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EURJPY 1H SCHIFF PITCHFORK LONG TRADING STRATEGYThe Andrews Pitchfork Trading Strategy Our team at Trading Strategy Guides likes to use the Pitchfork trading system to identify a change in market behavior and make a profit from it. It’s important to understand what Andrews Pitchfork is and what pivots to use. This will give us more confidence later when taking the trades based on the Pitchfork trading system. Moving forward, we present the buy-side rules of the Andrews Pitchfork trading Indicator. Step #1: Identify the Three Pivot Points necessary to Draw the Pitchfork lines. The first thing you need to establish for the Pitchfork trading system is to identify three pivot points necessary to draw the Pitchfork lines. For more insights into this topic, check out the what is Andrews Pitchfork section. Since we’re looking for buying opportunities, we need to identify a series of rising pivot points. Step #2: Apply the Pitchfork indicator starting from Pivot 1 and move through Pivot 2 and Pivot 3. Now, use the three pivots identified and draw the Pitchfork trading system lines by connecting the pivots together. Start from Pivot 1 and move forward through Pivot 2 and Pivot 3. During this stage, you’ll be plotting the Pitchfork trading system lines. This will map the most important dynamic support and resistance levels. Once you’ve done this correctly you will see a rectangle or pitchfork formed. Step #3: Buy at the market at the first retest of the lower Pitchfork support trendline. With the Andrews Pitchfork trading strategy, the price should be contained inside the Pitchfork parallel channel. In this regard, if we’re looking for buying opportunities, assume the lower Pitchfork support trendline to hold the price for a bounce. We recommend buying when the lower Pitchfork support trendline is tested. The next logical thing we need to establish for the Andrews Pitchfork trading strategy is where to take profits. Step #4: Take Partial Profit at the Median Line, and Take Profit 2 at the upper Pitchfork Resistance trendline. The Pitchfork trading system gives you the flexibility to manage your trades in many different ways. Our mantra is, “Keep it Simple, Stupid.” In this regard, since the core principle of the Andrews Pitchfork trendline is that price tends to gravitate towards the median line, it’s the logical place to take some profits off the table. We only take partial profits on the median line because we also want to maximize our profits. This will give the market a chance to retest the upper Pitchfork resistance trendline. With the Andrews Pitchfork trading system, we’re trading in the direction of the trend. So, the expectation is to see the price moving higher and eventually retest the upper Pitchfork limits. Note: After TP1 was reached, move your SL at BE. We accomplish two things by doing this. First, we make sure that we accumulate profits. And secondly, if the markets reverse, make sure you stopped at BE and don’t lose any money. The next important thing we need to establish is where to place your protective stop loss. Step #5: Place the Stop Loss below the lower Pitchfork trendline and add a buffer of 20-30 pips. The recommended place to hide our protective stop loss is by adding a buffer of 20 – 30 pips below the lower Pitchfork trendline. Normally, in an uptrend, the support Pitchfork trendline should hold the price above. However, in order to protect ourselves from possible false breakouts, we’ve added a buffer of around 20-30 pips to our protective stop loss. Note* In a strong uptrend, it’s quite normal for the price to break and trade above the resistance Pitchfork trendline. Inversely, in a strong downtrend, it’s quite normal for the price to break and trade below the support Pitchfork trendline. Andrews Pitchfork Trading Strategy Conclusion There are many Andrews Pitchfork trading strategies that can be built around the Pitchfork trading system lines. They can all be simply derived from the Pitchfork’s trading rules. In order to use this system, you need to understand what Andrews Pitchfork is. You can also read our best short-term trading strategy. Andrews Pitchfork is simple to understand because, according to the Pitchfork trading system principles, you only need to know these three rules: Price tends to gravitate towards the median line. When price breaks the median line there is a high chance it will pull back to retest again the median line. When price breaks the Pitchfork channel on the opposite side of the channel direction, there is a shift in market sentiment and the trend can reverse.
