Hey guys, I would like to share a system I am currently using and am having success predicting pairs. I say predicting because the main objective of this system is to predict trend bounces, make successful trades on patterns, where and when you enter is up to you. Before I state the rules, I must say that this system is not for everybody. If you are a trader that has 0-2 years experience, chances are you will not like this way of trading (this system is nothing new, it's just basic patterns/ideas put together to make a system). Most newer traders like all the bells and whistles to go with a system (I can definetly relate to this). This system has no indis, and the only color added to it is maybe trendlines and fib lines.
THE SYSTEM
First, pull up an hour chart (an 1hr chart because of stability, and prdictableness) of all of the pairs that make good trends, are predictable, and arn't too slow. The first thing I do to my chart is draw trendlines on every good double bottom, double top, triangle, channel, ect, the basic idea is to identify the major supports, trends, and channels. For an example, I will show a current Eur/Usd 1hr chart. It fell like a rock this afternoon, and went to MAJOR support(on the 4hr you will see the line I drew is penetrated on the up or down side 6 times, in this case, it is Major support). Then I drew another trend line that has been penetrated both ways a number of times. Incidently, the target area, or upper red line, on the Eur/Usd just happens to be around the 50% area of the recent fall. So, find the trend, see the support or resistance, draw fib, find target, and you have yourself a trade! The second chart is of a GBP/USD Head and shoulder pattern we had in Febuary. It hit the support, which was 50% retracement of the rise.
Also, making good trades in trend. Most of the time, when a pair breaks a trend line, it will retrace to the trendline. For a current example, I have a current chart of the Gbp/Jpy. It hit current support, stop is 20-40 pips below support, limit is resistance, which is at the 38% point of the latest fall.
As I hope you have noticed, I basically just trade trends and patterns. If I trade patterns, I want support or resistance to be my target, not always my entry. For example, I will show a Us/Chf Bullish flag pattern. On a good Bull or bear flag pattern, the target is the size of the flag(about a hundred pips in this example, which is what occured).
This style of trading is not for everybody, and I will put more pattern examples up later, these were just a few good examples of the style I trade, in which I have jumbled together a little system. Not all trades I make are winners, but this is a very efficiant system, with no lagging indis, and a big target, a great w/l ratio, which works out great for me.
I will answer all questions asked, and feel free to leave your input on this system. Good luck, and happy trading!
THE SYSTEM
First, pull up an hour chart (an 1hr chart because of stability, and prdictableness) of all of the pairs that make good trends, are predictable, and arn't too slow. The first thing I do to my chart is draw trendlines on every good double bottom, double top, triangle, channel, ect, the basic idea is to identify the major supports, trends, and channels. For an example, I will show a current Eur/Usd 1hr chart. It fell like a rock this afternoon, and went to MAJOR support(on the 4hr you will see the line I drew is penetrated on the up or down side 6 times, in this case, it is Major support). Then I drew another trend line that has been penetrated both ways a number of times. Incidently, the target area, or upper red line, on the Eur/Usd just happens to be around the 50% area of the recent fall. So, find the trend, see the support or resistance, draw fib, find target, and you have yourself a trade! The second chart is of a GBP/USD Head and shoulder pattern we had in Febuary. It hit the support, which was 50% retracement of the rise.
Also, making good trades in trend. Most of the time, when a pair breaks a trend line, it will retrace to the trendline. For a current example, I have a current chart of the Gbp/Jpy. It hit current support, stop is 20-40 pips below support, limit is resistance, which is at the 38% point of the latest fall.
As I hope you have noticed, I basically just trade trends and patterns. If I trade patterns, I want support or resistance to be my target, not always my entry. For example, I will show a Us/Chf Bullish flag pattern. On a good Bull or bear flag pattern, the target is the size of the flag(about a hundred pips in this example, which is what occured).
This style of trading is not for everybody, and I will put more pattern examples up later, these were just a few good examples of the style I trade, in which I have jumbled together a little system. Not all trades I make are winners, but this is a very efficiant system, with no lagging indis, and a big target, a great w/l ratio, which works out great for me.
I will answer all questions asked, and feel free to leave your input on this system. Good luck, and happy trading!
Attached Image(s) (click to enlarge)
