Daily Trend Surfing is a method that I've been developing and researching since October 2005. I'm still refining it, but since it is 90% complete I'm happy to share my trades with the forex factory community. I'll be applying my D.T.S. method to two currency pairs in this journal, the GBPUSD and XAUUSD pairs. I'll be using real money on an Oanda account. I'll be taking trades at predetermined times, usually around 3am EST and 9am EST.
Daily: There is a potential to take a trade each day of the week. Trades are closed before 5pm EST.
Trend: Successful trades are highly dependent on whether or not a good trend has been established. Choppy market conditions cause my method to fail. Therefore, a decent market volume is essential. More on this in a later section.
Surfing: Why surfing? First, its a major hobby of mine and I can't help but find parallels while setting up smooth rides, in the soup and in the market. Just as in surfing there are the following major components:
1 -Watching for the break-
Trade directions are determined based on pure price action, specifically by examining the direction of the currency pair for a 3-hour interval prior to the trade. The question to answer in surfing is whether the wave is breaking to the left or right. In trading we need to know whether the pair is breaking up or down.
2 -Testing for strength-
Here on the east coast a lot of our waves are just mush. They often don't offer the strength to lift your board. Once I'm in position with the wave behind me and I know whether I'm taking it left or right, I'll angle the board and start pushing down against the tip of the board with my body weight to get a feel for whether or not it can push. The analogy to trading my method is that I set my entry point a certain distance away from the price level, in order to test whether or not their is enough continued movement to propel the trade in the direction I've already predicted. If it can, then I take the trade, akin to standing up on the board.
3 -Outcome-
You either have a good ride or it dinks out beneath you. Always set stop losses as well as take profits. Adjustable take profits are even better.
4 -Staying out of the water-
I've created a list of news-based trading filters. If certain news events are going to be released I won't trade. Also, if there isn't enough news being released, there won't be enough volume, and I won't trade.