Education
by Tradingstrategyguides
AUDUSD ALEXANDER ELDER 3 SCREEN TRADING STRATEGY As the name of the Elder trading system suggests there are three “screens” that we apply to every trade. The three screens used by Alex Elder can be summarized as follows: First Screen used for establishing a trading bias. The second Screen applies technical indicators to identify retracements against the trading bias established earlier. The third Screen is used for timing your entries using short-term breakouts in the direction of your trading bias. As you can probably tell, the Alex Elder trading rules involve the use of multi-timeframe analysis. The first screen starts with higher degree time frames and subsequently we downgrade our time frames lower as we progress with the 3 screens. In total, trading Alexander Elder system involves using three different time frames: The long-term trend – Alex Elder calls this as being the tide The medium-term trend – this trend is also known as the wave The short-term trend – it’s also referred to as the ripple Elder Trading System – First Screen According to Dr. Alexander Elder’s rules, the first screen starts with a time frame bigger than the time frame you’re looking to trade. For example, if your preferred time frame is the daily chart, you first start by looking at higher time frames like the weekly chart. This is the chart where you’re going to apply the trend-following indicators to establish your bias. If the trend is up, we only look for buy signals. Inversely, if the trend is down, we only look for sell signals. By going through this process, we can filter out trades against the primary trend. Elder Trading System – Second Screen Dr. Elder trading rules recommend downgrading our time frame lower. If during the First Screen we used the weekly chart, the next lower time frame we can use is the daily chart. Now, we look for price movements against the tide. In other words, we’re waiting for pullbacks or what Elder system calls the “wave”. Learn the most profitable approach to profit from pullbacks HERE. This in return will help us spot good times to execute your trades. The Elder trading system uses oscillators to identify these price movements against the tide. For example, if the weekly tide is up, then we’re looking for the oscillator to identify when the wave is down and that’s when we buy. On the other hand, if the weekly tide is down, then we’re looking for the oscillator to identify when the wave is up and that’s when we sell. Elder Trading System – Third Screen The Elder trading system refers to the third screen as the execution screen. Or, in other words, this time frame is used for better timing our entries. We have to downgrade our time frame lower. The next in order time frame is the 4h chart. When the trend on the third screen aligns with the trend of the first screen that’s the optimal trade entry. To time your trades, Alexander Elder uses a trailing stop in order to seize small breakout in the direction of the main trend. Basically, that’s what the Elder system is all about. Dr. Alexander Elder Rules on how to Use Multiple Time Frame Analysis The Alexander Elder trading strategy uses a technique to balance out the different information that comes from looking at different time frames. The Elder’s technique involves using a factor of four to six to classify his time frames. Let me explain… Alexander Elder factor of 4 to 6 can help us divide our charts into smaller units of 4, 5, or 6. The way to go about it is to first select your larger time frame (first screen) and then downgrade the charts lower by a factor of 4, 5, or 6. For example, if your first screen is the daily chart and we downgrade our time frame by a factor of 6, the next time frame would be the 4-hour chart. Four multiplied by 6, it gives us 24-hours, which is a day. Using a factor of 4 will require us to downgrade our charts to the 8-hours time frame. Now, to find your execution screen aka the third screen, we have to downgrade our time frames lower one more time. If we used a factor of 4, the next down in line time frame is the 1-hour chart. So, the 1-hour time frame is our third screen. Note* if after downgrading the charts, the exact time frame doesn’t exist, then as a general rule the closest one is used. This is the method used by Dr. Alexander Elder to select his time frames. Long Range - 1st screen Weekly - 2nd screen Daily - 3rd screen 4H Mid Range - 1st screen Daily - 2nd screen 4H - 3rd screen 1H Short Range - 1st screen 4H - 2nd screen 1H - 3rd screen 15m When to buy using the Alexander Elder Trading Strategy According to Alex Elder trading rules, the best moment to buy is when an uptrend has undergone a pullback and has started to resume the bullish trend. For this example, we’re going to use as the first screen the 4H chart. So, the 4H chart is used to determine the long-term trend. And, for this purpose, the 200-day moving average, which is the standard measurement of bullish and bearish trends, will be our trend filter. Check if the price is trading above the 200-day moving average to confirm the uptrend. The next step is to downgrade our time frame to the second screen. If the first screen used the daily chart, the next in line time frame is the 4-hour chart. The middle time frame is going to be used to spot