Forex trading can be a great way to make money, but it’s not without its challenges. One of the most important things to have when trading forex is a strategy that works. In this article, we’re introducing you to a forex trading strategy that has been tested and proven to be effective. It’s a strategy that can be copied and has been shown to have a profit of 50% over the last 6 months.
Before diving into the details of our strategy, let’s take a look at the results we’ve achieved. Keep reading to find out!
- Overall Profit July to January 2023: 51%
- Pips gained: 849 pips
- Winning Trades in %: 74%
- Average Drawdown: 2,5%
If you want you can follow and check the strategy yourself on cTrader Web.
Click here to go directly to the strategy
Importance of having a strategy
Having a strategy is one of the most important things when it comes to forex trading. A strategy provides a clear plan of action, which helps you make informed decisions and stay focused. Without a strategy, it can be difficult to make consistent profits in the market. By having a strategy, you can identify profitable trades, manage your risk effectively, and stay disciplined, which is essential for long-term success in forex trading.
A good strategy should also be adaptable, allowing you to adjust to changing market conditions. Additionally, a strategy should be tested and backtested to ensure that it has a positive expectancy, meaning that it is likely to make a profit over a large number of trades. A well-crafted strategy can help you navigate the volatility of the forex market and increase your chances of making a profit.
Overview of the AlmaM1 strategy
AlmaM1 is a Forex strategy that focuses on the EURUSD pair. For our trading, we use cTrader and the cAlgo functionality, which enables us to automate our trading strategy through the use of a trading robot.
It is not solely the robot’s execution that leads to profits, but rather the combination of the operator’s expertise and the robot’s automation that yields successful results.
One of the great things about this strategy is that it can be easily copied or reproduced. By end of this article, we’ll show you the steps you need to take to copy the strategy or to run it yourself, as well as the tools and resources you’ll need.
Fundamentals of AlmaM1
The AlmaM1 strategy makes use of a trading robot, also known as an expert advisor (EA) or algorithmic trading, to execute trades automatically. The EA has been programmed to work with different rulesets. For AlmaM1 makes use of certain configurations, which allows it to identify profitable trades and manage risk effectively.
The use of a trading robot help us to eliminate the emotions and biases that can often lead to poor trading decisions. It also allows for the strategy to be executed consistently and with greater speed and accuracy than manual trading. As a result, the trading robot is capable of executing trades 24/7, which can be beneficial for those who are unable to monitor the market constantly.
How does the AlmaM1 Strategy look like
We adhere to a minimal number of guidelines that are simple to incorporate into our automatic or manual trading strategy.
The first rule we adhere to is our trading window. We only engage in trades during high volume periods, specifically the European and US sessions. For those unfamiliar with trade timings, we recommend reading this article, in which we explain the significance of different trading sessions.
The Best Hours to Trade Forex: What Times Are Most Profitable?
Another rule we follow concerns high volatility in the market, specifically during news releases. Whenever we anticipate a high-impact news event in the US or European market, we halt our bot at least 2 hours before and after the news. Depending on the nature of the news, we may also choose to pause trading for the entire day. As we have discussed in this article, news can greatly affect the market and quickly cause trades to go awry, with prices fluctuating rapidly. To avoid this risk, it’s best to avoid trading during significant news releases.
How News Affects Currency Pairs: The Impact of Media on the Forex Markets
Our last rule on timing trades relates to the timeframe of the trading robot. The robot needs to be set with a specific timeframe on which it operates. We have chosen not to use tick-by-tick trading, but rather to trade on a one-minute interval. This means that the bot checks for entry levels and confirmations or updates on existing trades on every new one-minute bar. Stop Loss and Take Profit levels are also set and executed as soon as they are reached.
Technical Confirmations
Let’s move on to discussing the technical criteria for trade entry. The robot is configured to trade reversals, which means it avoids jumping into ongoing market trends on the one-minute chart and instead looks for extreme levels on the price charts. Once such a level is identified, the robot opens a position. Since it is difficult to perfectly time each entry, we have chosen to open multiple trades in succession with small lot sizes. The distance between each entry-level increases with each new trade, and the number of trades is limited to prevent opening too many trades. On average, we open two trades before closing the position.
Which Timeframes are used for confirmations
While the robot looks for reversal points on the one-minute chart, it also uses a higher timeframe to confirm the trade direction. The higher timeframe serves as a confirmation of the trade direction, while the one-minute chart is used to identify reversal points. This means that while we trade reversals on the one-minute chart, we look for confirmation on a higher timeframe before entering a trade.
Lets talk about profits.
Our goal with each trade is to achieve a profit of approximately 10 pips. As we approach this target, we begin to secure profits after reaching a profit of 5 pips. The closer we get to 10 pips, the higher we set our secured profit level.
Of course, with the potential for profit comes the potential for loss. In the past month, we have been able to increase the account size, which has allowed us to decrease the drawdown. Currently, our drawdown stands at around 2–2.5%. Through testing, we have found that the robot performs best when given some room to maneuver, so instead of setting fixed stop loss levels, we have chosen to let the bot continue trading until the account reaches a drawdown of 10%.
The reason behind this stop loss strategy is that, as we observed in the markets, the Forex markets tend to move sideways in the long-term more often than following a single trend direction without correction. Based on our calculations and backtesting, we have determined that a 10% drawdown will work under these assumptions.
The statistics above display the drawdown over the last six months, starting in July 2022. As you can observe, the average drawdown has been reduced through ongoing optimization.
However, there is a noticeable spike of nearly 50% drawdown in October. This was caused by a human mistake, where a high-impact news event was overlooked and the price volatility subsequently experienced a significant increase. This emphasizes the importance of always monitoring news and events.
How to Copy/Reproduce the Strategy
Steps for copying the strategy
If you are new to copy trading, we recommend reading this knowledge base article: Copy Trading
Copying the strategy is straightforward. To start, you’ll need to find a broker that supports cTrader. Having a cTrader ID is necessary to use cTrader. If you don’t have a broker yet, have a look at our review on the broker we are using ourselves.
First, log in to cTrader Web and search for the strategy “AlmaM1” or click the here. Once you’ve found it, simply click on the “Start Copying” button. It is crucial to keep in mind that you should always set a maximum loss limit to protect your account. For example, if your account balance is around $500, it is advisable to set a risk level of 50%. For higher account balances such as $1000, 25% is a more suitable risk level. This is because smaller accounts require higher risks due to the minimum lot size of 0.01.
Tools and resources needed
If you’re interested in running the strategy on your own, all you’ll need is our trading bot. To obtain it, simply send us a message on Instagram and we’ll include you in our ongoing beta program. This will allow you to test and run the strategy on either a demo or live account
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This article was originally posted on: https://almafx.com/skyrocket-forex-earnings-with-almam1
