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Posts Tagged ‘Forex Price Action Strategy’

Proven Trendline Forex Trading Strategy I Use To Grab 80 Pips On The GBPUSD

Trendline Forex Trading Strategy

Trendline Forex Trading Strategy

The GBP/USD is one of the most  pair in the Spot Forex market definitely…

( If You have been trading for awhile…You would agree too on that ! )

This is because London exchange is one of the largest financial market and wild price swing of  200 - 300 pips on the GBP pairs are very common..

That is why I simply love trading the London market !

….As it is very prone to ” Massive Breakouts” - Where I can grab some good pips in just a short period.

For this strategy in this post….all You need is to plot a simple Trendline on the required pivot points ….( such as resistance / support )

And just to wait for the price to enter into what I called the ” Money Zone “….

When that happens….You can most probably see a good “High Probability  Set-up ” ..

You can then enter and ride on the trend for some valuable pips

More details on this forex trading strategy later…

Let me first share some recent updates of my life as I have not been posting for awhile and many fellow traders have wrote in asking ” why ! “..

( They simply want to know more strategies on Price Actions… * smile *)

Yes…I have not been updating any trading strategies for awhile..

That’s because I am rather pre-occupied with  some important things which need to  be attended to…

I actually went away to Japan …. ( to be exact it is Kyoto.)

A rather close friend of mine is getting married and actually invited me to attend…

Such a rare chance to attend a wedding ceremony of a Japanese couple…..

Why wouldn’t I go right ?

Of course there are no reason for me to say No at all…. ( Can’t wait for such opportunity in fact…..LOL !)

I was there for about a month this time round…

….and besides having an eye opening experience witnessing the way they conduct the entire wedding ceremony in a ” Japanese ” traditional way…

I also tour around Kyoto of course - Enjoying all the nice delicacies as I am definitely a Japanese food lover !

( Especially the raw Sashimis which only been out from the sea for just a few hours ! How shiok right ! )

Just look at this plate of SALMON…and You will know what I mean *drool even till now * !

And here’s one of the wedding ceremony pic to share :

Looks ” rather ” interesting isn’t it ?

Especially with the BOLD White & Red combination…

As an Asian…I can easily mistaken it for……erm……some other ceremony !

But it is really very impressive and eye opener for me and my wife ( our baby too ) !

( Have You witness such ceremony before ? If You have not….then consider making a trip to Japan sometime after You earn enough from Forex market as it is truly an unique occasion one must experience ! No Joke.. )

Here’s one of the  Shrine called  Kinkaguji that’s SO MAJESTIC looking :

A very Majestic looking Shrine resting on calm water…….nice …

Simply can’t get enough of  Kyoto as there are so many things to explore..

Mostly the historical architects which reflect typical Japanese culture & their unique traditions..

That is why my wife and baby came back to Singapore after 2 weeks as baby needs to go to the kiddie school..

But I continue to stay there for another 2 weeks as my friend insisted that I stay for awhile more..

I can in fact go on and on with my Japan holiday …..as there are so many ” exciting ” things to share …

BUT…!

I know this is NOT what You came into my Forex Trading Empire for …..right ?

I knew it of course….I haven’t forget about it..

Alright….without much ado…

Let me share the main meat about this posts..

- A ” Proven TrendlineForex trading strategy which I profited a nice 80 Pips trading the GBPUSD

( Which took me less than 10 minutes to spot the set-up just before sending my wife and baby out for breakfast & to school ! )

If You have been reading the trading strategies in my blog…

You would know by now that I am a strong believer of Price Action strategies and I do not rely on the so called ” technical indicators ” at all..

They are simply too lagging and not accurate to enter into a position or exit early enough before the trend reverse…

( at least to me….)

This ” Trendline ” forex trading strategy is very simple to implement once You know how I did it….

Just wait for the ” Set -Up “ to enter what I called the ” Money or Profit Zone “….

Then all You have to do is ” Enter ” into position if the Reward/Risk ratio is good

That’s it !

Don’t understand at this point of time …?

Not to worry…..as I am sharing the step-by-step details on this forex trading strategy below to help You understand further !

( read on….)

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Step #1 :

- Detecting the ” right ” set-up and drawing the Trendline on appropriate pivot points ( Resistance/Support )

- And then wait for the Price to enter the Money Zone

Like this :

Trendling Forex Trading Strategy Part 1

Trendling Forex Trading Strategy Part 1

This diagram above is showing the  ” Anticipation ” mood…

Meaning….

You would be waiting for the Price to either :

1) Cross above the Trendline  ( violation )…

2) Or…..Bounce Off again to the Down-Side..

If any of these scenarios occur….

…You can then go in to trade on ” the hint “ the market has given You and grab some nice pips…* smile *

( Provided the Reward/Risk ratio is GOOD ! …..read on )

One point to note here is  ….like I said just now….this is an ” Anticipation ” mood…

But for my actual trade….I detect this set - up much earlier & as soon after that ….I turn in to bed for the day..

