GBPAUD Long example of how I tradeWhen looking for trades, my purpose is simple:
I look for High probability trades with good RRR (risk reward ratio)
I consider a trade high probability if it has an 80%, or better, historical success rate.
A good RRR (risk reward ratio) is 3-1 or better. meaning that we are risking $1 to make at least $3
Understand that by maintain a 3-1 RRR, even if I lose over 50% of the time, I will still make money. Combine that with High probability trades and your golden.
That said, there are not a lot of trade opportunities that met this criteria everyday. So I am not the guy who is going to post alot of trades, most days I only take 1 trade. I risk 2% per trade,( because I have earned that right which is a different conversation), to make 6%. Generally, I will net 15-20% per week.
I start with a strength and weakness anylasis from the prior day's trading and rank the currencies
numerically. for example today "S GBP 5" means that GBP was ranked 5th while "W AUD 7" Aud was ranked 7th
obviously GBP was stronger than Aud. So we start the day with a Buy bias. this is confirmed before I start trading, which is generally at the European open (currently 2am est).
I then look at multi-frame analysis using Ichimoku Kinko Hyo concepts. Primarily the Kejun-Sen (KS). I look at the Daily the 60 and the 15 min Tf's.
Ideally, price will be above/below the KS on all 3 tf's, but the Daily as in this example is not necessary. Moreover, we need price above/below the Ichimoku Cloud.
Next is the Asian box, if the market has consolidated during the Asian session, as it often does, I will mark the high and low, creating a box. In the example above, we have the 60 KS (blue line), which is above the cloud at 1.82119. that is the bottom of the box as it is a place that found support during the Asian session. The Daily Senkou B, in this case provides the top of the box. Generally, the Daily Senkou's A and B, provide solid resistance or support.
Putting it all together, in the above example, since price is above the 60 Ks, the 15 Ks and the cloud in the conformity with our directional bias, we have a Type 1 trade, which has an 87% success rate. these trades are Great!!!
We have 2 potential buy entry points:
1st is a pullback to the bottom of the box at he 60 KS
the 2nd is a breakout trade. However because in this example we are using the Daily Senkou B as the top of the box we need a close above it, not just penetration.
As you can see the 2:45 candle closes above the Senkou B and we can enter a long trade. Using a 20 pip stop and a 60 pip profit target. This hits perfectly (what a great example) but seriously you can look back at my other trade idea's and see similar results .
I hope this provides a general idea of what I am trying to do tradewise. feel free to hit me with any questions
AGold 54
