A Personal Trading Strategy
by Richard Krivo
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While I occasionally trade from the Daily chart, primarily I use it to determine the trend of the pair.
Once I have identified the pair that I feel has the strongest trend based on the Daily chart, I will usually enter on a 4 hour or 1 hour chart. whichever time frame best optimizes my entry. Here's what I am looking for chart by chart .
The Daily Chart:
The Daily Trend on the NZDJPY is down . This determination is made based on the pair making lower highs and lower lows, price action is below the 200 SMA and pulling away from it and, at the time of the analysis, the NZD was the weakest currency and the JPY was the strongest . Also, looking at Slow Stochastics , I see that it is below 20 which is a very bearish sign.
Given all of th e above , I know I will only be looking for opportunities to sell the pair as they will have the greater likelihood of success. (Trading in the direction of the longer term trend offers us that edge.)
The 4 Hour Chart:
Then I will look to the 4 hour chart and look for a retracement (a move against the Daily trend) to be finishing and beginning a new move to the downside . In other words, a fresh move back in the direction of the Daily trend. Sometimes that fresh move will prese nt itself straightaway or I may have to wait for the set up to occur.
In the case of this particular 4 hour chart I would need to wait for the pair to cycle back up as a new move to the downside has already taken place over the last five red candles on the far right of the chart.
I will also run through this same process on the one hour chart looking for the same set up. Once a ď fresh move Ē begins on either the 4 hour or the 1 hour chart , an entry can be made with a stop placed above the highest level of the recent retracement. (Stochastics, MACD or RSI can be used to further time the entry.)
The 1 Hour Chart:
In the case of this 1 hour chart, I would be waiting for a pullback/retracement to take place to short the pair.
Since the pair has been in a strong, on-going downtrend on the Daily chart, I would have been able to successfully sell the pair at any of the points on the chart after the retracement (black arrows) takes place. The short position would be opened when momentum shifts back to the downside (Stochastics crossover within the black circles). In each instance the stop would go above the most recent high approximately at the black lines. Sidebar: Some traders will become frustrated when they see price is moving opposite the direction of the Daily trend. Donít worry about it. It is fine since that means a retracement is taking place and once that is complete, we will be looking at an opportunity to enter the trade in our direction of choice. the direction of the Daily trend.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
1 hour forex strategy
There is a common wisdom that all traders will sooner or later come to the conclusion that the optimal timeframe for online trading is one day and more. However, it is difficult to say is it true or not, because basically the difference between timeframes is determined rather by the size of the deposit and the free time which trader has. There is, of course, the presence of the so-called "noise" movements at the less than one day intervals, but fractal analysis settles this problem as well by applying mathematical calculation for all hardly predictable price movements. Nevertheless, Forex trading systems in the interval less than a day make not a daily profit for many traders only, but also the perfect combination of energy spent and the income which was made.
I would like to show you an example of a simple trading strategy which uses two indicators only. This is a simple one hour Forex strategy.
The graph shows the principle of work with the EUR / USD pair on the hourly time interval. Two indicators are used here. The first one is the Relative Strength Index with a parameter 13, and the second one is a simple moving with a parameter 13 and the shift by three candles. The principle is simple. The most important here is not wait the moment when the RSI shows overbought or oversold levels. Only after this indicator signal you can expect moving signal. This signal indicates a situation when a simple moving average meets the price graph from the bottom with the upward movement and from the top in a downward motion of the price graph. Stop-losses can be placed according to the wish of the trader, but within the last minimum or maximum. This one hour Forex strategy is distinctive because of the fact that, in parallel with standard signals, it often shows divergence - convergence signals.
You can add another indicator to this chart, it is better to say another moving. If you add MA with parameters 21 and shift 5 to this chart you will get the opportunity for long orders. Furthermore, this one hour forex strategy gives us another signal that is an intersection of two moving averages, and it provides us with an opportunity to weed out the wrong signal for the closing order. So, the order is closed not when the price graph meets the MA13, but when the price graph crosses the MA21.