corrections against the bullish trend. For this purpose, we’re going to use the MACD indicator applied to the 4-hour time frame. We wait for the MACD lines to rise from the oversold condition and the moving average slops have turned upwards again. Note* Dr. Alexander Elder recommends to use the Force index or another momentum oscillator to add more confluence. The next step is to downgrade our time frame to the third screen. If on the second screen we used the 4-hour time frame, the next in line time frame is the 1-hour chart. The short-term time frame is going to be used to time the market. However, since Alexander Elder doesn’t provide rigid rules for entry and exit, it’s time to reveal the Ace from our sleeve. For timing the market with great result, we’re going to use the Know Sure Thing indicator. On the 15m time frame, we wait for the Know Sure Thing oscillator to cross above the zero lines to trigger a buy signal. The KST indicator is great because it also signals burst in momentum. What does it mean for your trade? Simply, you get the chance for your trade to show a profit right from the start. Note* for sell signals the same trading rules can be applied but in reverse. Final words – Alexander Elder Trading System The Alexander Elder trading strategy can be used as a building block for your own trading strategy. The Elder trading system has the advantage of using multi time frame analysis to verify the market trend in several degrees. According to Dr. Alexander Elder, the single most important factor that will dictate your profitability is the quality of the records that you keep. We succeed in some trades and make mistakes in others. However, we can only improve our trading strategy only if we learn from both winning and losing trades. And, that’s why Dr. Elder believes that journaling is an absolute must as it makes you into your own teacher.
Education
by Tradingstrategyguides
14
EURAUD 15M BIG BEN BREAKOUT TRADING STRATEGYRule #1 Define the London Trading Range We’re going to use the range definition that takes into consideration only the body of the candles, excluding the wicks. Note* this trading rule can be adapted as you get more experienced at reading the price action. This strategy works because the Asia trading range tends to attract buy and sell stops above and below the trading range. The bulk of buying and selling stops becomes an easy target for the smart money. Remember that traders need liquidity to execute their orders. And, the smart money is always in search of liquidity to fill their large orders. That’s the reason why the smart money needs to trigger those stops. Rule #2: The One-Hour before the London Open Needs to Generate the Breakout Our backtesting results revealed that momentum really starts to pick up 1-hour earlier than the actual London opening session. There are some smart ways to trade this burst of momentum. Let’s see some technical ways to trade the pre-London open. We don’t need to guess in which way the market will break, we let the market tip his hand and show us the way. This is where things get interesting. Let me explain… During the London session we’re going to see the most traded volume thus the foreign exchange market should really take off in one direction or another. Rule #3 Price needs to fade Immediately after the London session opens, we want to see the price fading the pre-open move. If the move starts fading, we know it was a false breakout. Smart money has used the pre-open move to trigger the stops above the range and now they reverse the tie and start selling. We want to see price pulling back into the range at the same speed as it went up. Let me explain… In simple words, the bearish momentum used to produce the false breakout needs to be equal to the bullish momentum used to fade the pre-open move. We enter our trade after the first 5-minutes have confirmed that the price is reversing. Once this trade setup is completed, you should see a price formation that takes the V-shaped form (or inverse V-shape). Rule #4 Take Profit or Ride the Trend We can measure the size of the Asia trading range and project from the top or bottom of our range to get our profit target. But, oftentimes this type of setup can lead to a trading day that can extend in the days to come. Now, in this case, it’s wise if you employ other trading tactics so you can actually profit from this trend. In this example, the better take profit strategy would be to use a trailing stop. You need to be ready to explore other trading methods to manage your trades. Rule #5 Use a Time Stop Instead of a Price Stop In order to fade the London breakout, you need to use unconventional trading methods. In this regard, for our stop loss trading strategy we’re going to use a time stop instead of a price stop. The first time I’ve ever heard about the time stop concept was while reading the Market Wizards book. Billionaire Hedge Fund manager Paul Tudor Jones one of the greatest traders of our times said: “When I trade, I don’t just use a price stop, I also use a time stop.” So, how to apply the time stop to the London strategy? It’s very simple… If, in the first hour after the London open the price didn’t COMPLETELY reversed the pre-opening breakout, we exit the trade. It’s simple as that, no further explanation is needed.
