Simple 1-2-3 swings
And here we are again talking about the strategy that withstood the test of time. This Forex trading method is based on the same study of defining support and resistance levels and trading upon the fact of their violation.
A trading setup requires only an open chart and no restrictions for the currency or timing preferences.
Entry rules: Once the price makes it through the “pivot Line” - dotted white line on the figure below (drawn using the latest price peak) - and closes above (for uptrend) or below (for downtrend) the line buy/sell accordingly.
Exit rules: not set. However, exit can be found using Fibonacci method; or traders can measure the distance between point 2 and point 3 and project it on the chart for exit.
Additions: as an additional tool traders can use MACD (12, 26, 9). The rules for entry then will be next - let’s take a SELL order:
When MACD lines cross downwards, you look for 1-2-3 set-up to form. When the price starts “attacking” the “pivot Line” you check that MACD is still in SELL mode (two lines are heading down). Once the price closes below the “pivot Line” – place Sell order.
Same chart: MACD (12, 26, 9) is added.
Hi fellow swing traders, here is a swing trading system which you can use to trade the GBPUSD currency pair. This swing trading strategy has the potential to average more than 100 pips a month. You just have to manage your risks and it can be a real killer forex swing trading system for you. Ok, enough of trash talk, lets get started with a bit more detail into the GBPUSD forex swing trading strategy. OVERVIEW OF THE 4HR GBPUSD FOREX TRADING STRATEGY (1)With this forex swing trading system, you need to use the 4hr chart as well as the daily chart to make a trading decision. Your trade entries are made in the 4hrs but you need to check the daily timeframe for what the main trend is before you enter a trade on the 4hr timeframe. (2) You also need to have these forex indicators,: slow stochastic with the settings(13,5,5) applied to both charts, EMA 4, EMA14, and EMA 50 on the 4hr chart. TRADING RULES (1) On the 4hr chart, open a trade at market order or with a pending stop order on the new opening candlestick when 4ema first crosses 50Ema followed by 14Ema (2)Your stop loss should be 50 pips. (3)Exit the trade when 4EMA reverses and crossed 14EMA on the next open candle. (5)Last but not the least, you need a good filter to filter out potential bad trade setups with this swing trading system. Here’s what you need:the stochastic indicator on the daily chart: For Valid Long Entry: Slow %K above Slow %D on the Daily Chart For Valid Short Entry: Slow %D above Slow %K on the Daily Chart Note: the %K&%D on the stochastics are the two line on the stochastic indicator chat that cross each other based on where price is going. The reason why you need to use the stochastic on the daily chart is pretty simple:follow the trend. The daily chart has more importance than the 4hr chart. (6) Take profit: there is not take profit option here(dummy!) because you need to refer to rule (3)! Now if you are still confused, these two charts below will make things a bit more easier for you to understand. Click on the charts if you need to see it more clearly. Now as trade filter, swith to daily chart to see if the two stochastics lines have crossed to the downside to confirm the overall direction of the trend(in this case, its a downtrend): ADVANTAGES OF THE 4HR GBPUSD FOREX TRADING STRATEGY allows you to actually get into a trade just after the moving average crossovers happens, which means you are potentially entering a trade just after the trend has started…which is better than entering a trade at the halfway point of a trendy market move. which means if its going to be a nice trending market, you stand to make a lot of profitable pips and the fact that you are only supposed to close the trade when 4ema crosses the 14 and if that’s in a nice trending market on a 4hr chart, that could mean hundreds of pips of profit you can make. the use of daily timeframe withe the stochastic line crossover allows you to enter trade based only in the current prevailing trend direction thus increasing your odds of success. DISADVANTAGES OF THE 4HR GBPUSD FOREX TRADING STRATEGY The biggest problem I see with this trading system is the entry because moving averages are lagging indicators therefore the ideal entry point would have been anywhere from 2-7 candles back. this also means that at the entry where you got into a trade, price may be due for a temporary pullback and if your stop loss is not wide enough, you will get stopped out. This forex strategy is definitely not good for ranging market, expect your stop losses to get hit frequently. CAN YOU USE THIS FOREX TRADING STRATEGY WITH OTHER CURRENCY PAIRS? The short answer is yes. Better for you to stay with currency pairs that have good trending characteristics.
Profit making in trading is a function of the market matching your methodology. We trade with a philosophy and we profit when it correlates with the current market environment. We make money when our winning percentage is high and our losses are kept small, or when or wins are big and are losses are small. If we have the discipline to follow a system consistently and manage our risk, then the profits will come when the market is conducive to our method. Until then it is our job to keep our losses and drawdowns under control. 1.Day traders have trouble making money in markets that lack intra-day volatility. 2.Trend followers can’t make money when markets don’t trend in one direction for any length of time. 3.Momentum traders lose money when stocks fail to breakout over resistance and trend. 4.Traders that use chart patterns don’t make money when trend line breaks don’t lead to sustained trends. 5.Swing traders don’t make money when support levels fail and stop losses are hit before a reversal. 6.Dip buyers don’t make money when downtrends begin and lows get lower. 7.Option trades lose money when markets fail to trend before the option expires. 8.Option sellers lose money when parabolic moves put the sold options in the money. 10.Investors lose money in bear markets. 10.Perma-bears lose money in bull markets.
1. Never trade so big that you end up watching every price tick even though you are not a day trader 2. Don’t trade so big you dramatically increase your pulse rate or get the sweats. 3. Each trade should only be one of your next one hundred. Never risk more than 1% of your trading account on one trade based on your stop loss. 4. Don’t spend time obsessing over market hindsight. All you can focus on is following your plan in real-time. 5. Forget about your last trade and focus on your next trade. 6. Losses should be lessons that you paid to learn. Look at drawdowns in capital as tuition and not failure. 7. If you followed your trading plan, your loss is just part of the process to get to profitability. Think long term. 8. Position sizes can’t be so large that they compromise your emotions and distract you from your trading plan. 9. Don’t revenge trade to attempt to recover your losses. Stick to your trading plan no matter what. 10. Your signals have to be based on price action and not greed, fear, or your ego.