Guys,
I would like to introduce an additional setup which I find to be very effective, since it allows to have very tight stops and maximizes your R/R ratio. Please do not underestimate this setup. If you master it, you will be amazed with the trade opportunities it gives you.
First read the attached PDF file to get familiar with this pattern which is widely used on Stock Market.
Here I will explain how to use this pattern with our system.
Indicators used:
1. MACD (38, 120, 20) - shows the trend. Its up to you to decide if you go with the trend or not. I find that Counter-trend setups work just as fine.
2. Rads Stochastics (13, 3, 3) - Stochastics which allows to observe divergence easier. You can use simple stochastics as well.
3. Semafor (8, 13, 35) - for swing identification. 8 gives us 1st lvl swings (orange dots on my charts). 13 gives us 2nd lvl swings (blue dots on my charts). And finally 35 gives us 3rd lvl swings (blue dots in the red "sun" on my charts)
Entry rules: (described for longs, do opposite for shorts)
1. MACD > 0 (this is for trend-trading. You can use the same setup for counter-trend trading as well, then you won't need the MACD to point in your direction)
2. lvl 2 and lvl 3 swings have formed. (blue dot and the "sun")
3. Rads Stochastic shows divergence between the swings.
Place buy stop above the high of the first bar which closed below the 2nd lvl swing (blue dot).
Place stop loss right below the blue dot (2nd lvl swing).
Place take profit at the nearest fib extension or exit using any exit strategy you like.
One more thing about the Semafor indicator.
I use it as a visual tool for easier swing identification. When you become good with this setup, you won't even need the indicator itself. However try to experiment with it for now. Try to use different parameters and see which work better for you.
Attached are the examples for today. We had one setup on EU during Asian session and one setup on GU at the beginning of London session.
In case of GU we had a 17 pips SL with a potential profit of as much as 130 pips.
In case of EU we had a 9 pips SL with a potential profit of as much as 215 pips.
Now how is that for a Risk/Reward ratio?
I would like to introduce an additional setup which I find to be very effective, since it allows to have very tight stops and maximizes your R/R ratio. Please do not underestimate this setup. If you master it, you will be amazed with the trade opportunities it gives you.
First read the attached PDF file to get familiar with this pattern which is widely used on Stock Market.
Here I will explain how to use this pattern with our system.
Indicators used:
1. MACD (38, 120, 20) - shows the trend. Its up to you to decide if you go with the trend or not. I find that Counter-trend setups work just as fine.
2. Rads Stochastics (13, 3, 3) - Stochastics which allows to observe divergence easier. You can use simple stochastics as well.
3. Semafor (8, 13, 35) - for swing identification. 8 gives us 1st lvl swings (orange dots on my charts). 13 gives us 2nd lvl swings (blue dots on my charts). And finally 35 gives us 3rd lvl swings (blue dots in the red "sun" on my charts)
Entry rules: (described for longs, do opposite for shorts)
1. MACD > 0 (this is for trend-trading. You can use the same setup for counter-trend trading as well, then you won't need the MACD to point in your direction)
2. lvl 2 and lvl 3 swings have formed. (blue dot and the "sun")
3. Rads Stochastic shows divergence between the swings.
Place buy stop above the high of the first bar which closed below the 2nd lvl swing (blue dot).
Place stop loss right below the blue dot (2nd lvl swing).
Place take profit at the nearest fib extension or exit using any exit strategy you like.
One more thing about the Semafor indicator.
I use it as a visual tool for easier swing identification. When you become good with this setup, you won't even need the indicator itself. However try to experiment with it for now. Try to use different parameters and see which work better for you.
Attached are the examples for today. We had one setup on EU during Asian session and one setup on GU at the beginning of London session.
In case of GU we had a 17 pips SL with a potential profit of as much as 130 pips.
In case of EU we had a 9 pips SL with a potential profit of as much as 215 pips.
Now how is that for a Risk/Reward ratio?
Attached Image(s) (click to enlarge)
Attached File(s)
