Weekly Charts - So Much Better (for me!)

Got frustrated with this Forex thing for a couple of months and walked away from it. But, then once you have the bug you just have to 'take another look'...

I'm glad I did though because I came to the conclusion I was over trading. Wondered if the weekly charts would be more profitable. And, I think they potentially are.

This is my simple method:

1. Look for a price to reach (or exceed) the 52 week high/low.
2. Then, at the close of the week look for a candlestick which may signal a potential reversal. Pin bars are my favourite for this.
3. The opening of the following week I place my order at the previous high of the candle body (if I'm going short), or low of the candle body (if going long). This means the candle needs to retrace a bit from the close of the previous week for the order to get filled.
4. Minimum 1:4 RR based upon the next area of support/resistance. When (approx.) 100 pips profit is reached, B/E is activated.
5. If candle closes and showing a continuation of the previous trend (ie. going against my trade), I place a manual B/E. Price seems to usually hit this area again. If not, it goes down to a loss.

Waiting for the retrace before order fulfilment means I might miss some potential profitable trades but, I'm okay with that. I realise I needed to get over my fear of missing out as that makes for some bad trading decisions.

I think it really is a case of keeping things simple.

Is there anyone else who trades the weekly charts only? It seems a lot of traders like the excitement of the smaller time-frames. I don't care for excitement...I'd prefer solid trades.

An interesting topic. What pairs are you looking at, something like long EURCHF this week? How do you define areas support/resistance, as everyone seems to have their own definition?

Overtrading often requires a change in trading strategy and style. Using the weekly time frame can be helpful but it doesn't mean that you use it as your trading time frame. You may use it for trend direction or general market conditions and then use a lower time frame for trade set-up or entry.

Trade safe.

KP

From what I can tell, methods need to be adapted so your method may change in the future. But good you found something that works! How long have you been using this method?

Just a quick update...my first couple of weekly trades have gone how I expected. I may only place a handful of orders in a year, but I'd rather quality over quantity!

For others who are struggling take a look at the weekly charts to see if you can develop a strategy. I wouldn't look at any lower time-frames now. Who can be bothered to sit in front of charts all day??

Interesting, will follow along

About #1, do you have any indicator to draw a line at the 52 weeks high and low, or did you do this manually for each chart? Or just eyeball it?

About #3, when you say the candle body, you mean the open or close as opposed to the high or low? What is the reason for this?

How do you treat the recent spike price action (flash crash) in some AUD pairs as the unrealistic low will filter out any buy for a very long time?

Thanks,

In this example, would you get entry or miss out?

Thanks

Nope, I just eyeball it.

It's difficult for me to explain in words so, I'll post a chart to explain one of my entries. From this chart:



1. Position 1 shows the candle has closed under the 52 week low. In fact, it's the lowest the price has fallen in a couple of years.
2. Position 2 is signalling a sign of reversal as the week ended with a bull hammer.
3. As price usually tends to retract, a pending buy is placed at the bottom of the body of the position 2 candle.

When looking at the 52 week highs/lows I'm only considering the closing price and not any wicks/freaky black swans etc! So, the week of 30.12.18 on this chart I consider only the closing price (0.71176).

Also, I've started to look at previous areas of support/resistance to aid my entries. And, the 0.69000 area seems to be a historically good one for the AUD/USD as it reached it both in 2015 and 2016 before seeing a correction.

I probably won't be placing many entries in a year as the criteria isn't met too often. And, it's also no 'Holy Grail' as many entries could fail. But, with a 1:4 RR I feel this would be profitable for me in the long term.

Take a look through the historic data on your MT4 charts to see if you think it would work for you too

I wouldn't touch that one. Hopefully, from my reply above you can see why? If not, my reason is:

1. The final bull candle did exceed the 52 week high. There was no sign of any reversal from that candle (equal wicks both ends etc.)
So...
2: When the reversal happened it just 'did'. No sign of anything coming.
And, also...
3. If an entry were to be placed using my strategy (which it wouldn't have been as my criteria weren't met!), it would have had to be placed at the 81000(ish) level as that was the high of the first bear candle.

Oh, one more quick thing...I probably won't post many updates on this thread. It was more of a thread to say it's worth looking at higher time-frames rather than me delving into my own strategy. I couldn't be doing with the hassle of that as I wouldn't want to justify my own methods to some that may criticise them. Ha!

Hopefully it helps somewhat for those who are at the end of their tether with Forex though.

Hi plymgary,
thanks for publishing your trading method for W1 charts, still working fine for you?
I am going to start using the W1 charts too, it is hard to spend much time in front of the screen due to my full time job.
If I spot a good set up I will publish it this weekend.

Happy Friday and safe trading