If you like to trade manually Black Dog trading system is something that you have to try. It is free and it can be downloaded from many forex related sites and forums (beware I noticed that some websites are trying to sell the system). It is easy to use and it is suitable for both beginners and more experienced traders. Like any system, it requires practice but with this one, soon you will be able to trade profitably. It has a long history as it was introduced back in 2007. Due to its quality and simplicity, it stayed in use over such a long time.
The trading system package includes nine indicators, a template file, and a user manual. Though it is relatively long I strongly advise you to read the manual completely so you will know how to use the system. It can be used for all trading instruments on all time-frames. However, trading the smaller time-frames (bellow 1 hour ) is recommended only during the London session and all the trades should be closed over the night.
The system is using the combination of custom and standard technical indicators. All the indicators are available with the source code files, so the system is not only free to use but also it’s algorithm is publicly available. Big black arrows, a cross of EMA(20) and EMA(100), are called black dog arrows represent a long-term trend. Smaller red and blue arrows, called signal arrows represent momentum and from a technical perspective, they are a cross EMA(3) and EMA(50). EMA(50) on price low and price high are also a part of the strategy. In a separate window, we have two more indicators MACD(10,20,1) and ATR(14). So, the template should look as in the picture below.
The strategy has four different types of entries. The first one, a signal entry occurs when a signal arrow appears and it has the same direction as the last black dog arrow. Price is above both EMAs and the MACD line is above the ATR line and above zero for long entries, while for short entries the price is below both EMAs and the MACD line is below the ATR line and below zero. The second entry type, slightly more risky one is triggered on the black dog arrows. When black dog arrow appears we wait for a pullback, the price has to be above moving averages and MACD above zero and ATR line for long entry while for short entry the price is below EMAs and MACD is below zero and below ATR line. We can also enter on MACD and ATR cross but this kind of entry relatively risky and less reliable comparing the previous two. Finally, we can enter by putting a pending order on the high of the last bearish arrow that has appeared in the bullish territory according to all other indicators or on low of the bearish arrow that has appeared in the bearish territory. The Stop-loss level is 30 to 50 pips below the open price. We exit the trade when ATR crosses the MACD line. Alternatively, we can exit earlier if we are satisfied with the profits.
While I strictly followed the strategy rules I managed to achieve the profits. I decided only to take signal entry and black dog entry opportunities, two less risky ones. I preferred to monitor more trading instruments than to enter more risky trades. I traded forex major, minors, crosses, and gold. When I tried long-term trading, monitoring charts on daily and 4-hour time-frame, I was satisfied with the results as my account started to grow. I also tried a 15-minute time-frame but under the condition that traded pairs with smaller spreads and I also manage to trade profitably. Moreover, I did not take the entries half an hour before a major economic news announcement for the currencies in the pair. While I was trading the only thing that I was missing was a scanning tool that would alert me when an entry opportunity over different trading instruments and time-frames appear. Overall, I was satisfied with the performance.
So, Black Dog is a profitable easy to understand trading strategy with clearly defined entry and exit rules. Moreover, it is free and its algorithm is publicly available. It can be used for trading on shorter and longer time-frames and it can be applied for all trading instruments.