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As can see the is a break on the trend line and resistance is holding. So I will sell this to the next level 1x position and have another position with a wider take profit.
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RTY1 1D BEAR FLAGBear Flags are Ranges that are repeatable trading chart patterns.
Bear Flags are a chart patterns that will have a directional bias depending on the previous incoming trend.
Each chart pattern will have defining trendlines of the support/resistance levels creating the pattern.
What ever time frame you are trading this chart pattern, wait for a candle close outside of the trendline in the direction of the breakout candle. (Our time frame preference is the Daily chart).
Add volume indicator - Volume is the amount of $ that went into a particular candle or in Forex the # of trades that took place.
Add ATR indicator - Volatility is the amount of price movement that occurred. Use the ATR to measure the price movement.
When you see descending Volume bars and descending ATR line (which indicates volatility) this shows
a dis-interest in traders to invest in this pair creating consolidation which creates the chart pattern.
Trade Management after there is a breakout candle close.
1 - Position size (compare volume bar to volume ma line).
a - Breakout candle must be 100% of average volume for a full position size.
b - If 75% of average volume then ½ position size. (To find 75% of Volume
look at the charts volume settings – divide smaller # into larger # = 75%+)
2 - Enter two trades.
3 - SL for both trades will be 1.5 x ATR.
4 - 1st trade TP will be 1 x ATR.
5 - No TP on 2nd trade – letting profit run and adjusting SL to follow price.
6 - When 1st TP hit – move 2nd trade SL to breakeven.
7 - Adjust the 2nd trade SL to follow price.
*8 – After Breakout candle – if price closes back into chart pattern close trade
*9 - When breakout candle is more than 1 ATR from breakout candle open.
a - Enter 1st trade at candle close with ½ position size.
b - Enter 2nd trade with a pending limit order that is 1 ATR of breakout candle open.
c – Price should pullback to that pending limit order for 2nd trade.
d – If Price returns back into chart pattern close trade before SL is hit.
CTA TRADING STRATEGY - ONLY SYSTEM YOU NEED TO USE1 What is CTA Trading?
2 Types of CTA Trading Strategies
3 How does CTA Trading Strategy work?
4 CTA Trading Strategy
4.1 CTA Trend Filter Rules
4.2 CTA Trading Rules for Entries
4.3 CTA Trading Diversification
5 Final Words – CTA Strategy
1 What is CTA Trading?
In finance, CTA is an abbreviation for Commodity Trading Advisor.
A CTA is a professional money manager or a hedge fund who trade futures contracts, commodities, options and certain foreign exchange instruments in more than 150 global markets.
Note* Trading futures and options involve a high risk of losing your investment.
Learn more about other tricks used by CTAs here: Hedge Fund Strategies and Tools Used on Wall Street.
Basically, in CTA finance, a commodity trading advisor tends to run managed futures strategies with OPM (other people’s money). As you might think in the US, managed futures are regulated by the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA) so you can be sure the CTA fund strategy use strict risk management rules.
Now, you might be wondering, what are managed futures?
In layman terms, managed futures are a type of unconventional investment approach in which the portfolio is actively managed by professional money managers like CTAs. This also explains what is a CTA fund.
CTA trading looks for ways to make money in both up and down markets. So in other to accomplish this, they will implement a multitude of CTA futures trading strategies.
2 Types of CTA Trading Strategies
Institutional traders have several CTA trading strategies that can use to thrive in any type of market environment. The two of the most popular CTA investment strategies that can be used by a CTA fund are:
Systematic strategies
Discretionary strategies
These two leading strategies used by the CTA investment funds are largely available to be used by the small investor as well. The difference between systematic and discretionary trading is the following:
Systematic CTAs are relying on automated trading strategies and models that use chart pattern recognition signals, trend following signals and technical analysis removing the human intervention
Discretionary CTAs are relying on macro data analysis and trades are executed at the discretion of the CTA fund manager
Note* There are also CTA commodity trading strategies that focus on niche trading plays like market-neutral strategies or delta-neutral strategies.
Now, our team of experts at Trading Strategy Guides will focus on CTA systematic strategies.
