10 min to 15 min (works best) RSI Stoch Strategy
Forum What is Forex? A- You should define the maximum percentage of your capital you are ready to risk to open a position. To enter a position the close of the bar should be the lowest under the support. Live, interactive sessions Develop your trading knowledge with our expert-led webinars and in-person seminars on a huge range of topics. Below you will see the trend chart with the 2 Moving Averages added.
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The key is to be relaxed, and feel your way to success; much like short-term trading. The reason these short-term charts can often be puzzling is because we are looking at so little information as compared to the longer-term charts, such as 1 day, or 1 week. To do this, I use 2 Exponential Moving Averages: The 8, and the 34 period EMA.
Below you will see the trend chart with the 2 Moving Averages added. Many traders using 2 moving averages will look to trade crossovers.
So I instead focus on stronger elements to constitute a trend; and I want to focus my efforts to the strongest portions of these trends. I will do this by noticing the location of the moving averages; and looking for price agreement before moving on to place entries. The chart below will illustrate this concept. The chart below will illustrate further: Once this criterion is met, I feel comfortable enough to move down to the short-term chart to enter into the trade. When the trend-side momentum comes back in the pair — I will look to enter my trade.
Traders can handle these situations through lot sizing. For instance, I can take a stance of looking to enter up to 5 positions. So, for each of the first 5 crosses of the 8 period EMA, I continue to add to my lot.
Or perhaps, I can look to only take the first, place my stop, and wait for the trade to either move in my direction or hit my stop. In the case of short positions, we are looking for exactly the opposite occurrence than we had looked at a moment ago. Each time price crosses below the 8 period EMA, I have another opportunity to open up a short position. If you notice the right side of the above chart, you may see that price begins to find support on the 8 period moving average — indicating that we may have a reversal of trend; and that brings us to one of the most beneficial parts of the Finger-Trap trading strategy: If we are placing trades on the 5 minute chart, and looking to only take part in strong moves in the direction of the trend we had identified on the hourly chart; we have quite a bit of flexibility in how we want to consider risk.
In the article Price Action Swings , we had identified a mannerism of capping risk when trading trends. When placing a long trade, I want to ensure that price remains supported for the duration of my trade.
If short-term support is broken, I run the risk of the pair continuing to move against me, further draining my account. To a scalper, this can be extremely dangerous as fast markets can exhaust an account balance very quickly. Once again, in the event of short positions, we would be looking at the opposite scenario; looking to place stops just outside of the recent swing-high so that if price reverses the down-trend that we were looking to take part in, we may cut the loss early.
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First from 4H time frame, then on 1H time frame, and finally on 15 min time frame. When a 15 min candlestick closes above or under a trend line, support or resistance, we have a signal to go long or short.
This is the most important part of this trading technique! Most of the traders think of how many pips they want to win per trade, per month or per year. But we will think of how much percentage of our capital we want to win per trade, per month or per year. A- You should define the maximum percentage of your capital you are ready to risk to open a position.
It could be 2, 3, 4,…. In general a stop should be above or under the last low or high depends if you are long or short. Always include the spread in the setting of your stop. D- Why K1 and K2? As much as you can! A- you will set a profit target at the same distance as your stop. This technique is very subjective in the sense that, for different traders, support, resistance and trend lines will not be seen at the same place.
Sometimes a signal should not be taken: This trading is good. I am totally agree with you, you must feel free when trading your system.
So my advice is: This is the secret to control your emotions. But to succeed in forex, you need to trust yourself. Once you get enough trust increase your risk percentage.
Good work Oliver,keep it up! Do we continue redrawing the trendlines as the trade progresses or is it just a one off affair. Solid foundations to a strategy! The last bar close under the support , BUT this support is not anymore valid because of the bar just before which came under the support but close above.
To enter a position the close of the bar should be the lowest under the support. It is 6 45 am Paris time , just woke up, and my first work is to draw trend line.