Swing Trades using Price Action

I'll give this a try, I need a swing trade system to try out. Nice job on paper trading before switching live, any good system starts out on paper.

Daily Swing Trade:

I had a eur/usd trade posted here however I was looking at the wrong chart when doing my analysis... the eur/usd did NOT trigger a trade by my criteria... my apologies.

"I now play around with an EA that makes a steady 1.5% daily"

There's no need to do anything else but play on the beach..that
would take 10k and turn it into 400k in one year.
I'm surprised this tidbit is being ignored in this thread

I've been asked in PM about the EA that I'm testing but sad to say it is not for public release so don't ask... sorry.

Not true.

Taking $10,000 and making 1.5% daily would become well over $400,000 if you could compound your profits EVERY day, but you can't do that on a $10,000 account...

Your profit the 1st day is $150... which is not a large enough increase on the equity to be able to increase the size of the 2nd day's trades.

My trade size the 1st day on a $10,000 account would be 0.1 Lots ($1) and the account would need to get to $11,000 to increase the trade size to 0.11 Lots ($1.10), so you could not compound before about day 6 or 7... and even then it would have to be an account with 400:1 leverage...

On the test I'm running I doubled the trade size after the account had doubled... which was at about 10 weeks.

not to nitpick but that wasn't the intent of the post...
the intent was that if you can make 1.5% daily, you are SET.
maybe manually trade for Fun i guess.

I could raise aLot of money to trade with if I could show that kind of return every day.

Swing trade today... Yesterdays Daily candle pieced the 8ema, is a rejection candle and the trend appears to have changed to up (the ema's have crossed for the first time since mid March).

BUY usd/cad - 1.1321
Stop - 1.1227
TakeProfit - 1.1509

Hello pt49. I've been following your thread for two weeks now. Why do you give so much attention to the piecing lines of the candles, and what do you mean by "rejection candle"? The last friday's candle, as similar ones since thursday...can you explain it? Thanks for posting your system.

hey

PMGO... The last 4 candles on the usd/cad daily chart are "rejection" candles in a sense.


The candle on:

1. 16th June did not touch the EMA's (does not qualify).
2. 17th June never had the long wick pointing towards the EMA's (does not qualify).
3. 18th June had a long wick piecing or touching the EMA, and the trend is UP (indicated by the 8EMA being above the 16EMA)... BUY @ 1.1321
4. 19th June is also a long wick piecing candle that also qualifies, giving a new entry BUY @ 1.1349

There was another entry on the Daily EUR/GBP 18th June ... note the long wicked rejection candle piecing the EMA's an closing back near where the daily candle opened. The trend was clearly down and the entry was on Friday's OPEN... SELL @ 0.8508

Rejection candle... is a candle with a wick (or shadow) that is at least twice as long as the rest of the candle... it has tested support/resistance and retraced. It can be with or without a body (long wick Doji). The key is that the candle has a long wick. This type of candle indicates that price opened then moved through the daily range and retraced at least two thirds of that daily range back to near where the day opened.

These candles are described as shooting star and hanging man. There can be others also... a Doji that has one wick much longer than the other and even what is called Railroad Tracks (2 candles) qualifies too.

If you study the charts I have placed in earlier posts you will get the hang of what candles to look for I hope.

I'm not the best at putting my thoughts on paper or in a post, so if you have any other questions... fire away.

Examples of trades not qualifying...

eur/jpy, aud/jpy & chf/jpy - 19th Jun... a good candle on each pair however the EMA's had not clearly crossed at Friday's close (down trend not clearly established).

Another reason not to sell was that the 3 candles from 17th to 19th all had higher lows and higher highs. While this is not part of the method rules as laid out in my first post, common sense tells me to be wary when looking at those 3 candles as a group.

Hit TakeProfit for +188 pips.

Seems like the 8 and 16 are good ma's for confluence as well, especially when you get a double test to the highs and lows or close then start watching for spikes and breaches(rejection candles) of prevoius daily candles once these ma's cross.

I apologize, but I don't understand what you said.

IT is a nice strategy. I remember trading with a similar strategy, based on bounce of price off Moving Average.

And objective backtesting results?

I've been away from my computer so missed a BUY trade entry today.

BUY usd/cad - 1.1539
Stop - 1.1439
TakeProfit - 1.1739

As price is still close to the entry (only 30 pips above) I consider it still to be a good trade, as price could still come back to the entry yet.

** EDIT... price did come back to the entry of 1.1539... so the trade is valid.

The only other pairs that had good candles on Fridays close were the NZD/USD which did not touch the EMA so no trade and the GBP/USD which did touch and piece the EMA however the trend lines are flat, so no trade.

A good filter maybe to enter the trade on break of the qualifying candle's high for longs and qualifying candle's low for shorts

In your rules you state..

Place a Stop 2 to 5 pips below or above the wick of the qualifying candle.

Do you not place the order 2-5 pips above/below the close of the qualifying candle? I am not sure exactly what you mean by above/below the wick...typically ythe wick would be in the opposite direction of the entry.

He meant place a stop loss a few pips beyond the wick of the qualifier. The stop not the entry.

You enter at candle close and stop just beyond the candle wick.

JuicyT is correct... below the bottom wick (of the qualifying candle) on a BUY trade, and above the top wick on a SELL trade.