Why?
Well, it’s because when we remove the emotion element from the equation of trading we improve our odds of success. Now of course, if you have a gut feeling that comes from tens of years of trading experience, you can override the trade signals of your CTA strategy at your discretion.
No CTA investment strategy is foolproof.
3 How does CTA Trading Strategy work?
The mechanisms behind the CTA trading strategy are similar to any other trading strategy.
You’ll be surprised to learn that most CTA strategies are based on simple stuff like moving averages, momentum indicators or pattern recognition. They are mostly CTA technical analysis based strategies.
However, we can distinguish at least two differences.
First…
The main ingredient of a CTA investment strategy is contingent on the ability to construct a diversified portfolio. That’s investing in several global markets and trying to capture both bullish and bearish trends.
Second…
The CTA trading models rely heavily on analyzing a huge amount of price data that encompasses even 100 years worth of data.
These two elements are what makes the CTA strategy so much more reliable when it comes to correctly predict the direction of the trend and being profitable. Not all trends are created equal, so by diversifying their portfolios, CTA managers can increase their chance of actually capturing a really big trend.
Our team of experts will outline a CTA trading algorithm that can be used without the need of having fancy financial models. You can trade this CTA strategy from any trading platform that offers charting packages.
4 CTA Trading Strategy
In this section, we’re going to provide you with a framework to build a trend following model based on price action. We’re also going to provide you with some of the foundations of how the CTA trading strategy works.
When you go through the process of building a trend-following model, it’s important to first have a strong foundation. But, the reality is that most trend-following rules attempt to achieve the same results i.e. capturing the trend.
Once you grasp that no matter how much you twist the trend following system rules, in the grand scheme, it doesn’t affect the outcome of your trading activities. As we mentioned earlier, the value of the CTA trend trading system comes from diversification.
Now, don’t worry if you don’t know any decent trend following system.
We’re going to share with you some CTA trading rules that will help you achieve the same results as the top CTA fund managers.
A - CTA Trend Filter Rules
The trading rules are the least important thing with trend-based systems, however, to maximize gains it’s important to be able to detect trends as early as possible.
In this regard, we’re going to reveal two of the most important moving averages used on Wall Street since early 1900. The 50-day moving average in combination with the 100-day moving average is our primary tools to gauge the trend direction.
Here are the rules to determine the uptrends and downtrends:
We’re in an uptrend if the 50-day moving average is above the 100-day moving average.
We’re in a downtrend if the 50-day moving average is below the 100-day moving average.
These trend filter rules are quite simple, nothing complicated here.
The trend-following rules are designed to keep you with the dominant trend and to reduce the risk of getting whipsawed by the price action.
Now, you might be wondering…
How do I decide to enter the trend?
B - CTA Trading Rules for Entries
There are many CTA technical analysis tools that can be used to trigger your entry. However, make no mistake, no matter how much you want to improve on your trade entry, in the long run, it doesn’t matter.
In the context of a trend market timing is secondary to things like position sizing.
So, to keep things simple…
We enter a long position when we break and close above the 100-day moving average.
And, vice versa, we enter a short position when we break and close below the 100-day moving average.
Don’t be a novice trader and focus all your energy on your entries. But, instead, try to analyze how to diversify your holdings and how much to risk on each trade.
This brings us to the next point.
C - CTA Trading Diversification
Here is the thing…
Some trends are stronger than others. Inherently, some stocks can develop stronger trends than others. Secondly, there may be long periods, where the market is flat and no trend is presented. In some instances, when we don’t have a catalyst for trend development, the market can stay trendless for years.
At the same time, when the market is not trading we can also have lots of false signals.
Now, the key idea is to cover more than just one market and built up a portfolio of trades, the same as in our latest forex basket trading strategy.
When you try to catch trends from multiple instruments at the same time you increase your odds of success.
Let me explain…
Trends come in different forms and shapes.
Some trends will last for a very short period of time. Other market trends will reverse on you, right when you enter the market.
The idea is that you will incur losses.
It’s inevitable.
