Advanced system #8-a (4 CANDLES STRATEGY - BETA)
Submitted by User on November 22, 2009 - 14:27.
4 CANDLES STRATEGY (BETA)
Its good to be here again after a while of hard research work. I believe in simplicity and money management - good MM i mean. Anytime I move away from those two facts, no matter how good the strategy may be, I will fail.
December 23, 2007 I came up with "4 CANDLES STRATEGY" on this website and special thanks to all the followers, critics and Edward the moderator.
This 2009 I have come out with this "BETA" version and this time I think its better, cleaner, and profitable with good money management.
I will do a comprehensive explanation on this site and daily analysis with free trade signals will follow on my blog http://bondfx-market.blogspot.com on daily basis. Please Enjoy it.
Before you read further please review this risk warning:
"Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts."
CURRENCY PAIR: ANY
INDICATOR: STROCHASTIC (5,3,3)
TIME FRAMES: 1HOUR AND 15MIN
SAMPLE PLATFORM: MT4 (LITEFOREX.ORG) with this you can check the broker time and adjust with your broker's time.
I will be using Friday November 20 2009 as an example and will be analysing EUR/USD today
Your chart setup should look like figher (a) below. The blue horizontal lines shows the highest and the lowers level of the first Four(4) candles of the day. You need this for visual aids. At the touch of either of the lines by price. It stochastic is Over sold or over bought, then NO TRADE. If not, then check if the direction of price and stochastic are the same. If stochastic is pointing down and price is touching the lower line then you have a change to trade SHORT and conversely for LONG.
A careful look at the chart figure (a) at 2009.11.20 04:00 the price touched and closed below the lower line for SHORT, but stochastic over sold, then NO TRADE. So we wait or forget trading with this strategy for the day.
A look at figure (b) price touched the uppline 2009.11.20 08:00, and stochastic in same direction. Then potential LONG trade. So we move to the 15min timeframe.
In figure (c). We have a NO TRADE as price refuses to close above the upper line.
Now figure (d) price touched the lower line at about 2009.11.20 11:00 on the 1hour timeframe and stochastic not over sold - then a potential LONG TRADE.
Move down to 15min timeframe as in figure (e). Price closed below the line at about 2009.11.20 11:30 and few pips below the low of this 15min candle is our ENTRY for SHORT trade.
The distance between the two horizontal line in pips value can be your TP and SL. A good understanding of fibonacci or pivot can help you too. I use fibonacci. DONT FORGET MONEY MANAGEMENT, i mean your risk exposures.
I hope you will enjoy this strategy and if compared with previous version, you will see a good improvement. I will also welcome your comments
Daily analysis of the currency market with this strategy on http://bondfx-market.blogspot.com with any pair, showing recommended support and resistant points. A comprehensive analysis of my "POWER TREND" strategy will also be available daily on my blog. I welcome your comments.
MAKE PIPS, KEEP MONEY.....