Education
by Tradingstrategyguides
Trade Forex Like an Investment BankWhat I will explain to you today is exactly how you should trade the Forex market and that few traders do. What I am going to tell you has great value. You will hardly find that information in other videos or courses, and surely not for free. It comes from over 25 years of experience in financial markets, even as a fund manager. I tell you immediately that if you are not willing to toil, it’s useless for you continuing to read. I won't give you the magic formula to get rich just by pressing a button. Do you think I have become a professional trader, that is a person who trades for a living, in a day or month? I spent several years to study; I had a hard time (most of all at the beginning). I had to overcome several difficulties before I became the trader I am today. Hard work, in trading like in every field of life, is the basis of success. So, how should you trade the Forex market? First, a mistake most Forex traders make is to consider a currency pair as a single market, a price. But a currency pair is not a stock or commodity. Instead, you have to see a currency pair as two opposing economies. For example, you don’t have to see Eur-Usd as a single market, but as the Eurozone economy versus the American economy. Why should you trade Eur-Usd like Apple or Facebook? On the one hand, you have an individual company, on the other side, two economies. So, get used to considering a currency pair, not as a single market, a price, but as two opposing economies. Now you also understand why most traders who use technical analysis are losers. It’s certainly not an indicator in the overbought or oversold zone that makes a currency pair rise or fall. After having understood this fundamental aspect of the Forex market, the next step is to buy the strength and sell the weakness. But to do that, you have to compare the two economies. First equation : strong economy means strong currency and weak economy means weak currency So, let's see how you should proceed First, for each economy, you need to research the macroeconomic data that make the currency market movements. And this is the simplest thing to do. Several sites show this data in real-time. We can divide the main macroeconomic data into 4 areas: 1) Interest rates. 2) Growth (Gross Domestic Product). 3) Employment. 4) Inflation Then, you have to compare and interpret the data to understand, for both the economies, what the situation is. And this, at least initially, is a little less simple. You have to create two tables, one for each of the economies, and insert the main macroeconomic data. Once you have completed this step, by using the data, you need to compare the two economies to figure out which one is stronger. You can also create a graph with Excel or other software for each data, so as to get a more immediate visual image. For example, if the graph of the unemployment rate in the United Kingdom is falling while that of the United States is moving sideways, even though the American economy remains stronger than the British one, right now it’s the British economy that is strengthening over the American one. Second, you have to read the reports of the central banks, and listening to the speeches (or reading the transcripts) of their Presidents. These are fundamental to understand the monetary policy implemented by each central bank. Also, you find the situation in the country and often a vision of the world economy. Statements and Minutes are therefore essential for understanding the next moves of a central bank concerning interest rates. Second equation : raising interest rates leads to a stronger currency and reducing interest rates leads to a weaker currency The reports, and speeches of central bank Presidents, are essential also because the decisions on interest rates are sometimes known before their release. Which means that a decision has already been priced into the market. It’s probably a process that may be difficult to implement initially, but believe me that, over time, you will be able to analyse a currency pair simply and clearly. Certainly, better than with technical analysis. That was the first pillar of your Forex trading. You have seen how you have to analyse a currency pair. First, you have to see a currency pair not as a market, a price, but as two opposing economies. And then, you have not to use the technical analysis and indicators, but studying and understanding the fundamentals that drive a currency. Now, let's see the second pillar. After analysing a currency