But, with diversification, it will allow you to catch a big trend as well.
No one knows what market trends will continue to develop and what market trends are doomed to die unless of course, you have the Holy Grail. So, by diversifying in multiple trends you can take small hits her and there, but if one market emerges with a strong trend you can overcome all your losses and finish the line with a lot of profits.
Just for simplicity, we’re going to assume we’ve bought the above three stocks Apple, Facebook and Twitter. All of the three stocks started to emerge into an uptrend, more or less, around the same time.
What is the first thing that pops up though your mind studying the 3 stock charts?
The trends developed on the Twitter and Facebook chart price were short-lived.
So, he took a hit on those two trades.
However, with our Apple trade, we were able to recover all of our losses and make a nice profit.
That’s the power of CTA diversification in action.
Now, what if we told you that the CTA fund managers use position sizing in their favor to further turn the odds of success.
What do we mean by that?
CTA trend following strategies also uses volatility-based position sizing. The trading principles are simple, allocating different position sizes based on the level of stock volatility:
Take larger position sizes for less volatile stocks
Take bigger position sizes for higher volatile stocks
With this approach theoretically, each trade should have the same impact. Most CTA funds use the Average True Range (ATR) as a proxy measurement of volatility.
Final Words – CTA Strategy
In summary, CTA trading offers an exciting opportunity for both long and short investors. With the CTA trading strategy, you can achieve a true diversification of your portfolio by spreading the risk across several positions.
However, you have to keep in mind that generating positive returns are dependent to your skills to identify good trading signals. Outstanding returns can’t be achieved only through diversification.
So, here is a short recap of the CTA strategy:
A systematic approach is superior to a discretionary approach
Define the uptrend and downtrend combining the 50-day MA and 100-day MA
Diversify your portfolio with multiple positions
Use volatility-based position sizing to maximize your profits
AMAZON 1D RANGE TRADESRanges are repeatable trading chart patterns.
Ranges are consolidation chart patterns that can breakout either direction.
Each chart pattern will have defining trendlines of the support/resistance levels creating the pattern.
What ever time frame you are trading this chart pattern, wait for a candle close outside of the trendline in the direction of the breakout candle. (Our time frame preference is the Daily chart).
Add volume indicator - Volume is the amount of $ that went into a particular candle or in Forex the # of trades that took place.
Add ATR indicator - Volatility is the amount of price movement that occurred. Use the ATR to measure the price movement.
When you see descending Volume bars and descending ATR line (which indicates volatility) this shows
a dis-interest in traders to invest in this pair creating consolidation which creates the chart pattern.
Trade Management after there is a breakout candle close.
1 - Position size (compare volume bar to volume ma line).
a - Breakout candle must be 100% of average volume for a full position size.
b - If 75% of average volume then ½ position size. (To find 75% of Volume
look at the charts volume settings – divide smaller # into larger # = 75%+)
2 - Enter two trades.
3 - SL for both trades will be 1.5 x ATR.
4 - 1st trade TP will be 1 x ATR.
5 - No TP on 2nd trade – letting profit run and adjusting SL to follow price.
6 - When 1st TP hit – move 2nd trade SL to breakeven.
7 - Adjust the 2nd trade SL to follow price.
*8 – After Breakout candle – if price closes back into chart pattern close trade
*9 - When breakout candle is more than 1 ATR from breakout candle open.
a - Enter 1st trade at candle close with ½ position size.
b - Enter 2nd trade with a pending limit order that is 1 ATR of breakout candle open.
c – Price should pullback to that pending limit order for 2nd trade.
d – If Price returns back into chart pattern close trade before SL is hit.
USDJPY 1W RANGE TRADESRanges are repeatable trading chart patterns.
Ranges are consolidation chart patterns that can breakout either direction.
Each chart pattern will have defining trendlines of the support/resistance levels creating the pattern.
Whatever time frame you are trading this chart pattern, wait for a candle close outside of the trendline in the direction of the breakout candle. (Our time frame preference is the Daily chart ).
Add volume indicator - Volume is the amount of $ that went into a particular candle or in Forex the # of trades that took place.
