Advanced system #6 (Picking Tops and Bottoms)
Submitted by Edward Revy on July 15, 2007 - 07:29.
Were you told not to hunt for tops and bottoms when trading..?
Why not break the rules when you can tell with an astonishing precision where the next top or bottom will be?
Here is one very nice and accurate trading system that could make your Forex trading entirely about hitting the right spots.
Trading setup:
Time frames: 5, 15, 30 minutes, 1 hour, 3 hour and 1 day – just one chart at the time will be used.
In case you do not have the exact time frames, simply substitute them with the closest ones. For example, 15 min can be changed to 10 min, 3 hour can be changed to 4 hour etc.
Read entire post >>>
Hi Edward.
I understand one looks for the highest time frame first. I would like to know if this trade would of been a valid trade to your system or am i changing it. Today 14/08 (giving dates so you can check it up) i saw the EUR/AUD daily chart ADX @40, the 20EMA was at 1.6738, the price was at 1.7026. That is a far retracement, so i had a look at the 4hour chart, the ADX was above 30, 20EMA was being tested. I looked for any long term trendlines for a valid long entry, found one on the 29/07 connecting low of 11/08. I longed at 1.7005 and placed stop just below trendline and 40EMA at 1.6965. Price currently at 1.7040. Another thing i wanted to ask, is placing limits and same amount risked making me loose out on more gains? As i have 5pips to go before exit limit reached.
Hi,
Firstly, I've made some screen shots for everyone to follow.
3 hour chart: ADX over 30, trend line (dark grey).
If ADX is over 30 on daily charts, we ignore all other lower charts, no matter what ADX readings they have.
So, you've changed the rules by looking at smaller time frame.
(The right thing would be to stay with daily charts and wait for a test of 20 EMA; and ADX still being above 30).
One of the reasons your trade was successful was because you've found a valid trend line, which served as support level, in addition fortified by 20 EMA.
This confirms the importance of trend lines :)
Concerning the profit goal, it should be at least equal to risks taken, but better if it is larger than that.
Regards,
Edward
Post new comment