pair, you need to select your trade entry. But before… Never forget : in the medium to long-term, it’s the fundamentals that drive a currency pair, but in the short-term, it’s speculation to do it. For this reason, to buy for example Eur-Usd just because your analysis has told you that the currency pair will rise, it’s a bad idea. So, how should you decide when to enter? By using subjective probability. I tell you that no strategy can give you the perfect trade entry. It’s all about probability. Subjective probability is the numeric measure of chance (probability) that reflects the degree of a personal belief in the likelihood of an occurrence. Subjective probability judgments are people's evaluations of the probability of uncertain events or outcomes. It contains no formal calculations and only reflects the subject's opinions and past experience. Now, let's see how to use subjective probability, in trading. Before, an Advice : avoid trading with many markets. Focus only on those you know well. Because it’s essential to know well the currency pair that is being traded, how it behaves and moves, so you can understand what the key levels are. In this way, you will know which are the price levels with the highest odds of success for your trade entry. Let me give you an example with the currency pair EUR-USD. Look at the chart above. You will certainly have noticed how the X.XX20 levels (i.e. 1.0920, 1.1020, 1.1120, 1.1220, etc.) for EUR-USD are often, not always, sensitive price levels. That's just one aspect, a characteristic of EUR-USD. Once you understand how the currency pair moves, when you know it perfectly, you will no longer even need to open the chart to decide your trade. And what about the take profit? First, you need to know when to take your profit before opening the trade (you have to decide it in your trading plan). Then, it has to be a take profit statistically achievable and have a Risk/Reward at least 1:1. To select your take profit, you have to put into the field all your knowledge of that currency pair, and how you did with the trade entry, use subjective probability. This was the second pillar of your Forex trading. You have seen how to select your entry and exit points in trade. You have to use subjective probability, and thanks to your experience and knowledge of a currency pair, choose the trade entry with the higher odds of success. Now let's see the third and final pillar. How to select the stop-loss and cancel the emotions. It is well known that success in trading is determined by our emotionality. You have to put yourself in the best conditions to trade. The problem with the management of emotions is that we are all different. So, it’s impossible to have a system that works for everyone, without distinction. To erase your fears, anxieties, before opening the trade, you have to decide how much you are willing to lose with that trade. Then, you have to set the stop-loss on equity, that is the current value of your trading account, not the price. But where to set the stop-loss? You have to use the Value-at-Risk (VaR). Value-at-Risk measures the potential loss in value of a risky asset or portfolio over a defined period for a given confidence interval. The key elements of Value-at-Risk are: 1. a specified level of loss in value; 2. a fixed time period over which risk is assessed (1 day, 1 week, etc.); 3. a confidence interval (usually 95% or 99%) Let’s see an example. If the Value-at-Risk on Eur-Usd is 1.81% at one-week, 95% confidence level, there is an only a 5% chance that the value of Eur-Usd will drop more than 1.81% over any given week. Unfortunately, here I can't explain the calculation, but you can find it on my Forex e-Book and for free on the internet, in particular on YouTube. At this point, all you have to do is calculate the correct position size to open, based on the maximum loss that you are willing to suffer, and that you must have already decided in your trading plan. That's the way to dispel your doubts about how to set the stop-loss, how to cancel your emotions because using the Value-at-Risk, you are working like an investment bank, a fund manager. This was the third and final pillar of your Forex trading. You have seen how to cancel your emotions thanks to Value-at-Risk. Now you have all the information to become a profitable trader in Forex trading, to trade like an investment bank. You can get significant results in Forex trading, maybe even better than mine, but only if you apply what I explained to you, and you will work hard. Happy trading to you all!
