Friday 25 November 2016

How to use 10 EMA for entry on 4-hour chart

The 10 EMA is one of the most popular moving averages among all ages of traders.Perhaps it is popular because it is most dynamic.Moreover,it can deliver more wins than losses if combined with atleast another indicator like fibonacci or stochastics.


The  4-hour USDCAD chart above shows how 10 EMA and stochastics are combined to generate a trade entry.The stochastics was already showing overbought when the price was also moving above the 10 EMA.Traders will wait for a confirmation to ascertain that the pair is actually overbought before they pull the trigger.
courses on forex ad 2 
The fact that the stochastics says overbought means that buyers should thread with greater caution and sellers should watch out for their turn which may come in no time.The overbought is confirmed when the red candle in the yellow ring closed well below the 10 EMA.The best entry price is to place a sell order at about 5 pips below the same red candle.This is to avoid whipsaws.
So, we saw overbought on stochastics and wait for price to close below the 10 EMA so as to have a set-up candle.Once we have a set-up candle that confirms the scenario, the next step is to sell at 5 pips below the same set-up candle. You may please forward your question or leave a comment. I am the author of this blog. I can write for you on your forex blog too for a token.

Friday 11 November 2016

How to trade daily range breakout

This trading system does not apply any technical indicators, and it requires only daily time frame.It is in harmony with the market momentum and the set-up comes up more often than not.

My position is not just  to design a simple or complex trading system, but to come up with a methodology that converts efforts and capital to success and profits sustainably. Many traders believe that a trading system MUST be highly sophisticated for it to be powerful and profitable. I disagree.Complex systems work and simple ones do too. Moreover, both have equally been over-represented in failure as well.The market itself is simple, but traders tend to see it with complex eyes. I do see the market as simple as I equally see my life.

courses on forex ad 2 

 Like I said in paragraph one, we will need to switch to daily time frame of any pair. I prefer GBPUSD and EURUSD. These are my favourite pairs.Once we are on the chart, we will carefully observe the last two days` candles excluding today`s candle.If they are in close range,then yesterday`s candle becomes our set-up bar. However, if yesterday`s candle has a range that is up to twice or more than the magnitude of the range of the candle formed two days ago, then we do not have a set-up bar.

We do not have a set-up bar

The candles above are cut out from  the daiy chart of GBPUSD. The red arrow points down on today`s candle while the blue arrow points down on yesterday`s candle. The high to low of yesterday`s candle formed on 2016/10/07 was 1.2622 to 1.1889. That is a range of 733 pips. The can formed two days ago on 2016/10/07 has a high to low of 1.2759 to 1.2601.That is a range of 158 pips. You can see that yesterday`s range   exceeded the range of the candle formed two days ago. Hence we do not have a set up bar.



We do have a set- up bar

The candles above are cut out from  the daiy chart of GBPUSD. The red arrow points down on today`s candle while the blue arrow points down on yesterday`s candle. The high to low of yesterday`s candle formed on 2016/10/10 was 1.2441 to 1.2344. That is a range of 97 pips. The candle formed two days ago on 2016/10/07  has a high to low of 1.2622 to 1.1889. That is a range of 733 pips.You can see that yesterday`s range is less than the range of the candle formed two days ago. Hence we do  have a set up bar.

Now that we have a set-up bar today the 2016/10/11, then we will place pending buy 10 pips above yesterday`s candle and at the same time place pending sell 10 pips below yesterday`s low. The stop loss for buy is 10 pips below yesterday`s low while the stop loss for sell is 10 pips above yesterday`s high. The take profit should be twice the value of the stop loss with a trailing stop of half the value of the stop loss.You may please forward your question or leave a comment. I am the author of this blog. I can write for you on your forex blog too for a token.







Wednesday 2 November 2016

How To Use Trendline To Spot Convergence

In this post Iam going to explain how to trendlines to determine the possible end of a retracement and to spot the best point to join the prevailing the market trend.I am also going to apply this to this week`s charts and decide the best entry and exit points for this week.
I am not going to explain what trendline is again as I have written enough posts on that.Meanwhile, this trendline video is very helpful.So I am going straight to the point.Trendline is an effective technical tool. It is can be used conservatively or creatively. Itend to use it creatively as occasion serves me.

Let us look at what is happening in the EURUSD market.




From the EURUSD daily chart above, it is obvious that the current trendline is bearish.However, we can still see that price is rising up gradually to perhaps to test the trendline.Even though we are clearly in a downtrend as shown by the trendline, we may not be buoyant enough to sell at this point. We therefore need another reasons to justify our decision.Hence we switch to a lower time frame, 4hour chart to be precise.

The EURSD 4hour chart above shows that the current trendline is bullish.Now there is a conflict between trendlines on daily and 4hour charts of the same currency.What do we do now? We will keep our eyes on the 4hour chart and watch for a breakout below the trendline.We will then sell the breakout.Since  I am selling, my take profit level should be the next significant support.The same approach applies to uptrend.


The Forex Broker You Can Trust

 




How To Use Harmonic Pattern To Generate Solid Forex Signals

Today I want to explain how to use an harmonic pattern called `Gartley` in forex trading for sustainable profitability.
Gartley is an effective forex trading tool and it is compatible with any timeframe and currency pairs.It is a pattern which relies on the philosophy that to every trend, there is a retracement. Most of the times, it is formed near tops or bottoms. Since Gartley is a retracement trading pattern, it typically makes the most of Fibonacci tools.There are two types of gartley; bearish gartley and bullish gartley.

Bearish Gartley
It is a pattern in which fibonacci tools is used to determine the possible end of a retracement in a downtrend and to  indicate the salient selling point during the rally.

The folowing rules apply when using observing bearish gartley formation:(1) The length AB must be atleast 61.8% of length XA. (2) BC can retrace 38.2% and 88.6% of AB. (3) CD can project between 1.272% or 161.8% of AB. (4) CD can also be a retracement of up to 78.6% of XA. (5) The point D is regarded as the potential reversal zone which is the entry point for sellers. (6) Stops are placed slightly above point X. (7) Profit objectives are placed around point A.


 The diagram above further illustrates Bearish Gartley pattern.

Bullish Gartley
It is a pattern in which fibonacci tools is used to determine the possible end of a retracement in an uptrend and to  indicate the salient point to buy during a bearish trend.



The folowing rules apply when using observing bullish gartley formation:(1) The length AB must be atleast between 38.2%61.8% of length XA. (2) BC can retrace 38.2% and 88.6% of AB. (3) CD can project between 1.272% or 161.8% of AB. (4) CD can also be a retracement of up to 78.6% of XA. (5) The point D is regarded as the potential reversal zone which is the entry point for buyers. (6) Stops are placed slightly below point X. (7) Profit objectives are placed around point A.


The diagram above further explains bullish and bearish gartley patterns.


The Forex Broker You Can Trust