Add ATR indicator - Volatility is the amount of price movement that occurred. Use the ATR to measure the price movement.
When you see descending Volume bars and descending ATR line (which indicates volatility ) this shows
a dis-interest in traders to invest in this pair creating consolidation which creates the chart pattern.
Trade Management after there is a breakout candle close.
1 - Position size (compare volume bar to volume ma line).
a - Breakout candle must be 100% of average volume for a full position size.
b - If 75% of average volume then ½ position size. (To find 75% of Volume
look at the charts volume settings – divide smaller # into larger # = 75%+)
2 - Enter two trades.
3 - SL for both trades will be 1.5 x ATR.
4 - 1st trade TP will be 1 x ATR.
5 - No TP on 2nd trade – letting profit run and adjusting SL to follow price.
6 - When 1st TP hit – move 2nd trade SL to breakeven.
7 - Adjust the 2nd trade SL to follow price.
*8 – After Breakout candle – if price closes back into chart pattern close trade
*9 - When breakout candle is more than 1 ATR from breakout candle open.
a - Enter 1st trade at candle close with ½ position size.
b - Enter 2nd trade with a pending limit order that is 1 ATR of breakout candle open.
c – Price should pullback to that pending limit order for 2nd trade.
d – If Price returns back into chart pattern close trade before SL is hit.
FOREX BASKET TRADING SYSTEMWhat is Basket Trading Forex?
In forex, basket trading involves buying and selling different correlated or uncorrelated currency pairs at one time where the market lines up. The aim is that after sufficient time the sum of all open positions is in positive territory and the trades can be closed with a profit. This means that the sums of all profits and the sums of all losses are positive.
Instead of trading one currency, you focus on a basket of currency pairs.
Some positions may cancel each other due to the positive and negative correlation between different currency pairs. In this regard, you can also construct a market-neutral strategy using a basket of currency pairs.
Learn more about market-neutral strategy, which has helped traders not only in the forex market but the stock market as well.
How Basket Trading Works?
Essentially, what we try to accomplish is looking at a particular currency pair that has a clear trend (bullish or bearish). Once you establish the general direction of that particular currency pair, based on the strength and weakness of the 2 currencies, we can choose our basket of currencies.
For example, if among all the currency pairs you have determined a strong USD/JPY bearish trend, this will be our base FX pair to establish our basket.
If the overall direction of USD/JPY is down, it means the Japanese Yen is strengthening.
Once we have done our USD/JPY analysis, we can now spread our risk across all YEN crosses.
So, instead of going short only USD/JPY, we also go short GBP/JPY, EUR/JPY and AUD/JPY.
Just by looking at this particular chart, we can notice that while the broad-based JPY strength can be seen across all YEN crosses, some currency pairs move at a faster speed.
So, if you planned to only risk 4% on the USD/JPY trade, now that you have 4 currency pairs all aligning up, you can risk 1% on each currency pair individually.
While the forex basket trading method is designed to spread out the risk it still has a major flaw.
The success of this strategy is strongly tied to your ability to correctly read the forex market trends.
Even if you have the best basket trading ideas, if you get the trend wrong, you’re doomed to fail.
Our proprietary forex basket trading system is designed to eliminate the directional trading element.
But, before we reveal our own unique method, let’s outline a few reasons why the forex basket trading method is worth getting your time.
Why Use Forex Basket Trading System.
The most important thing about trading basket currencies is that it takes away from the zero or hero trading environment.
What do we mean by that?
Forex trading or any market (stocks, futures, commodities, cryptocurrencies, etc.) is very emotional. Basically, all market prices are driven by fear and greed. We’re all fearful to take a loss and greedy when it comes to taking the profits.
So, by using forex basket trading you can detach yourself from this concept of being right on every trade. Traders who assume they can win every position will inevitably wrong into trouble. You can let the market do its thing and take the loss when you’re wrong and profit when you’re right.
Secondly, basket trading is a form of diversifying your investment risk.
Instead of allocating the risk to one single trading idea, basket trading allows us to allocate the same amount of risk, bust spread across multiple currency pairs.
