This is a very simple method and it is all base on price action, indicator free trading and it is done manually.
First you have to open a demo account and make sure that the broker you choose have the ff. pairs (must have) in their platform:
The top seven pairs is set 1 and the bottom is set 2. These pairs will hedge each other. Fresh start this method at the very beginning of the week, this will give you a good look at the pairs as weeks goes on. Set 1 trade them SHORT and set 2 trade them LONG. No SL and no TP. As much as possible run a script (attached) so as to maintain correct timing in opening them. Click twice the profit column of your terminal so as to make the positive profit pairs stay at the top and the negatives stay at the bottom or vice versa. Initially the order of this pairs is a mess, let it run for a day or two and you will notice the pairs will start to make a proper order. All the buys will stay at the bottom and all the sells will occupy the top or vice versa. It like putting to rest the dirty bottled water and it will start to settle down after a certain period and all the dirt to the bottom and the clearer water at the top.
About a day or two, all the buys (if negatives) will stay below and the sell (if positives) will be at the top. Now the indication that you should watch is, ideally the bottom 7 slots should be occupied by the negatives, the first pair in the negative that crosses the boundary of positive and negatives is the pairs we are concern. If one of the negative jump to slot 8 (counting from bottom) there is also a corresponding positive that will jump to slot 7. This is the signal. We will trade those two pairs that jump out of boundary.
You should have another account where you real trading will be executed. You will trade the two pairs that jump out. If the pair that jump up is Long then trade the two breakaway pairs LONG or vice versa. I also trade the next two pairs that jump of the boundary. I limit myself to just 4 pairs being traded at one time. The profit is up to you, what I do is when the pair i'm trading retreats 2 slots then I close it.
Remember do not touch your demo account as this will serve as your indicator and keep it running all the time and just check it once in while for any jumper pair and then trade them.
On the attached terminal copy, you can see the brakeaway pair USDCAD that was a few hours ago and i traded it and make some pips on it. Consequently the other pair GBPUSD also jump 1 slot down and can also be trade Long as well.
I usually only trade a max of 4 pairs that jump out and thats it. What happend is sometimes that breakaway pairs continue to reach the top or bottom or sometimes fall back to original position. If fall back happend then wait again for the next breakout pairs and trade. If its still coninuing to maintain its slot or moving up then just continue the trade. As i mentioned i close only when they retreat 2 slots. Best is you observe yourself the behavior of the pairs for at least a week.
No preference on the tp. your descretion but i normally close trade if the pair retreat 1 or 2 slots. Keep the demo running, it will become your indicator already and monitor it for the movement of the pairs. That is the reason why we have 14 pairs there. That way we can see more or less the moves of the entire currencies on that particular broker. Much better that those indicators, lines and candles but you have to observe it very closely. Eventually it will become like a road map to you and you can make your prediction where this certain pairs will go.
The 2nd part of the hedge account is to execute the same pairs the same direction but this time it will be 2 lots and i also added the comments "2lots" and on the terminal i check the comments so i can see where the newly 14 pairs will settle. As you can see the GU's the 1 lot and the 2 lots raced downward and will continue to reach the bottom or the SELL territory, since it is negative in the SELL territory that will make it its direction LONG, hence i traded the GU. I observe that when the 1 lot and 2 lots are adjacent to each other the trend for both is the same. Remember the "2lot" was just added lately and the 1lot one was entered since Sunday but the trend never change. I hope i explain in well. I suggest keep observing the movement of this currency and you will ntoice a lot of behavior of the pairs and innovate as you go.
The safest trades is the 14 pairs trading one direction. The winning percentage is higher than the 4 pairs tandem. I use the 2 pairs and 4 pair tandem when i feel bored waiting for the opposite trade to occupy the anchor position ( position when sell from bottom half finally dislodged the number 1 buy, it is also the time the buy will dislodge the lowest sell.) The dislodging of anchor of these pairs is what i called the safest time to trade 14 pairs straight.
never trade the EU and UC in the same direction or GU and UJ. Yes those mentors i had were right, however reflecting in on our indicator as an example, if initially the EU is buy at the top spot and UC sell at lowest spot, as trading goes one the EU will move down and UC will move up at a certain point somewhere in the middle they will met and using our guide. Buy going down is SELL and sell going up is SELL then if you shorted both the EU and UC they will be both positive trades upon reaching the middle...isnt it.
Well there are plenty more that you will discover as you continue to observe this method and they are simple to comprehend, you dont need any trend lines and s/r and others.
1) BUYS that jumps up === BUY (if buy jump to profit you buy)
2) SELLS that jumps down=== BUY (if sell jump to loss you buy)
3) BUYS that jumps down === SELL (if buy jump to loss you sell)
4) SELLS that jumps up === SELL (if sell jump to profit you sell)
I just want to make sure that I have this all right... we get a signal to go for a long straight because G/U(BUY) has moved to the number 1 position and E/U(sell) has moved to the last position!
Looking at the demo account you have posted I will trade Long for the ff reasons:
1) Clearly the BUys are moving up the only Sell is the UJ that occupy the 2nd slot.
2) Your profit difference is less than the cost of spread
3) Your recommended trend is Long.
4) The lowest buy is UC which is adjacent to EU its rival. EU is in the anchor position of SELL.
Definitely the UC will stay away from EU. The is also true for the top spot the GU and the UJ.
I would say it is a strong BUY situation.That is my analysis.
Ok the second phase of our trading will be to optimized our trading. Trading all LONGS on 14 pairs is profitable already when there is strong trend. But with 14 pairs traded Long your winning pairs normally is 8 pairs and you loss the 6 pairs. Upsetting one of the pair in the group will increase you winning pairs. You will get the top 4 and the lower 4 and either 2 or 3 of the middle which will make your winning around 10 pairs or 11 pairs. The technique is to trade the UsdChf short when you are trading long or Long when you are trading short.
if Trading LONG;
if Trading SHORT
For safe trading you wait tell those anchors (AudUsd and AudJpy) leave thier spot then you trade LONG. If that happend you your profit will be moving towards 0 and then hold until the profit reaches somewhere 20 or the anchors reaches the the opposite side then wait again for the anchors to leave and trade Short and again and again and again. Ihope you all got the points now.
Anchor pairs will not always be AU and AJ, they just happened to be earlier today when my setup occurred. When Trader101 talks about pairs jumping, he is talking about the anchor movement from the top(most positive) down or from the bottom(most negative) up. Let me see if I can explain better.
example (the perfect setup)I will break them up for easy understanding.
Sell GBPUSD 500
Sell EURGBP 450
Sell GBPCHF 400
Sell CHFJPY 350
Sell AUDJPY 300
Sell EURJPY 250
Sell USDCHF 200
Buy CADJPY -200
Buy AUDUSD -250
Buy USDJPY -300
Buy EURUSD -350
Buy EURCHF -400
Buy GBPJPY -450
Buy USDCAD -500
In this setup GU and UC are the anchor pairs.
1.When UC jumps up and switches places with GJ, this is an indication of trend reversal.
2.When GU jumps below EG this is another indication of trend reversal.
3.When both 1 and 2 jump its an even better indication of trend reversal.
4. Since the sells are on top and the buys are on bottom, the trend will be leaning toward the LONG direction when entereing all pairs.