Generate a 5 Figure income Trading the Forex Market
Veteran trader Reveals How to Generate a 5 Figure income Trading the Forex Market with a Revolutionary and Unique Strategy:
"Learn to profit consistently and systematically trading the Forex market with my 3 top PDFT (Price Driven Forex Trading) strategies."
Author: Michael A. Jones
Article source: http://www.articledeshboard.com/. Used with author's permission. Even though day traders are more interested in a currency trading strategy that focuses on intra-day movements, consulting the daily time frame chart is still very important. Why? Because this is the time frame often consulted by professional traders and fund managers, some representing large institutions. Key levels of support and resistance on the daily chart can be significant and should be taken note of when considering charts on lower time frames. The Doji On The Daily The currency trading strategy described here takes advantage of a setup that occurs frequently through the month on a variety of currency pairs. After each day is complete, preferably using GMT as the guide no matter where you live in the world, examine the previous day's candle on the daily chart and see whether it is the doji formation. A doji candle typically has a very small body. Look for a doji candle with 50 pips or less between the high and low for the day. You can now focus in on this day's price action on the lower time frames. Is the doji candle around a strategic support or resistance level? Does it also match up with a Fibonacci retracement level such as the 50 or 62% mark on a 4 hour or 1 hour chart? Then this could be a reversal point and the current day's action could offer some nice opportunities for trading. How To Trade The Doji On The Daily The currency trading strategy you choose to trade this setup will depend on your personal trading style. Here are 3 possibilities 1. The Breakout If you believe price is going to reverse at this point then set an entry order 5 pips the other side of the high or low of the doji candle and get taken in when price moves. Of course, there may be a false breakout and your stop could be taken out. That's trading! 2. The Re-Test If you want a more cautious currency trading strategy then wait for price to break the high or low of the doji candle (you can mark the high and low on the 1 hour chart or 15 minute chart to get a closer view of the action) and see if the candle on the 15 minute chart closes above or below that level. Price could then continue on for 20 pips or so. However, often, not always, but often, price will come back to retest the previous level of support or resistance before continuing on. Take advantage of this characteristic by putting your entry order in at that level or one or two pips near it just in case price doesn't quite reach the previous day's high or low. Price will now take you in on the trade when it retraces. This method gives you an optimum entry point and you can take your first profit early when price reaches the new high it recently formed before re-tracing. You might want to leave another one or two lots in the trade to take advantage of a price run if price decides to continue on after that. 3. The Straddle This currency trading strategy is for those who only want to examine the charts briefly at the start of a new day, set their orders, walk away and let it run. The straddle technique involves setting an entry order 4 or 5 pips above the previous day's high and setting another entry order 4 or 5 pips below the previous day's low. No stop needs to be set as one trade will cancel the other in the event price moves in one direction and then reverses and goes in the other. As the doji candle on the daily is 50 pips or less, that would be the maximum risk in this case. Obviously you would need to have the equity to be able to support a larger risk like this. Now whichever way price moves, you will get taken in. The risk of being whipsawed out is there but the higher probability is that price will continue on once it has broken the previous day's high or low. Check Daily So if you want to develop a variety of methods and techniques in your overall currency trading strategy, look for the "Doji On The Daily". It frequently offers fine trading opportunities no matter which style you use to trade. For a free pivot point calculator, Fibonacci calculator and the best free economic calendars click here: www.vitalstop.com/Forex/tools.html For a free candle & chart pattern recognition reference tool click here: www.vitalstop.com/Forex/Candle-Chart-Patterns
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