Today we will be looking at two trading strategies – one is the Eur/Usd that I would like to discuss and the other is by one of my active readers, Patrick who has contributed to the blog quite a lot so thanks Patrick for helping so much.
First we will discuss Patrick trade strategy that he kindly shared with us:
Hey fellow traders. I think the hardest part of trading is actually pulling the trigger whether to get in or out of a trade. I start with a very simple setup, bollinger bands, pivot points and Fibonacci. Identify your support and resistance, trading range if there is one, and the trend. I enter/exit a trade on the 5 min chart at a support or resistance level. Look at the daily, weekly and monthly charts for key levels of support and resistance or even fib. Now if all the ducks are lined up, then go for it. If you second guess yourself, then you are toast.
To help out I included a great blog that gives pivot points that you can find to help get us started with that. Get your pivot points here.
Patrick also Wrote:
I like using Fibonacci retracements and pivot points as price targets. You can back test the fib on EUR/USD chart to see how that pair behaves on the 30min or 5 min depending on how you trade. I tend to get very good results bouncing off 38.2% and 61.8%. Previous support and resistance levels are good targets too. If the market opens above the day’s pivot point, then I look to go long and short if it opens below. My stops are a function of the range of the band if there is one. I dont have a specific number that I set as a stop. Sometimes I am out of a position 10 pips against me or 50 pips, so it depends on the position and how the market is moving. If I leave a position over night, then I’ll set at 50 pips stop. Most times I wake up to a nice profit. I only trade the EUR/USD. I think once you get to know a pair, that’s all you need. I trade the London and NY times. I find those times move the EUR/USD the most.
Maybe we can ask Patrick some questions through out the week and see if he can help us fine tune the strategy a bit. Thanks again Patrick
Eur/Usd Trade Setup:
First we must be aware of any fundamental data that will be important this week. For that information I always read Forex Crunch weekly outlook.
Next, I want to discuss a candle pattern on the Eur/Usd Chart today. There is a doji candlestick on the Daily chart which indicates indecision or in this case a possible pullback. If the next daily candle is down we should look to enter short. I will be watch the Sunday or Monday candle to see if there is a pull back coming.
Now there was such a strong uptrend last week that we may see that continue so we do not want to enter short until we see the next confirmation candle. The next candle must be down.
Watch the below video to get an idea of what I am talking about:
So the idea is enter short if we get a downward candle. We will put our stop just over the resistance level and we will be looking for a profit target near the most recent support level or the diagonal trend line I drew on the chart.
I will begin posting my trading log on this site so that we can all follow along with the trades. In addition I will be posting trading information via twitter so you will want to follow me there as well.
Thanks and if you have any questions comments or ideas please do not hesitate to post as your input is valuable.
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