June 7th, 2010 /  I have been trading the Accelerator Trade for a few months and I have officially decided to stop trading it. My initial backtesting was done on more recent years data, going back to 2008.
Those results were really good. I have since gone back to 2001 and also had the good fortune of having an automated script for Forex Tester to help test this trade much faster (thank you Toshiyuki). My final conclusion verified what I was already thinking. My gut told me that although there was a statistical probability for price to move back to the Weekly Pivot, there was no real motivation for price to do so quickly. This can lead to a loss of sleep and money. With the Counter Trend Trade, price has been over extended when it hits the S3 or R3 levels. Therefore, it should have a tendency to snap back to some equilibrium point, in this case, a Daily Pivot. Many times, this move is very quick because traders realize that price has gotten out of hand and want to profit from the uncharacteristic movement. This is a trade that I still like because it seems to perform well in any time period. Click here to continue reading Death of the Accelerator Trade >> May 26th, 2010 / Here we go again with the Accelerator Trade. Click above to enlarge The result was almost exactly the same as the last trade this week. This time, I exited one position early at a small gain. Therefore, only three positions hit the stop loss at 6680. I ended up losing -1.5% on the [...] May 25th, 2010 / Here is another Accelerator Trade in action. Click above to enlarge This was a tough week for the Accelerator Trade. As you can see, price bounced of the edges of the stack box without hitting the target. This is the kiss of death for the Accelerator Trade. I have started using hard stop [...] May 21st, 2010 / This week was pretty wild but I think there are still a few more pips to be had. Price seemed to be ranging around the Weekly Pivot, so I put in one last trade for the week. Here is the setup on the 30 minute chart.  Click above to enlarge As you can see, the Accelerator trade set up 5 times before this trade. The setup happens when price gets 100 pips or more from the Weekly Pivot (WP). I use a 20 pip buffer from the WP as the target and stack 10 positions 5 pips apart. I was a little apprehensive about taking this trade because of all previous hits, but the long wicked candles at the top still gave a good indication that price would reject that level. Even though price action looked good, I was still cautious. Price dropped down and got close to the target. Since it was Friday, I didn’t want to get stuck in a position over the weekend because Sunday night might gap open. So I wanted to close it out as soon as possible. Here is the 5 minute chart. Click here to continue reading May 21, 2010 GBPCHF Accelerator Trade >> May 19th, 2010 / Click above to enlarge Wow, this was a quick one! It looked like the market was going to snap back to the target just below the weekly pivot so I put this trade on before I went to sleep. As you can see, price hit the target very quickly. I like these types [...] May 17th, 2010 / After my last trade, I decided to scale my trade size way back. This is my first trade at the lower lot size. Here is the 30 minute chart: Click above to enlarge All positions were entered on this trade. As you can see from the chart, the trade then proceeded to go [...] May 12th, 2010 / I closed out the last trade at a loss because I was afraid that the trade will go sharply against me. Well, guess what? Price dropped back down, so I decided to put the trade on again. Here is the 5 minute chart: Click above to enlarge What happened? I got nervous again [...] May 12th, 2010 / Two positions were entered on this trade and it started to go against me. I decided to exit early to prevent a big loss. Here is the 30 minute chart:  Click above to enlarge As you can see from the chart, as soon as I exited, price proceeded to hit the target. I exited because price got close to the previous resistance level. Again, maybe my trade size is too big and that is why I am getting too nervous. If I had been able to stay in the trade, it would have worked out and I would have made money. There is a pattern that I have noticed on these trades. When there is a strong resistance level and price breaks the resistance and goes back below the resistance, there is a good chance that it will head lower, in this case back to the Weekly Pivot. Click here to continue reading May 12, 2010 GBPCHF Accelerator Trade >> May 11th, 2010 / Here we go again with the Accelerator Trade. Click above to enlarge Being a little gun shy from the last Accelerator Trade, I ended up exiting this one a little early. As I mentioned in my last post, I decided that the best thing to do would be to exit the Accelerator Trade [...] May 10th, 2010 / Here is another typical Accelerator Trade. Click above to enlarge This actually opened and closed on Sunday and was good for a +12.0% gain on the account. | Get a FREE Copy of The Forex Strategy Development Course
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