However, we should note the nuance of this trading strategy that is a large number of false alarms. To do this, you just need to adjust the parameters of the basic indicator of the trading strategy. The picture shows the Relative Strength Index with the parameter 13. If you set, letís say, the parameter 21, then the number of indicatorsí signals will be reduced significantly, but at the same time the false signals will be reduced as well. In general , the trader decides which parameters to use.
Another one hour forex strategy is described further. It is based on a single indicator, which is called Bollinger Bands, or Bollinger Band line. This indicator allows you to work in a sideways motion, and in long positions as well. However, due to its interpretation and changes in the parameters, the Bollinger Bands indicator remains the difficult one for many traders. But here we will explain its signals in a simple way.
So, the parameters are: a period 20, shift 3.
The rebound from the top and from the bottom line of Bollinger Band is a signal for the orders opening. Thus, the trade is conducted within the channel of price movement. The middle line is used as a simple moving and defines the main trend direction. Furthermore, two significant signal should be noted. The first one is when the price does beyond the upper or lower Bollinger Bands. This situation indicates that the movement will continue. The second signal is a strong narrowing of the canal. The example is shown on the picture below.
In this case, you should pay attention to the situation when the middle line meets the price graph, because it is a strong signal for opening of the order. Thus, using the one hour interval on the Bollinger Bands line you can achieve the high accuracy of the price trend forecast.
To draw a conclusion, we can say that the one hour Forex strategy can be made on the basis of almost any indicator, and the combination of any of them can be applied. The most important rule here is a strict adherence to the established strategy, regardless of its components. Source: Dewinforex
1 Hour Forex Strategy That Is Set & Forget
This is a 1 hour forex strategy that is set and forget. We have combined forex with binary options in this 1 hour forex strategy. So letís discuss this strategy in detail. Take a look at the M15 chart below of GBPUSD.
Did you see a pattern on the above screenshot that is repeating again and again? Look above or below each red arrow in the above screenshot and you will find a special pattern. Did you see whenever a bullish candle is followed by a bearish candle, the next 2 candles are bearish. In the same manner whenever a bearish candle is followed by a bullish candle the next 2 candles are bullish. So whenever you spot this pattern in which a bullish candle is followed by a bearish candle, you can buy a put option with expiry 30 minutes. In the same manner whenever you find a bearish candle followed by a bullish candle, you can buy a call option with expiry 30 minutes. Now take a look at this 15 minute chart of EURUSD below.
In the above screenshot, you can once again find this pattern repeating again and again. Whenever a bullish candle is followed by a bearish candle, the next 2 candles are bearish and in the same manner whenever a bearish candle is followed by a bullish candle, you will find the next 2 candles bullish. So when you find a bullish candle followed by a bearish candle, buy a put option with expiry 30 minutes and in the same manner when you find a bearish candle followed by a bullish candle, buy a call option with expiry 30 minutes.
Important question? Does this pattern work on M30? This pattern works very well on M15 but not that well on M30. You can check it. Once you enter into a 30 minute trade, it is set and forget. Either you win or you lose. So you can enter 5-10 trades in a short span on 60 minutes with this strategy and then enjoy the rest of the day. Practice this strategy on the demo account first. If you lose one trade, donít try to double up and use martingale. Just make the next 2 trades with care and you will recover the loss.
Donít risk more than 2% of the account equity on the single trade. If you have $100 in your account, it means you should open the trade with $2 only. You will get a return of $3.50. So your profit will be $1.50. You only need to make 5 trades daily to make a return of 7% which should be sufficient for you. If you make 10 trades daily, you can make a return of 15% daily with this strategy. This is what you can do. You can trade for 1 hour in the morning and make 5 trades. In the night you can again trade for one hour and make another 5 trades and you are all set to make a return of above 10% daily with this simple 1 hour strategy.
Unlike a forex strategy where you have to take care of the profit target also, in this strategy you just need to make the entry right and rest is all set and forget.