This is NOT a holy grail, but keeps you on the winning side. It will require that you change your way of thinking so if you open the door, be prepared to sit around that desk for a little while, and then....you will get it!
THE GAME
When I just started learning FOREX trading, I learned that FOREX is a GAME between BULLS and BEARS and that BULLS are only interested in higher prices and BEARS are only interested in lower prices. This fundamental has helped a whole lot with the way I look at the market and interpret price behavior.
With this information, we understand that:
- Every trading day each team is seeking to score points
- The team scoring the most points is winning
- The BULLS only score when they hit high prices (HIGH SCORE)
- The BEARS only score when they hit low prices (LOW SCORE)
- The BULLS are always mindful of their last score and aim to score higher
- The BEARS are always mindful of their last score and aim to score lower
THE SIGNIFICANCE & RELEVANCE OF POINT #2
If BEARS are scoring the most points, we can expect to see short opportunities at high score points and below low score points, vice versa for longs. It means that you can better time your entries. It means that you should pay attention whenever high scores are hit and whenever price begins to close below low scores.
THE STRATEGY
Here I will trade Daily Charts ONLY!
My approach is to:
SELL
- weakness at upper levels (close and high) of BULL BODY bars
- strength at lower levels (close and low) of BEAR BODY bars
BUY
- weakness at lower levels (close and low) of BEAR BODY bars
- strength at upper levels (close and high) of BULL BODY bars
PRINCIPLES
- Bulls are always interested in the high points they scored in a trend.
- Bears are always interested in the low points they scored in a trend.
- When buying starts high points are targeted, vice versa for selling.
- When either team is unable to score beyond the last score point, the other team takes over.
STOPS
Should be placed 10-20 pips from low score/high score but no more than 65pips total.
LIMITS
Next Low or High Score. Weekly Chart may be used to ascertain MOST SOUGHT AFTER TARGETS.
MANAGING TRADES
It is best to move your stop to entry as soon as short trades reach the first Low Score or as long trades reach the first High Score, if you intend to hold the trade beyond the first target.
EXAMPLES
Example #1
Example #2
Example #3
Low Score - this refers to the lower prices on a bear body bar (one with its open price higher than its close price). These would therefore be the bar's low and close price. Low scores are examined on a swing basis beginning from the most current swing: where all bear body bars between the swing high structure and swing low structure will be considered as low score bars. The bar with the highest low, will be the 1st low score bar, then the second highest low, through to the lowest low. The last low score on a swing is the most crucial.
Chart Shot #1
Chart Shot #2
High Score - the converse applies to High Scores.
Always pay attention to the current swing first.
LS - LOW SCORE
HS - HIGH SCORE
X - TARGET
**************I welcome any similar approach WITHOUT any indicators.
**************Best time frames to trade this approach on are Daily and Weekly, H4 is OK.