Next, we’re going to showcase a brief demonstration of the forex basket trading strategy.
Forex Basket Trading Strategy.
As explained, the conventional basket trading method involves selecting a basket of currency pairs based on the currency pair that presents the clearest trend. But, we all know that the market never moves in a straight line, it moves up and down in swing waves.
And, we all know that all trends have an end and eventually they reverse.
So, what we have done is the make the forex basket strategy into a non-directional strategy.
Important Note* our basket trading strategy is non-directional in the sense that the overall positions can generate a positive outcome even if we’re wrong on the forex market direction.
This means that we’re still going to try to forecast the trend and position accordingly.
Now let’s give you a framework or base for our currency basket method.
Step #1 Determine the US Dollar Trend Direction
There are some standard methods to determine the trend direction of a currency.
You can use the price structure in terms of higher highs and higher lows to define an uptrend or lower lows and lower highs to define a downtrend. But, you can also use technical indicators.
Just for simplicity, we’re going to use the US dollar index chart below:
Based on the above DXY chart, we have determined that the US dollar is getting stronger.
The expectation is for the dollar to gain strength against its major counterparts.
The next step is obviously to determine what currency pairs to buy and what currency pairs to sell. This is what will determine the success of this strategy.
Step #2 Select our Currency Pairs
The currency pair selection will be done according to which currency pairs are moving in tandem with the US dollar and which currency pairs are moving against the US dollar strength.
To accomplish this, we’re going to track which currency pairs have been moving in the previous days in the same direction with the US dollar.
The only two currency pairs that have benefited the most from the dollar strength were AUD/USD and EUR/USD. On the other hand, USD/CAD traded almost flat while GBP/USD showed restrain movement to the downside ignoring the dollar strength.
So, what we want to do in this situation is to:
Buy the dollar against those currencies that have moved in tandem with the dollar strength (i.e. sell EUR/USD and sell AUD/USD)
Sell the dollar against those currencies that have ignored the dollar strength (i.e. buy GBP/USD and sell USD/CAD)
Note* the risk is going to be spread equally across all 4 currency pairs. I.E. we’re going to buy and sell the same number of lots.
Now, let’s track, what would have happened to our positions at the end of the first trading day. Our currency portfolio would look something like this:
Sell EUR/USD trade (-2 pips loss)
Sell AUD/USD trade (-3 pips loss)
Sell USD/CAD trade (-16 pips loss)
Buy GBP/USD trade (-27 pips loss)
After the first trading day, the sum of all of our positions would be -50 pips. The results are pretty disappointing, but let’s consider moving forward and see what would happen after 10 days.
Our currency positions would look something like this:
Sell EUR/USD trade (+79 pips won)
Sell AUD/USD trade (+105 pips won)
Sell USD/CAD trade (-80 pips loss)
Buy GBP/USD trade (-14 pips loss)
The sum of our wins and losses is +90 pips.
Now, with this approach, some positions will inevitably generate some losses. What we aim is to construct a currency portfolio that is non-directional and makes us money regardless if we’re wrong on the trend direction.
As we said in the title you have to learn to win when you lose.
Losing trades are anyway part of the job of being a trader.
Another approach that you can use to implement the forex basket trading method is to use a forex currency index, like the US dollar index.
Basket Trading using a Currency Index
A currency index is an index that measures the value of one currency against a basket of foreign currencies. Most traders are only familiar with the US dollar index DXY, but the reality is that you can construct an index for the GBP, EUR, JPY and other currencies.
Some trading platforms have built-in different currency basket index that you can use for free.
For this forex basket trading system, we would need to use a combination of a minimum of three instruments.
Let’s assume we want to gauge the strength and weakness of the British Pound across the board.
For this purpose, we’re going to use the British Pound index and two other GBP crosses like GBP/USD and GBP/JPY.
This basket trading strategy involves gauging the strength and weakness of currency pairs by studying the price structure and the relationship between the currency pairs.
What we mean by this is we look to find clues in the price action for possible divergence signals between the currency pairs. And, then act based on that information.
