Pipsqueaks #30 – Part 2: Take Sominex Tonight and Sleep…

In part one I went over the application for the Sominex expert advisor, which was actually developed to support a strategy that I like to call the “Ice Cream Sandwich”. But there are other uses for this expert advisor, some of which I will review today. But first I would like to go over the features of the Sominex.

Like several other expert advisors offered by Slick Trade, the Sominex gives you quite a bit of flexibility in terms of trading. It offers both simple and multi-take profit modes. Simple take profit mode places one trade; multi-take profit mode can place anywhere from 1 to 4 trades, each with its own stop loss and take profit settings. It can be programmed to trail stop; that is, move the stop loss level closer to the positive zone as a trade moves into profit. It has a breakeven feature which will allow the stop loss to snap to a breakeven point a programmed number of pips profit, which can act quicker than the trailing stop loss line can under certain circumstances. And it even has a combination trail stop/breakeven feature which combines the best of both the breakeven settings and trail stopping function. So, under many different market conditions, one’s chances of grabbing some pips have greatly improved. Just remember, as with any other trading activity, no strategy, technique, or trading robot is immune from loss. All trading involves a certain level of risk. But with careful planning, and good money management practices, great potential results are definitely possible. I can testify to that, and I probably will in the next Pipsqueaks.

Okay so what else can we do with the Sominex EA? Basically, it’s function is to place pending orders in opposite directions above and below a candle at a programmable time. This, as it turns out, is a great asset to experiment with but also to trade other strategies with, one of which I will visit here. Take a look at the GBP/JPY one hour chart below:

30 pt 2 - 1 - gbpusd chart forex trading

The candle on the extreme left is the midnight EST candle. We are going to adapt the GBP/USD strategy (essentially London open strategy) to a “start of a new day” strategy using GBP/JPY. Placing pending orders above and below the first candle of the new day seems to be pretty consistent in reaping pips. In the example above, at the close of the midnight candle, pending orders are placed 10 pips above and below the midnight EST candle, the green bullish candle straddling the dotted line. In two hours a buy trade is triggered and maxes out at 62 pips (high of the 3 AM candle), which could have given us as much is 60 pips profit had we set a 60 pip TP, or about 40 pips with a 20 pip trailing stop, which would have worked here (as I checked the large bullish candle that tripped the pending order on a one minute chart – I think the largest retracement was about eight pips – a pretty orderly price rise I might say). I’m not going to include other examples with this currency pair here, instead I would encourage you to pull up a chart and review price movement on GBP/JPY and you will see that it’s good for some sizable pips using this technique.

Now let’s check out the same idea on USD/JPY; check out the one hour chart below:

30 pt 2 - 2 - gbpusd chart forex trading

Looking at the first example on the left side of the chart, we place pending orders above and below the new day candle, the green doji-wannabe candle straddling the dotted line (new day indicator). A sell order is triggered in less than two hours (by the red bearish marubozo, a candle without wicks), then the trade draws down -39 pips, and maxes out at +100 pips. This points out the necessity of having a generous stop loss on this trade (40 to 50 pips is usually a good default SL). This is probably a good point to interject the notion that large drawdowns are best endured while you’re sleeping. Moving on to the next day, we place pending orders above and below the next new day candle, and a short position is triggered, this time without any drawdown, maxes out at +175 pips! How about that for making money while you sleep?

No need for sleepless nights when Sominex is on the job! And what’s better than a good night’s rest? How about Sapphire membership in the Slick Trade Academy? If you have been contemplating membership, why not sign up and give it a try? A great opportunity to learn Forex while getting some hands-on experience with trading, receiving trade signals, accessing expert advisors (like my favorite Sominex), great strategies, as well as help and insight from other traders just like you and more! Don’t lose any more sleep! Sign up today!

That’s all for now – next time I’m going to expand upon the origin of the “Ice Cream Sandwich”. Until then good luck in the market, and, as always, thanks for reading! JC

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