Education
by TradingwDavid
7
Which is better: Arithmetic or Logarithmic scale charts?A market chart has two axes, the x-axis and they-axis. Where the x-axis registers the date, the y-axis registers the price. The y-axis has two methods for plotting it: an arithmetic scale or logarithmic scale. Whichever you chose will have implications for your trading. Arithmetic scale: On an arithmetic scaled chart, the spacing between price levels is equal. If price rises, like from 1000.20 to 1500.20 and 1780.20 to 1980.20 for gold, the grid spacing on the chart does not change. This is a gold chart illustrating arithmetic scaled chart. Logarithmic scale: The log chart is scaled based on percent moves. A hundred percent move or change in prices will have a larger space than a fifty percent move or change in prices because the spacing reflects differences in percentages. The same gold chart illustrating a logarithmic scale. The differences in both scales are not readily noticeable when charts are plotted on short periods of time because price fluctuations are relatively subdued. However, you begin to notice considerable differences with large price fluctuations. Because my trading is in the short term, I use the arithmetic scale. But position traders who deal on the longer term would consider using both arithmetic and logarithmic charts for their trading. That way they see both the price level moves as well as how that scales in percentage terms.
FOREXCOM:XAUUSDEducation
by Emekadavid
Classification of trendsIn an earlier note, we defined a trend as a period in which price moves in an irregular but persistent direction. It could also be a time measurement of the direction in price levels. The three common classifications of trends are: primary, intermediate and short-term trends. Primary trends: This trend revolves around the business cycle which lasts for 3.6 years from one bottom to the next bottom or from one top to the next top. Bull and bear trends respectively last for 1 to 2 years, though the magnitude and duration may be significantly different at various times. Reversal price patterns in primary trends usually take longer than three months to complete. You can find primary trends on the higher time frames like the monthly time frame. This is a EURUSD chart on the monthly time frame of a bull trend illustrating how long a primary trend on the bull side or bear side can last. Intermediate trends: When primary uptrends and downtrends are interrupted by countercyclical corrections along the way, they give rise to intermediate trends. These last from 6 weeks to 9 months, and could last even longer, or could even be shorter than 6 weeks in some occasions. Reversal price patterns in intermediate trends could take from 3 to 6 weeks to form and its duration depends on the duration and magnitude of the intermediate trend preceding it. Intermediate trends are usually found on the weekly time frame. Short-term trends: These trends are countercyclical corrections in intermediate trends, and sometimes they align with the intermediate trend. They typically last 3 to 4 weeks and could sometimes be shorter or longer. They are usually influenced by random news events and could be difficult to identify. Price patterns in short-term trends can take 1 to 2 weeks to develop. These trends can be spotted on the weekly, daily, and 4 hours time frames. Below is a EURUSD chart showing countercyclical trends on the daily when compared to the intermediate trend, the weekly, which was in a downtrend. Next we will discuss how understanding trends and their categories has consequences on understanding how price patterns will probably turn out.
Education
by Emekadavid
ASIAN SESSION 15M GBP PAIRS ROUND NUMBERS SCALPING STRATEGYDuring Asian Tokyo Session trade: GBPUSD, GBPAUD, GBPJPY, GBPNZD. Trading Time Zone: 1 hr before to 1 hr after Tokyo Session. Trade 15m chart. Add a "00" & "50" numbers indicator to chart or add them to your chart. As the new trading day starts, watch how price reacts to those price levels. This pair price came bullish, had a bearish pullback and then a short bullish continuation. That allowed you to enter a bearish sell stop @ 2.0600 in the 1 hour before Tokyo Session. Your bearish take profit is @ 2.0550 so enter a take profit order. Make a hedging Buy Stop order @ 2.0550 or on a second account enter this order. Your bullish take profit is @ 2.0600. Enter a tight 10 pip SL.