For example:
If the British Pound index makes a new higher high, but one of the GBP crosses fails to make a new higher high that is a sign of weakness and a possible reversal signal.
We can note that both the British Pound index and GBP/USD move in tandem, but the GBP/JPY breaks the correlation and fails to make a new higher high.
In this trade situation, we can sell the currency pair that is the weakest i.e. GBP/JPY.
But at the same time, we can sell the whole GBP crosses to spread our risk evenly across multiple currency pairs. Now, as you can tell, basket trading can be implemented in various ways. You can experiment with different types of trading scenarios and come up with your own unique forex basket trading strategy.
Final Words – Forex Basket Trading Method
In summary, losing trades can be a good thing if you prepare strategically by implementing successful forex basket strategies. The forex basket trading strategy has the potential for a massive amount of profits if you’re good at picking up currency pairs and implement superior risk management techniques.
Being a consistent trader, it’s not a one-time event; it has to be a habit. In order to be a consistent trader, you need to be involved with multiple currency pairs as this will increase the probability of your success. With basket trading, even if some currency pairs will show losses, you’ll have others that will offset those losses and you’ll come victorious in the end.
Thank you for reading!
3 of 3 Candlestick Patterns That Pinpoint ReversalsBullish Hammer Candlestick
These candles are easy to spot and they generally have taller wicks than their bodies, resembling a hammer's handle and head.
They tend to close without (or with very little) upper wicks.
Here's what a bullish hammer candlestick is telling us:
Price opened near the highs of the candle and although sellers initially succeeded at pushing price lower, they lost the final battle when buyers tipped the scales in their favor again by closing price higher than the opening price.
2 of 3 Candlestick Patterns That Pinpoint ReversalsBearish Hammer Candlestick (AKA Inverted Hammer)
These bearish formations are simply upside down hammers, and are also known as inverted hammers.
Here's what a bearish hammer candlestick is telling us:
Price opened near the lows of the candle, and although buyers initially succeeded at pushing price higher, they lost the final battle when sellers tipped the scales in their favor again by closing price lower than the opening price.
EURJPY 15M ASIAN SESSION BEARISH REVERSALBearish Reversal Candlestick
The inverse is true with this type of formation in a bearish scenario, and the image above shows that price made the highest high before reversing and closing strongly lower off its highs.
Here's what a bearish candlestick is telling us:
Price made a new high, but buying pressure very quickly dried up as an increase of sellers entered the market resulting in the candle closing lower off its highs, signaling selling strength.
Strategy Provided by Price Action & Income by Richard Krugel
EURAUD 15M ASIAN SESSION BULLISH REVERSAL 1 of 3 Candlestick Patterns That Pinpoint Reversals.
When I'm analyzing a market, there are only 3 candlestick patterns that I'm worried about.
Over the last decade, they have proven to be the most accurate at confirming entries at the areas I want to trade.
1 - BULLISH REVERSAL CANDLESTICK PATTERN.
The image above shows a bullish reversal candlestick, and you'll notice that it's a singular candle formation.
Here's what a bullish candlestick is telling us:
Price made a new low, but selling pressure very quickly dried up as an increase of buyers entered the market, resulting in the candle closing high off its lows, signaling buying strength.
EURGBP 1D BEAR FLAG SHORT TRADEA Bear Flag is a Range pattern which is a repeatable trading chart pattern.
Bear Flag Range chart patterns will have a directional bias depending on the previous incoming trend.
Each chart pattern will have defining trendlines of the support/resistance levels creating the pattern.
Whatever time frame you are trading this chart pattern, wait for a candle close outside of the trendline in the direction of the breakout candle. (Our time frame preference is the Daily chart).
Add volume indicator - Volume is the amount of $ that went into a particular candle or in Forex the # of trades that took place.
Add ATR indicator - Volatility is the amount of price movement that occurred. Use the ATR to measure the price movement.
When you see descending Volume bars and descending ATR line (which indicates volatility) this shows
a dis-interest in traders to invest in this pair creating consolidation which creates the chart pattern.
Trade Management after there is a breakout candle close.
