Fine-Tuning My Forex Signal Entry and Exit Levels

(Originally posted in my daytrading blog)

Earlier, I have suggested a possible way to get better entry points for the selected forex killer signals. I have been practising it for a few weeks now and it's time to find out how good is the method.

• How to Make 100 pips in One Single Forex Trade

I have performed a simple analysis of my last week trades to look at their end results.

Here are a few noteworthy observations:

1) The day trading system produced 13 signals in total. Based on the new entry criterion, 11 of the signals (85%) scored at least 10 pips or more; 10 of them (77%) scored at least 20 pips or more; and 8 of them (62%) scored at least 30 pips or more.

2) Only 2 out of 13 (15%) scored less than 10 pips and at the end resulted in a loss of no more than 40 pips with stops in place.

3) 5 of 13 (38%) went on to score more than 50 pips and 2 of them (15%) hit 100-pip target.

So what are the best exit levels for these opened positions? The above analysis may help put things into perspective.

Based on these results alone, I will be happy to book 20 -30 pips immediately for this type of improved condition entries, simply due to their high success rate.

I can even book half the profit and leave the remaining half open instead, knowing that there is a 50% chance it will hit 50 pips and a long shot of 20% it will hit the high target of 100 pips.

Keep in mind that the calculated odds may improve further depending on the market conditions. For example, there were some really good results in the early part of May.

Last but not least, I do remember to set stops to limit the risk at all time. I prefer the use of dynamic stops to improve my reward-to-risk ratio.