New Strategy - Take those losses!

Been trading about a week using my latest strategy on a demo account. Results have been promising. With an initial capital of 23k:

10 Aug - lost 700, made 3100
11 Aug - made 500
14 Aug - lost 1400, made 3100

Early days yet I know but still, really promising. And with fewer than 10 trades a day.

Key assumptions:

Trend is your friend. I stopped using EMA6 as my trend indicator. I now use RSI-1min. And when it's RSI-1 30, I go short. Logic being that when RSI-1 hits 30, RSI-5 should hit 30 too, and so on and so forth.

This also allows me to trade without stops which is awesome cos I reduce the risk of fakeouts. I simply close my position when the rsi-1 hits 70/30 and take the losses, but enter an immediate trade in the new direction.

This is why I make the big losses. I then let it run if RSI-1 continues in the trending direction. I take profit when my daily target is met (500-1000 profit).

The biggest risk is that I could simply be taking loss after loss in a trending market. This is something I've been trying to counter. The current rudimentary method is if it bounces between rsi-1 30 and 70 twice, I wait out for a double run in one direction before entering the trade, using that as an indicator that support/resistance levels have broken.

If this works out over the next year, I think we might be in serious business!

Yours,

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