Visual Trading System

Hello all,

After a long wait finally I thought of creating a thread so I may help newbies to get their initial trading experience valuable using a visual aide such as a couple of indicators that help read the market price action.

Indicators are tools (aides) developed to capture market price actions in different ways. Markets are unpredictable and these tools will help us to read a story behind the market in the present movement and what has happened in the past. While using these past and present movements of price actions into account the tools may somewhat give an opinion of the price action and its biasness of a short term future. Nevertheless, keep in mind that past actions are not good predictors of the future action with certainty, yet, we have an equal chance to explore any biasness that might highlight within the tools and turn it to a profitable trade wisely.

In this thread I have no intention to show a beginner the basics of Forex Trading but to compile some tools in a template so they can learn to trade using 'what they see' within the tools and I would call it a 'Visual Trading System'. Therefore, any newbie please make sure that you know the fundamentals of Forex trading before using these templates and tools. The best way to strengthen your trading enthusiasm is to read, read and nothing but read on 'how to become a Forex Trader'. Once you are thorough with those so called theories from the past traders who will share their invaluable experience then you may start practicing what you learnt using a demo account. Success will follow later once you get a good grip of what you do.

www.BabyPips.com can be a good starting point for you.

Also I need to thank all the contributors who upload these tools (indicators) time to time in various platforms for me to use in this thread.

Further I kindly expect others not to use this thread as a dumping ground to show ones own templates and indicators whereas they may create their own thread to show those instead.

I will upload a template soon so you may use it as you wish.

Happy trading to you all.

thank you JeeJay

Hello once again,

There are three basic trading styles in forex being 1. Scalping, 2. Day trading and 3. Swing trading. These styles are based on one's ability to be with the markets most of the time to least of the time during a day. As most of the traders have another job to do elsewhere they will have little time to spend with the forex market per day hence may use Day trading to Swing trading styles. Further these styles can also be influenced by the amount of equity (account balance) one holds in an account and the risk appetite one has. It is my belief that a larger account balance has a better capacity to earn profits rather than a small account balance (check the following Scalping explanation please).

1. Scalping - is a style or strategy that can be used with a small amount of time spending with and in the market. I would call it a 'hit and run' strategy. In that, a trader uses a very small time frame/s (TF) (say 1 - 15 minutes charts) to judge the market movement, open a trade and liquidate the position with a few pips in hand in a very small time period. Repeating the same style over a few times per day in different markets can earn a fair profit.

The bigger account holders have an edge in scalping to increase their account balance. Let's say a standard contract has a pip value of $10.00 (ie 1.00 standard contract = pip value of $10), a mini contract has a pip value of $1.00 (ie 0.10 contract = $1.00) and a micro contract has a pip value of $0.10 (ie 0.01 contract = $0.10). If a trader closes a position of a standard contract with 5 pips in hand, the trader earns a profit of $50 ($10 x 5 pips) whereas a micro contract holder will earns only 50 cents ($0.10 x 5 pips). For both the traders risk can be manageable as they closed the positions with 5 pips in hand, yet the larger account holder has a better edge to increase its profit potential.

2. Day trading - is a style for some institutional traders and others who can hold their positions for fairly extended times, sometimes more than a day or two. The chart TFs can vary from 30 minutes to 4 hours. Trades are looking at larger gains at higher risks. I have seen beginners and small account holders got sucked into this strategy and ended up with losses as they couldn't hold onto market volatility and unpredictability. Therefore in my opinion it is best to go for scalping with a moderate single contract that gives you a moderate gain per trade if you are a beginner and/or a small account balance holder. Repeating the same may give you a sustainable gain in a day. Once the account is built up overtime then consider day trading.

3. Swing trading - is a style for most of the institutional trades including big banks and others who have substantially larger account balances and who can take higher risks and looking for very large gains. The chart TFs can vary from a 1 day to months. These traders are the ones who control the overall forex market.

Therefore when newbies decide on forex trading consider the following:
- Your ability to be with and in the market per day
- Your account balance size
- Your risk appetite
- The market conditions (some markets are highly volatile)
- The currency pairs and the broker spread (for the Scalpers broker spread has to be minimal, say less than 2 pips)

When I upload the template soon you need to be sure of what you want to do and your style of trading as any trader can use the template in their own way.

Please find the indicators and templates to start with.

Hello,

Please don't ask me for entry and exit signals. The templates are so clear and you will be able to decide what to do by looking at the price actions and the two indicator tools in the sub windows. Each has to complement each other in order to trigger a trade either long (buy) or short (sell). If you think that you don't understand the template and it is a good indication that you are not yet ready with the learning. So learn the theories before applying it.

In the zip folder you will find all the indicators I used in this system except the Bollinger Bands and Moving Average. These indicators are part of the MT4 platform and nothing new to introduce. I used this system for day trading using 1-4 hours charts. However, scalpers too may use this template as it is easy to recognise entry and exit points.

For scalping you don't need most of the indicators and you may delete some from the system such as, X ADR, FiboPiv etc.

Notes:
- Use the white line as the Stop Loss (SL) and decide a SL 5 pips above or below this line, depending on the position you take. Move the SL when you are in profits to breakeven a pip value similar to the SL distance. You may trail with a similar distance for each trade.
- Scalpers, don't move with the entire wave (small wave) but to consider taking small profits (say 5-7 pips per time) consistently until you build up confidence in trading.
- Others, always check the market direction using a higher TF and stay with the direction. Example if you trade the 15m chart then check the direction of the 1hr chart movements.
- Check the overall trend direction (biasness) using the Triangular MA (blue dotted line) and the 1st window indicator (RSI and MA crossover). If the bias towards a downtrend then buying the currency won't help you to get a good gain.
- If one indicator (window) aligns with the price action and the other (window) does not mean the signal can be a false one. Be aware of this.
- Do not trade during any market news (especially high important RED ones). Close all the existing open positions or make SL tighter before the announcements and wait for sometime (say 1 hour) to take a new trade after announcements as it takes time to settle down the market volatility.

Good luck to you all.