Education
by Tradingstrategyguides
Forex EURUSD vs Futures 6E ShortWithout getting too technical on lot sizes for forex and contract sizes for futures contracts. The fact remains that the Forex EURUSD pair and be traded with the futures 6E contract. I personally trade futures rather than forex as I can trade either the Futures Emini contract 6E. Or, if the risk is too large between entry and stop using our Roller Coaster Indicator suite, I can switch to the micro contracts which are only 1/10th the value of the normal 6E. This versatility allows me to get in more currency trades, than if I were just trading the Forex EURUSD pair. This chart is an example of our Roller Coaster Indicator Suite for the trading view platform with the 6E contract on the right chart and EURUSD on the left chart. Both 15 minute charts! As you can see the behaviour is very similar. Concentrating on the right hand chart, the 6E contract, the Stop is approx 1.08500 and Short Entry 1.08200. So for the main 6E futures contracts that is 60 ticks Risk and at $6.25 per tick, that's a Risk of $375 for 1 contract Now for the Micro contract, that's only 30 ticks Risk and at $1.3 per tick, that's a Risk of $39 for 1 contract. ( Micro 6E contracts do not have the half point values like the main 6E contract). So if $375 is too much Risk, then maybe 3 micro contracts, giving a Risk of $117 would be more suitable for traders. This is just an example of how versatile futures trading can be for currencies, instead of just trading Forex. Our Roller Coaster Indicator Suite is very powerful, but sometimes the risk seems a little high when traditional Forex trading and this alternative, using futures emin and micro contracts, should be worth exploring for serious traders. This particular trade was a 1:2 winner and I traded 5 Micro Contracts, Risk $195 for a profit of $390, Which isn't bad for 3 hours in the trade. Yes I could have won twice that with 1 normal emini 6E contract, but the Risk was too high for me as I had 2 other trades on at the same time with Gold and one of the indexes. I wrote an article on our blog, back in February, discussing the Roller Coaster strategy , Getting in the Groove and Risk management, you may find interesting.
CME:6E1!Education
by xBratSoftwareSolutions
10
Support/Resistance Long StrategyChart TF: 4H Indicators: 14 EMA, 40 EMA, Vortex Indicator 30, RSI 22, TRIX 10 I have been tweaking this simple, yet profitable, system for a few weeks and wanted to share it with the public to receive feedback/opinions. This post will go over the long entry conditions, look at my profile for the short conditions (they are simply flipped). Long Conditions: 1) 14 EMA > 40 EMA. 2) A bullish candle must break above a resistance level. 3) The price must be above both EMAs. 4) VI(+) > VI(-) by at least .15 5) RSI > 50 6) TRIX > 0 If all conditions are met, enter long. Stop Loss: 1) Set SL to the closest support. Take Profit: 1) Set TP 1:1 R/R with the stop loss. In this recent 21 day stretch, 02/26/20 - 03/18/20, this strategy gave 6 successful long entries and over 500 pips on EURGBP.
Education
by tdyk98
Support/Resistance Short StrategyChart TF: 4H Indicators: 14 EMA, 40 EMA, Vortex Indicator 30, RSI 22, TRIX 10 I have been tweaking this simple, yet profitable, system for a few weeks and wanted to share it with the public to receive feedback/opinions. Short Entry Conditions: 1) 40 EMA > 14 EMA. 2) A bearish candle must break below a support level. 3) The price must be under both EMAs. 4) VI(-) > VI(+) by at least .15 5) RSI < 50 6) TRIX < 0 If all conditions are met, enter short. Stop Loss: 1) Set SL to the closest resistance. Take Profit: 1) Set TP 1:1 R/R with the stop loss. In this recent 28 day stretch, 02/19/20 - 03/18/20, this strategy gave 5 successful short entries and over 300 pips on NZDCHF.