Because that’s already past midnight in ASIA ( Singapore )….

So the actual Set-Up which I use to get into this GBP/USD trade happens about 2300 GMT….( about 7 am in my country )..

( This is when I wake up to get ready to send baby to the kiddie school……*grin * )

Here’s the Set-Up I got into the trade :

( AND also the Set-Up You Must Know for this Trendline Forex Trading Strategy to work ! )

——————————————————————————————————————

Step #2 :

Getting into a BUY/SELL position when the market gives You ” The Hint ! “

Trendline Forex Trading Strategy Part 2

As You can see from the chart above…

The Price Bounce Off Nicely off the Trendline…..which gives a very ” Nice Hint “ for a SELL trade..

( Which happens at about 7am in my country….I woke up getting ready to send baby to school and fetch wife to market …nice timing )

What would You do if You see such set-up ? Any idea ?

I would definitely enter to SELL since it is a ” hint “ from the market itself - The best decision making tool ONE can get …* smile *

As I said before…..

Only the market tells You what to do…..We DON”T fight the market or ” Presume ” anything…..

After calculating the Reward/Risk ratio….it is worth while to get in for a SELL trade definitely…

So I enter to Sell at Price : 1.6443

Set the Stop-Loss at Price : 1.6476 ( for a rather small 33 Pips only )

Aiming for a Take-Profits of 80 Pips  ( which is at Price 1.6363 )

This would give me a very good Reward/ Risk ratio of  more than 2 : 1 ….

Do You think such ratio is good ?

I would think it is…..definitely * smile *

Alright at this point….before I proceed for the conclusion of this Trendline trading strategy

I shall share with You something which is very ” Critical ” for Your long term success trading forex..

This is the question YOU have to ask Yourself each time You enter into any position..

The Question is none other than this :

“…..What if You are WRONG about this trade…..and Your Stop-Loss got HIT ? “

Do You have a ” solution ” in mind to counter this negative situation to Your advantage ?

If You don’t…..then most likely the forex trading strategy You are using is Not good….Not proven enough..

…..and the success rate might not be Consistent even….

If You don’t know this yet….

Each time You enter into a Position…You need to ask Yourself :

” What if You are wrong and lose this time round …? “

“…If the true ” Trend ” happens…..can You still get in and capture a 2nd winning trade to recover Your loss earlier ? ”

I definitely can answer this question each and every time I trade…

That’s is why I can trade with Confident and WITHOUT FEAR……..

I do not trade on emotions or feelings or wild guesses or …..listening to what others say so…

Just like for this example…

If I am wrong…..about this SELL trade….

Since my Stop - Loss is ONLY 33 Pips……

And I am aiming a Take - Profits of 80 Pips ( which is more than 2 times )

I can aim for this profit target for this GBPUSD pair as it is within their Daily Pips Range of 150 - 180 Pips

So it is ” realistic “….

When I aim realistically….I do not get false hope from the market…

I do not have to HOPE that the market would show some miracle and hit my Profit Target..

Instead …

I only aim for the Price Range that is always ” happening ” daily…

In this way….I am not trading on HOPE….

Hence…I would not feel stress about it or Fearful….

The best thing is that I am entering on a Good Reward/Risk ratio

With a rather tight stop-loss of 33 pips…

If I am wrong about the SELL….and the direction turn BULLISH…

I can still enter again and aiming for the same Reward/Risk ratio….

End of the day…I would STILL ” WIN “ though I am wrong earlier…

So now I am sure You know the importance of entering with a GOOD Reward/Risk ratio…

If You are not doing that yet…….then IT”S TIME YOU DO SO ! * smile *

Alright..so much for the importance of Reward/Risk ratio…

Let’s get into the trade and see how it progress….

——————————————————————————————————

Step #3 :

- Watching the PRICE ACTION to see if You need to cut loss early if there are ” Unfavorable ” set-ups against You  ( optional )

What I mean by this step is to basically watch the Price Action and Patterns Formation to see if there are any ( Bullish ) set-ups formed against Your trade…

Since I am always trading on the 1 hour time frame…

I only need to spend about 1 -2 minute every hour to keep track… ( or maybe ADD MORE LOTS too if market is good ! )

However….since the Stop-Loss for this trade is only 33 Pips…

Then it is really ” Optional ” to do this step…

I am just including it so that You can learn something applicable when You are aiming for bigger TP

( Which also needs a much bigger Stop-Loss too….)

Let me show You how I watch the Price Action for this GBPUSD trade then…

Here’s an illustration :

Trendline Forex Trading Strategy Part 3

Trendline Forex Trading Strategy Part 3

As You can also see from the chart above :

The price plummeted for more than 80 Pips…

And as such…it hits our Take-Profit target of 80 Pips ( at Price 1.6363 ) for this SELL trade on GBP/USD.

