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Quote from Smurfie:
Hey Forexgreenland
All trends from the monthly to the 5m timeframe are down. Why do you see an up-gap coming?
In other words, on what do you base your decision?
Cheers,
Smurf
Answers to the Exercises on the education board....
FX Open Position Ratios
Currency: EUR/USD (preferred) or any other.
Time frame: 30 min.
Indicators: MACD (5, 26, 1) – draw 0 line,
Full Stochastic (14, 3, 3)
EMA 3
SMA 13
Trading rules: watch for divergence between the price on the chart and MACD or between price on the chart and Stochastic.
Once divergence spotted, wait for EMA 3 and SMA 13 to cross and enter the trade in the direction of EMA 3.
Set stop loss at 26 pips.
Take half of the profit at 20 pips; let the rest to run further with trailing stop in place.
Divergence on Stochastic can be found the same way as on MACD. The reason for using both MACD and Stochastic is that one of the indicators can show divergence while the other will not at given period of time.
Current strategy has won the hearts of many Forex traders. And why not when it has a great winning potential.
Strategy requirements/setup:
Time frame: daily
Currency pair: any
Trading setup: SMA 150,
RSI (3) with horizontal lines at 80 and 20,
Full Stochastic (6, 3, 3) with horizontal lines at 70 and 30.
Trading rules:
Entry for uptrend: when the price is above 150 SMA look for RSI to plunge below 20. Then look at Stochastic - once the Stochastic lines crossover occur and it is (must be) below 30 - enter Long with a new price bar.
If at least one of the conditions is not met - stay out.
Opposite for downtrend: when the price is below 150 SMA wait for the RSI to go above 80. Then if shortly after you see a Stochastic lines crossover above 70 - enter Short.
Protective stop is placed at the moment of entry and is adjusted to the most recent swing high/low.
Profits are going to be taken next way:
Option 1 - using Stochastic - with the first Stochastic lines cross above 70 (for uptrend) / below 30 (for downtrend).
Option 2 - using a trailing stop - for an uptrend a trailing stop is activated for the first time when Stochastic reaches 70. A trailing stop is placed below the previous bar's lowest price and is moved with each new price bar.
This strategy allows to accurately pin-point good entries with sound money management - risks/protective stops are very tight and potential profits are high.
Current trading strategy can be improved when it comes to defining the best exits. For example, once in trade traders may also try applying Fibonacci studying to the most recent swings. This way they can predict short-term retracements and make sure they will not be pulled out of the trade early and will continue pursuing profit targets at Fibonacci extension levels.
CURRENCY PAIR - GBP/JPY
4 CANDLES STRATEGY
- Draw horizontal lines on the highiest high and the lowest low of the first Four candles of the day.
- Trade the Valid Breakout of the eigther lines.
- Check Stochastic Slow on 4hours Time frame.
- Trade the direction of the 4hours stoch with higher quantity
- Trade direction against 4hours Stoch with lesser Quantity
- Target the first 50-100pips
- Your stop loss should be the other side of the tunnel
- If your stop loss is hit, set the pending order again.
- Close all pending orders by 5 hours to close of the day.
Use time frame and currency which respond the best (1 hour, 1 day… or any other).
Indicators: (multiple of 7) 7 SMA, 14 SMA, 21 SMA.
Entry rules: When 7 SMA goes through 14 and continues through 21, BUY/SELL in the direction of 7 SMA once price gets through 21 SMA.
Exit rules: exit when 7 SMA goes back and touches 21 SMA.
Advantages: again it is an easy set up and does not require any calculations or other studies. Can produce very good results during strong market moves, the system also can be easily programmed and traded automatically.
Disadvantages: System requires periodical monitoring according to a chosen time frame. SMA indicator signal can be confirmed after the current price bar has been fully formed and closed. In other words, when SMA stops changing and the signal is fixed, traders may rely on such information to open a trade.
Time frame chart: 1 hour or 15 minutes chart.
Indicators: 10 EMA, 25 EMA, 50 EMA.
Entry rules: When 10 EMA goes through 25 EMA and continues through 50 EMA, BUY/SELL in the direction of 10 EMA once it clearly makes it through 50 EMA. (Just wait for the current price bar to close on the opposite site of 50 EMA. This waiting helps to avoid false signals).
Exit rules: option1: exit when 10 EMA crosses 25 EMA again.
option2: exit when 10 EMA returns and touches 50 EMA (again it is suggested to wait until the current price bar after so called “touch” has been closed on the opposite side of 50 EMA).
Advantages: it is easy to use, and it gives very good results when the market is trending, during big price break-outs and big price moves.
Disadvantages: Fast moving average indicator is a follow-up indicator or it is also called lagging indicator, which means it does not predict the future market directions, but rather reflects current situation on the market. This characteristic makes it vulnerable. First, because it can change its signals any time, second – you need to watch it all the time, third - when market trades sideways (does not trending) with very little fluctuation in price it can give many false signals, so it is not suggested to use it during such period.
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Forex Trading Strategies created to post and discuss trading strategies of all kinds, from the benign ultra secure- if there is one in Forex- To the craziest most risk laden.
This board is another extension of the Hub which includes ,
Forex Traders #board-5125
Forex Education #board-11631
Forex News Traders #board-11629
Forex Technical Review #board-11630
This Board is open for all interested in the Forex Market..
Please helps others by posting your favorite strategies.
Trading is a speculative endeavor that requires proper training and education, and should include strong discipline, risk management and money management skills. Just like in any market, the forces of supply and demand are at play. The emotional elements of greed and fear cannot be escaped. Have a plan that focuses on proper money and risk management techniques. Use stops to protect your money and minimize losses.
Make money in both directions, up or down. Unlike the equity market, there is no “uptick rule” that limits a trader’s ability to sell short. Short positions can easily be entered by hitting the bid and are part of most speculative trading strategies. There is equal opportunity to profit in up and down markets.
There are several basic approaches that traders take, either fundamental or technical analysis, or a combination. When using fundamental analysis a trader is going to look at issues that are fundamental to the value of a currency including the state of the economy, especially interest rates and inflation, the balance of trade (balance of international payments for goods and services), and political factors.
Technical analysis, on the other hand, is concerned with the forces of supply and demand and the behavior of price over time of a particular currency pair. The tools of technical analysis are price charts and technical indicators (or studies). Price patterns have a tendency to repeat themselves. A knowledgeable technical trader can utilize pattern recognition to increase the probability of success and tighten risk management strategies. Technical analysis is also used by traders to develop trading systems that automatically look for a combination of technical factors to be in place before giving a trade signal. Since most of currency trades are short-term (less than 7 days)
How to post a chart on Ihub
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http://www.theforexclub.us/Website%20books/Fibonacci%20Secrets.pdf ...............................................................................................................
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