Education
by tdyk98
GBPUSD 1D WOLFE WAVE STRATEGYWhen trading the best wolfe strategy you will find that after the entry is triggered your position should show you an immediate profit. This is because the reversal pattern that emerges from the wolfe wave chart pattern is very violent. Once we’ve got the first five waves we have the general setup of the wolf wave . After the last wave has broken above the ascending wedge channel it’s the time to get ready for some action. Step #1: Prior to the Bearish Wolfe Wave Formation look to have a clear Bullish Trend . Firstly, before the first wave to develop we need to have a clear trend that needs to be reversed. For high probability trades, we want to see a prior bullrish trend before the bearish wolfe wave develops. This step is quite essential if you want to correctly trade the wolfe pattern. Now that we’ve identified a trend, it's time to apply the wolfe wave rules to the price chart. This brings us to the next step of our reversal strategy. Step #2: Try finding a 5 wave move that can be contained in a channel. The last wave 5 must break above the wedge channel. A valid wolfe wave is composed of 5 waves that follow some simple rules. However, the most important rules are that wave 2 and 4 must be contained within the channel created by Wave 1 and Wave 2. Secondly, wave 5 breaks above the trendline created by wave 1 and wave 3. Step #3: Sell after we break above and then a candle close back inside the Wedge Price Channel . At the moment when the price enters and closes back into the price channel , we want to enter a short position. We like to wait for the close inside in order to eliminate possible fake breakouts. Note*: If we don’t get a close back into the wedge price channel we don’t have a valid trade signal. Another sign to look for is how quickly it goes back into the channel. We prefer to only trade the wolfe patterns that retrace very quickly back into the range. This is a sign that a smart money reversal is at work. Remember, in trading, you only want to trade the high probability trade setups. Step #4: Draw a trendline that connects the wave 1 high and wave 4 low and extend it in the future. Take profit when the EPA line is hit or candle close below it.. The line that connects the wave 1 high and wave 4 low is called the wolfe wave EPA line. The EPA line stands for Estimated Price at Arrival and it’s an effective take profit strategy. The EPA line main purpose is to show at what price the market will extend after it reversed the previous trend. Note*: If the EPA line is too steep, often time it means that the price will never reach it. In this case, you want to take profits early. Step #5: Hide Protective Stop Loss above Wave 5. The protective stop loss can be located above the last wave or wave 5. This strategy gives us a very tight stop loss which is good for our risk management strategy. Obviously that a break above wave 5 means we also break first above the channel and this will invalidate the validity of the wolfe wave chart pattern. Note** the above was an example of a SELL trade using the best wolfe wave strategy. Use the same rules for a BUY trade. Conclusion - Best Wolfe Wave Strategy The wolfe wave strategy is a trading strategy built around waves the same like Elliott Wave trading. We use other trading concepts like channeling and price symmetry to find the best possible trade signals. If the trade works in our favor then we have a really good chance to have a good trade in terms of risk to reward ratio. With trading experience, it will become much easier to spot the wolfe wave patterns.
Education
by Tradingstrategyguides
The power of supply and demand imbalancesIt never ceases to amaze me how powerful bigger timeframe imbalances are and how price can react to them no matter how old these imbalances are. There is a clear example of a very strong supply imbalance on the British Pound versus New Zealand Dollar (GBPNZD) Forex cross pair. There is a very strong monthly supply imbalance created around 2.09 price level last May 2016. It took 44 months for price to retrace to it, that’s quite a lot of time. This is the type of imbalance you don’t want to trade against. These imbalances are not support and resistance, supply and demand imbalances have nothing to do with support and resistance even though some times imbalances contain classic support and resistance prive levels used by so many traders. Take a look at GBPNZD Forex cross pair monthly timeframe supply and demand technical analysis below. If you are trading intraday or even scalping Forex cross pairs, you will be losing all of your trades since you won’t be aware of the strength of the imbalance that took control. Taking a look at the bigger timeframe imbalances will add extra context to Forex trading strategy and will keep you alerted of such strong imbalances that could cause havoc in your trading account. Trading intraday and scalping Forex is fine for those doing it, there is no doubt that trading lower timeframes can be profitable, but we highly recommend you to keep track of strong imbalances on the bigger timeframes because if you do, you will be avoiding many losses. If you were long biased on GBP/NZD Forex cross and you had some losses, now you know why you had those losses.
Education
by AlfonsoMoreno