Now, let’s take a deeper look into the construction of the system, and how filters can increase your profitability while simultaneously reducing your losses. This is how the Vegan Tunnel System works in a nutshell. When the next Fib level is reached (89 pips away from the tunnel), you lock in profits again, and so on. When the price reaches the first Fib level (55 pips away from the tunnel), you should take the first profits and let the remainder run. Similarly, when the price crosses below the lower boundary of the tunnel, a selling signal is generated. When the price crosses the upper boundary of the 144 EMA and the 169 EMA tunnel (this is why this system is called Vegas Tunnel Trading), a buying signal is generated. The basic principle behind Vegas trading is that markets like to trend on momentum. Profit-taking levels are also based on the Fibonacci sequence, with the 55, 89, 144, 233, and 377 numbers used to take partial profits. However, the backbone of the system is two exponential moving averages (the 144 EMA and the 169 EMA), and the 12 EMA that acts as a filter for trades. Barry tried to include tested methodologies in the Vegas system to make it as robust as possible. The system is partly based on Fibonacci numbers and Gann squares. Later, Barry also adjusted the system to work on the 4-hour chart and daily charts for traders who don’t have the time to follow the 1-hour chart. Vegas Tunnel Trading is a trading system developed to trade the Forex market on the 1-hour charts. Barry worked at the Mid America Commodity Exchange as a newbie trader where he thought about how the markets operate and what trading systems would generate the best results.ĭo complex systems really generate better returns than simple ones? What if a simple system could provide a rule-based methodology to enter and exit the markets, and lock in profits as a position goes in the trader’s favor? He included all this in his well-known Vegas Tunnel Trading System. The Vegas Tunnel Trading System was developed by a famous Forex trader named Barry Haigh.
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March 2023
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