Forex : Forex Day Trading
A Simple Automated Forex Trading System That ...
* Is a True "Set and Forget" Method
* Requires no technical indicators
* Requires only 5 minutes per day
* No losing month for over one year
* Averages +158 pips per month
* Average returns of 5-25% per month
* Makes only 1 trade per day at the same exact time
* Is fully automated with a metatrader Expert Advisor (EA)
Two Step Trend Analysis
If you approach forex day trading by just looking at the
5 minute and 15 minute charts there is a strong possibility
your account will evaporate sooner rather than later.
In order to get a feel for the market and an indication
of the current trend it is necessary to do an analysis by
looking at multiple charts on different time frames starting
with higher level charts first.
Rather than having the charts cluttered with numerous indicators
and signals which can cause signal paralysis, I recommend
1. MACD (with default settings)
2. 200 EMA (Exponential Moving Average)
Now examine your charts using a top down approach:
* 4 Hour
* 1 Hour
As you check each chart take note of these two factors:
1. Has MACD crossed down or up and is it above or below
the water line?
2. Is price above or below the 200 EMA?
While it is not crucial to have them all lined up on these
three time frames for successful forex day trading, if you
want to be a cautious trader and go for high probability
trades then certainly MACD on the 4 hour chart and 1 hour
chart should be in agreement as also should price in relation
to the 200 EMA.
The daily chart can be useful in seeing the larger picture
and for noting key levels of support and resistance. They
stand out on a daily chart so if price is within 100 pips
of a crucial level of support or resistance as seen on the
daily chart, make a note of the figure.
Then scale down to the lower time frames and see if this
level matches with other indicators such as pivot points
or Fibonacci levels.
Once you have done this groundwork, NOW you can look at
the 15 minute and 5 minute charts for a suitable entry point.
Remember, for successful Forex day trading you need to
adhere to the No. 1 commandment: Buy The Dips and Sell the
So avoid chasing the market and going with the flow. Instead,
wait for price to come the level you want, set your entry
order, and let price pull you into the trade.
The Danger With Lower Time Frames
Just concentrating on the 15 minute and 5 minute charts
will not give you the bigger picture. You could see what
looks like a perfectly good trade and set your stops and
limits only to find you get blown out within a few minutes.
By looking at the higher time frame you would probably
have seen you were close to a key support or resistance
level and either not gone into the trade or adjusted your
stops and limits accordingly.
For the novice, Forex day trading can involve a huge learning
curve. Include this simple daily top down analysis approach
to your trading and protect yourself against making trades
you wish you didn't!
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