Aiming for a Take-Profit target which is within the ” Daily Pips Range ” of the currency pair You are trading is a good way to trade..

However…..there is also another way which You can gauge ” whether ” would the price continue to move in the direction You Want or not..

It is by analyzing Price Action of course…

Let me show You some examples on How I did it to help You understand better :

- As You can see there’s a ” rather strong support ” formed on the illustration above..

- This could be a significant level where the price might bounce and climb back up……( which means turning against Your SELL trade )

- So if there’s a ” sign ” that the price indeed Bounce and climb….then either You cut loss….or allow the small stop-loss to be hit.

- And get in again when there’s  a good set - up in the ” other ” direction..

- Also You might see that there’s an ” area of consolidation ” before the Price plunge further ( refer illustrations )

- This ” area of consolidation ” is very important …If You Know How To Watch The Price Action…

( Because it could give You ” impeding ” sign of the next market movements …such as breakout to the other direction )

- The price broke below the ” area of consolidation ” and plummet further down and hitting my Take-Profits.

Note : Once the support is broken….” Normally ” the price would continue to move further and so we can aim for just a bit more Pips…

But when I check how this trades progress..

The ” Take- Profit ” already hit…..

And all I saw was Profits of USD $2,381.73 in the trading account…

Not too bad considering it only took me about 3 minutes to identify the ” Trendline Bounce ” ….

…and then entering the ” Sell Order “, ” Take-Profit ” & ” Stop-Loss “…* smile *

Here’s an actual earnings screen-shot to share :

Forex Earnings GBPUSD July21

Forex Earnings GBPUSD July21

Summary for this GBPUSD trade :

Our ” SELL “ order at Price :   1.6443

Stop-Loss at Price :   1.6476

Take-Profits at Price :   1.6363  ( 80 Pips )

Total Profits netted = USD $2,381.73

( Minus spreads & swap rates )

This forex trading strategy using just ” Trendline ” and waiting it to enter our so called Money or Profits Zone can be considered one of the simplest one in my strategies basket.

As You can see….You do not need to use any complicated technical analysis at all..

But just draw the trendline on a series of ” Pivot ” points formed…

That’s it.

If You need to…..read once more from the start of this post to recap what this ” Trendline ” forex trading strategy is all about.

It is worth mastering it as ” most of the time ” in the forex market..

The Price ” Violation or Bounce Off ” from this kind of Trendline does give You a very good ” Hint ” about what is is going to happen next…

So all You have to do is of course to get that ” hint “….and act accordingly for some good PIPS ( just like I did ! )

Alright…so much for this forex trading strategy using just ” Trendline “…

I hope You do learn another proven strategy once again today…..

And to be exact….it is one strategy that can withstand any market conditions and truly works !

Oh ya….one more thing before I sign off..

Maybe 80 Pips is just not enough for You…

What can You do to grab MORE PIPS then….?

Just use master this forex strategy….and apply it across 2 , 3 or even 4 currency pairs…

You can do the simple math here do You ?

Add up those Pips…..and You would be laughing just like I do….every week….* smile *

Thanks for reading this far….

Cheers and Happy ” Trendline ” Drawing & Grabbing Those Pips !

To Your Forex Success,

- Aaron Tan ( your trading friend )

Why Forex Price Action ? Why Such Forex Trading Strategies Are More Powerful & Accurate ?

——————————————————————————————————-

Warning: Before you proceed to read the entire post below…it is essential for you to discard everything you know about using technical analysis to trade the forex market ( …Especially if YOU’ve been relying HEAVILY on technical indicators! )

——————————————————————————————————

If you’re also wondering what’s Forex Price Action actually….& why such Forex Trading Strategies are more Powerful & Accurate…

Then this post is definitely a must read for you !

Basically Forex Price Action is a trading strategy which analyze the ” Behaviour of the Price & the Patterns that have formed ” in the forex market.

We then use such ” Behaviour & Patterns” to gauge what the market’s sentiment is currently and most importantly - What’s the market response most likely be next…

If you don’t know yet…..do you know that using PRICE ACTION to analyse the forex market is the closest ” Hints” you can siphon from the market about what it’s telling you.

To put it simply…it is the most powerful way to really predict :

1) Where the price would be heading ( whether Up, Down or Sideway….)

2) And more critically - By using Forex Price Action, it would enable anyone to enter into a trend very EARLY at the start !

Here’s what I mean :

( Without using any Technical Indicator at all..)

Forex Price Action

Forex Price Action

Now ask yourself this….how many times when you rely HEAVILY on textbook indicators be it  Moving Averages or MACD or Stochastic or Bill Williams or Bollinger Bands or RSI…..etc..

