Over the next 4 weeks I’ll be demo trading a Head and Shoulders Forex strategy and providing regular updates. If the strategy turns out to be profitable, I will begin trading it on a live account.
1. Identify Head and Shoulders topping patterns across major currency pairs on 30m, 1 hour and 4 hour charts
2. Short neckline breakouts*, with a stop loss above the right shoulder and a 1.5x risk take profit
3. Risk per trade will be 2% of account balance with only one simultaneous trade. Stop will be manually trailed to break even at 1:1
I will be trading this strategy til the end of March on a Vantage FX RAW ECN demo account and assessing the results at the end of the period. I’ll use the ECN model over the standard, as tight spreads are essential when trading smaller time frames. At the end of the period; I’ll either scrap the strategy, make adjustments, or run it live (depending on success).
Before running the strategy live, I would like to see a profit factor of at least 1.5 (gross profit at least 150% of gross loss).
Whether your just starting out or an experienced Forex trader, I think this will be an interesting experiment to track. I will publish regular critical updates here and you can track my progress at myfxbook. If you have any questions, feel free to contact me via Twitter.
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