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Trading Methods, Techniques and Ideas

Dear Friends,

I'm glad to open a new section of our website dedicated to trading methods, techniques and ideas.
Here, me and my team, and hopefully you as well, will be sharing our favorite trading methods, for example, the best method to exit a trade, the best method to filter trading signals, a favorite method to identify ranging markets, a favorite entry method etc.


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Hi Edward,

First of all, I would like to say thanks for a wonderful and very informative website!

I just recently started looking into Forex and technical analysis, trying to read as much on the subject as possible. I was wondering if it is possible to use options strategies in the currency market. For example, to bet on high volatility (or that a possible breakout will occur but you are unsure of which direction) one could create a "straddle" using stop-losses. I have been unable to find any such strategies online. Is this ever done or am I missing something?

Thanks again from Canada,

Matt

Hi Matt,

Thank you and welcome!
The approach you've described, I call it a breakout strategy. There are plenty of those in Forex. Some classic examples are: the inside bar breakout strategy, the Bollinger bands squeeze breakout strategy, numerous versions of breakout strategies looking to catch and profit from rising volume during the opening of a new Forex trading session etc.

Regards,
Edward

Hi Edward,

Great website you have here & the comment posted is very informative and useful to Forex newbies like myself. Somehow, when put into practice the various recommendations and trading tips, I find difficulty to meet up to expectations.

Recently, I went into LIVE trading. Although with more than 6 months of Demo account practise, I find LIVE trading demands a lot more personal attention with increasing mental stress compared with Demo Account

I use 1 minute or 5 minute charts to place Entry Orders, as well as seeking guidance of trend evaluation from daily, 4 hour, 1 hour including 30 minutes charts, however, most of the trades lost money.

I only trade the EUR/USD pair. Sometimes, taking advantage to ride the waves of the changed trend hoping to earn some pips, but left the former Positioned Order opened and anticipating for a reversed trend (greed), unfortunately, the outcome came out otherwise with greater LOSS by chasing the market (whipsaws), rather than waiting for the market comes to me.

These random market price movements are not well defined or predictable, and I find great difficulty earning positive profits through such haphazard trading approach. My perception, having read many Forex trading notes and web pages, the focus on short time frame (1 minute and 5 minute) to Long or Short trades are not suitable for newbies like me to rely on. There is great truth towards the outcomes from my current trading practices.

Now I am at the crossroad seeking for a correct compass direction to move along that improves my Forex trading methodology and skills. I wish you could advise me as to what the next step or action (strategy) be taken in order to progress and advance in Forex trading.

Edward

This 9ema did the trick it is awesome. I use it with both RSI,stochastcs and auto tren indicator. What do toy like for range markets I can trade only day charts, do to job and living on west coast USA.

Thnaks So Much
Dennis

Hi Dennis,

9 EMA method knows no limits regarding time frames, daily charts are as good as hourly or 5 min.
During ranging markets 9EMA will be less useful, although it would always depend on the width of a range. In a wide range 9 EMA continues to give good short term trading signals, but in a significantly narrow range, you'll see just up and down crosses over and over again, which proves that trading with 9 EMA indicator alone is not an option, you always need other tools to identify trends and ranges.

Regards,
Edward

Hi Edwards,
Thanks so much for your excellent site. U would surely be blessed bountifully,
As U wrote just above, pls could you tell me how i could know when the trading
is about to enter a narrow range before placing trades and losing money.
Also, the adx lags seriously in such a ranging market.
Thanks so much,
Charles

Hi Charles,

ADX lags a lot when it comes to identifying ranging markets on their earliest stages, that's true. (But then when ADX catches up it helps to monitor non-trending markets up to the point when they return to a trending mode).

I've promised earlier that I will start a discussion about ranging markets and methods of trading or avoiding them. Up to this day I'm still battling to find time to actually launch the topic. Hundreds of emails and questions from traders don't let me get bored :) Other times I get carried away by a new trading idea, and a day passes without any contribution to the website.

I don't have a Holy Grail solution for concurring range bound markets, but I do have some thoughts, ideas and indicators to filter, anticipate and trade better. Thank you for putting me back on tracks and reminding once again to touch this huge and important topic of range bound trading!

I'll get to it, sooner or later, but I truly hope I'll do it pretty soon :) That's the plan. I'm also very interested to hear the feedback on it as well as possibly inspire more traders.

Best regards,
Edward

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