You actually managed to detect a trend really ” EARLY ” at the start of it…

Most of the time, when these technical indicators gave us the signal to BUY or SELL….the trend would have moved halfway from the starting point..

And when we entered happily thinking that this time round, we would be walking away for a nice profits based on the signals from these technical indicators..

It actually turn out very disappointed for us because when it’s time to exit….the indicator is slow in telling you too!

And what happen next ?

2 things…..

Either you read the PRICE ACTION & The Patterns it formed and exit when you detect a Possibility of  Price Reversal…

….Or you simply allow the trend to reverse and seeing those profits given back to the market painfully!

Worst, when market reverse and eating away the previous profits you had and then ultimately hit your Stop-LOSS….

Your morale literally dampen to the max …..and you sort of think to yourself…..why.? why? why?

You’re frustrated….confused and at the same time have the urge to fight back using even bigger lots ….

What does this leads to ?

A gambling mindset - A fatal trap to most newbies or even experience traders still trying to make consistent profits every month.

I truly understand this vicious cycle because I for once also rely heavily on textbook indicators during the early phase of my forex trading journey.

I would say that it is inevitable that all newbies who came into this forex trading game would be expose to such technical indicators for sure…

Because it is what ALL books & training programs are teaching !

Now….don’t get me wrong here though.

Technical indicators do work for some and still continue to help them rake in consistent Pips & Profits …month after month.

However….these are the traders who truly understand the ” Strengths & Limitations” of the technical indicators they are using..

And very importantly….they are using the ” Right Settings ” too.

I personally have tested more than 30+ combinations using almost all of the technical indicators we can find on most trading platform..

There are some trades which are successful…..some are really bad.

Such as …when the market is RANGING…..( and if you’re using Moving Averages ), there would be very messy & confusing WHIPSAWS.

When I finally understand that all these technical indicators actually derive their formula from the market’s PAST HISTORY - The Price..

I begin my journey on studying on the Price …..particularly the ” Forex Price Action & Patterns” it form for my Buy & Sell decision.

This is where my trading skills took to a whole new height - Which literally enable me to enter a trading position much more accurately & also nail MORE PIPS ( because I can now enter early during the trend !)

The main reason why the Price in a Forex market moves in a particular direction is due to 2 driving forces namely :

1) Fear  ( Fearful Selling ? Downtrend….)

2) Greed  ( Greedy Buying ? Uptrend..)

3) How about Unsure..?  Then it would be Sideway or so called a Ranging Market

Studying of Forex Price Action can in fact also be considered a relatively close study of the market responses..

The amazing thing about using Price Action is that it is FASTER than any derivative or technical indicator..

It is NOT lagging or confusing like many of the popular textbook indicators…

And the ONLY TRUTH in the Forex Market is the CURRENT PRICE !

By trading purely based on Forex Price Action, I can ignore news, opinions and any personal biases..

And it can also be ” Confidently” use by any trader ( including yourself ) to predict the near future response of the market with a high level of Accuracy…..and Much Earlier.

Thus allowing You to enter at the ” Start Of A Trend ” Earlier…..( Just like in the example I shown above about the ” V ” Reversal…)

As well as ” Exit ” with more valuable Pips & Profits for any trade you took…..instead of waiting for the technical indicator to give you signal which are almost too late normally.

Do you know why is that so …..?

That’s because these technical indicators rely on the Price Action ( mainly the Past History Price ) to give You the Buy or Sell signal.

Which explains why they are ALWAYS lagging behind & slower then the actual Price ……

So……….instead of using technical indicators to give me the Buy/Sell signal….

I am using them in an OPPOSITE way….( Opposite from 95% of the frustrated traders  )

With that I mean - I am giving Priority to The Price Action & The Patterns formed on the forex market..

Whereas most of the traders would give priority to the lagging technical indicators instead..

Moreover…. I ONLY use simple indicator ( 1 or 2 at most ) to help me confirm my decision based on the Price Action.

And not clustering my chart with 2 or 3 moving averages plus bollinger band plus another 2 oscillators - Which only make the decision making more complicating & clouding our ability to spot good trading opportunities!

PS: Remember this…..when You do things the same way as the majority….you would get the same results. And that applies to 95% of the frustrated traders who are struggling to make consistent profits every month !

What you think after reading what I have to share about Forex Price Action here ?

Is it time You explore and learn more about Forex Price Action too and bring your trading skill to a whole new ” More Powerful” level ?

Or even better….

Combined just a few ” Reliable” technical indicators which you’re already using WITH Price Action Forex Trading Strategy….

And see the amazing & shocking results ( More Profits ) for yourself in the days to come perhaps ! * smile *

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Recommended Read :

1)  Powerful Forex Price Action ” Reversal ” Strategy From Forex Confidant

2)  Proven Price Action ” Trend ” Strategy From Forex Supremacy

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