In this article, we take a closer look at the Travel Trading Profit Formula. Although the word “journey” is included in the name, the strategy does not involve trading during the journey. On the contrary, a person hardly has time to look into the trading terminal during the trip.
The strategy author offers to trade such currency pairs as EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY, USD/CHF and USD/CAD on any timeframe from М1 to MN, although personally I don’t see any Obstacles to using it with other instruments, not only on forex, but also on stock and futures markets. Apparently, the author trades only the major currency pairs, which is why he decided not to recommend any other financial instruments.
The Travel Trading Profit Formula strategy desktop.
The strategy desktop:
- The Parabolic SAR indicator with: Acceleration Factor (AF) = 0.02, Maximum Acceleration (MA) 0.2
- The Moving Average indicator with: Period = 20, Shift = 0, МА Method = Simple, Apply To = Close
- The MACD indicator with: fast ЕМА = 12, slow ЕМА = 26, MACD SMA = 9, apply on = close
- The Force Index indicator with: Point = 13, МА Method = Simple, Apply To = Close
A buy signal as part of the Travel Trading Profit Formula strategy
The following conditions must be met for a buy signal to appear on the chart:
- According to the strategy, the Parabolic SAR indicator must be below the price chart
- The moving average indicator must also be below the price chart and facing up
- The MACD indicator signal line must be below 0, outside the histogram area
- The Force Index indicator needs to move up
- The candlestick that meets all of these conditions must be fully formed. Only then could you open a long position
An example of a buy signal within the Travel Trading Profit Formula strategy
The strategy author emphasizes that all five conditions must be met before a trader opens a long position.
A sell signal as part of the Travel Trading Profit Formula strategy
The following conditions must be met for a sell signal to appear on the chart:
- The Parabolic SAR indicator must be above the price chart
- The moving average indicator must also be above the price chart and facing down
- According to the strategy, the MACD indicator signal line must be outside the histogram area above 0
- The Force Index indicator must move down
- The candlestick that meets all of these conditions must be fully formed. Only then could you open a short position
An example of a sell signal within the Travel Trading Profit Formula strategy
A signal appeared during the first hour of the trading week. Although it appeared on a bullish candlestick instead of a bearish candlestick, there was good money to be made.
Stop Loss and Take Profit in the Travel Trading Profit Formula strategy
The strategy author recommends placing the stop-loss order 15-20 points (150-200 pips with 5 digits or 3 digits for USDJPY) away from the entry point, but I strongly disagree with him as this advice is somewhat decoupled from reality.
Of course, this method could work for tiny timeframes, but when it comes to longer timeframes, the recommendation can ruin the whole trading process. I believe the stop-loss order should be placed using the safe, proven and most importantly sensible method: below the previous local low when selling and above the previous local high when buying. And when opening short positions, don’t forget about the spread.
The trading strategy does not require a trader to hold a position. However, I think it doesn’t get much worse if you use new local extrema to mitigate risk and protect profits. However, every trader should test for themselves whether it is effective for them.
At the same time, the strategy does not imply take profit orders. However, if you backtest it and find out that trading Take Profit orders could be more effective, I see no reason why you shouldn’t add them to the strategy.
A trader can close a position opened under this trading system when the moving average has risen after selling or fallen after buying. However, only if the “Parabolic SAR” indicator and the signal line of the “MACD” indicator are above the chart and 0 in the case of a sell and below the chart and 0 in the case of a buy.
However, a signal to close a position has the following peculiarity: if you close a position according to these conditions, you will not be able to profit from a larger trend movement when trading with this strategy. So if a position is already “in the black” and there is a signal to close, I would recommend moving the stop-loss order below the previous local low and above the previous local high when buying or selling.
If the last extremum is in the extremum group, use the lowest extremum of all local lows and the highest extremum of all local highs to place a protective stop order. And if a position is “in the red” after a possible activation of a deferred stop-loss order, it would be wise to simply close it. It would be better to have a missed opportunity than lose money.
Money management using the “Travel Trading Profit Formula” strategy
When trading a certain lot size, the difference in risks in each position can have a significant impact on trading results, regardless of what percentage of orders were successful or what ratio a trader was able to take profitable positions.
Because of this, I would recommend a certain lot size for each order, which would imply risking with the same percentage of the current deposit for each order. First of all, you should definitely not exceed 1% of the deposit. Later you can increase it, but no more than 2%. However, if you plan to risk more, spend a little more time learning and testing the strategy so you can increase the risk percentage on each position, but no more than once a month.
By the way, although the total number of conditions for entering the market is rather small, I would advise writing them down and having them handy. Since the strategy requires you to act quickly when a signal appears, you may miss one of the conditions in a hurry and there may be unsystematic entries that negatively affect trading results.
It often happens that you forget a requirement for a trading signal. To avoid this, use stickers with all the terms and conditions and requirements for each pattern somewhere on your table or desktop where you can see them regularly.
An example of trading on the Travel Trading Profit Formula strategy
It should be immediately noted that such successful and “smooth” orders do not often occur with this strategy. The longer the period, the less often they occur. However, this does not mean that a trader should switch from the timeframes they are used to to a shorter one. It’s better to stick with a comfortable time and increase the risks a bit than the other way around. I’ve personally come to that conclusion, but you don’t have to stick to it.
By the analytical department of RoboForex
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