1 - Position size (compare volume bar to volume ma line).
a - Breakout candle must be 100% of average volume for a full position size.
b - If 75% of average volume then ½ position size. (To find 75% of Volume
look at the charts volume settings – divide smaller # into larger # = 75%+)
2 - Enter two trades.
3 - SL for both trades will be 1.5 x ATR.
4 - 1st trade TP will be 1 x ATR.
5 - No TP on 2nd trade – letting profit run and adjusting SL to follow price.
6 - When 1st TP hit – move 2nd trade SL to breakeven.
7 - Adjust the 2nd trade SL to follow price.
*8 – After Breakout candle – if price closes back into chart pattern close trade
*9 - When breakout candle is more than 1 ATR from breakout candle open.
a - Enter 1st trade at candle close with ½ position size.
b - Enter 2nd trade with a pending limit order that is 1 ATR of breakout candle open.
c – Price should pullback to that pending limit order for 2nd trade.
d – If Price returns back into chart pattern close trade before SL is hit.
EURJPY 1D ASCENDING TRIANGLEAscending Triangles are repeatable trading chart patterns.
Ascending chart patterns will have a directional bias depending on the previous incoming trend (Long).
Each chart pattern will have defining trendlines of the support/resistance levels creating the pattern.
What ever time frame you are trading this chart pattern, wait for a candle close outside of the trendline in the direction of the breakout candle. (Our time frame preference is the Daily chart).
Add volume indicator - Volume is the amount of $ that went into a particular candle or in Forex the # of trades that took place.
Add ATR indicator - Volatility is the amount of price movement that occurred. Use the ATR to measure the price movement.
When you see descending Volume bars and descending ATR line (which indicates volatility) this shows
a dis-interest in traders to invest in this pair creating consolidation which creates the chart pattern.
Trade Management after there is a breakout candle close.
1 - Position size (compare volume bar to volume ma line).
a - Breakout candle must be 100% of average volume for a full position size.
b - If 75% of average volume then ½ position size. (To find 75% of Volume
look at the charts volume settings – divide smaller # into larger # = 75%+)
2 - Enter two trades.
3 - SL for both trades will be 1.5 x ATR.
4 - 1st trade TP will be 1 x ATR.
5 - No TP on 2nd trade – letting profit run and adjusting SL to follow price.
6 - When 1st TP hit – move 2nd trade SL to breakeven.
7 - Adjust the 2nd trade SL to follow price.
*8 – After Breakout candle – if price closes back into chart pattern close trade
*9 - When breakout candle is more than 1 ATR from breakout candle open.
a - Enter 1st trade at candle close with ½ position size.
b - Enter 2nd trade with a pending limit order that is 1 ATR of breakout candle open.
c – Price should pullback to that pending limit order for 2nd trade.
d – If Price returns back into chart pattern close trade before SL is hit.
BCHUSD 1H BEST MOMENTUM TRADING STRATEGYThe Best Momentum Trading Strategy using the Best Forex Momentum Indicator
Our team at Trading Strategy Guides believes that smart trading is the way to build the best momentum trading strategy. In this regard, we don’t want to predict when the momentum will happen, but we let the market tips his hands and then react.
One principle of the momentum indicator strategy is, “buy high to go higher” and “sell low to go lower.” In other words, we trade in the direction of the trend while having the momentum on our side. Also read the hidden secrets of moving average.
Moving forward, we present the buy side rules of the best momentum trading strategy.
Step #1: Define the Trend. An Uptrend is defined by a Series of HH Followed by a Series of HL.
The definition of an uptrend is pretty much standard. In an uptrend, we look for a series of higher highs followed by a series of higher lows. Two HH followed by at least another two HL is enough to define an uptrend.
A higher high is simply a swing high point that is higher than the previous swing high. While a higher low is simply a swing low that is higher than the previous swing low.
All momentum traders know that the trend is our friend. But without momentum behind the trend, we might actually not have any trend.
For active traders, we also look at the actual price action in order to gauge momentum. Besides reading the best forex momentum indicator.
Step #2: In an Uptrend Look for Bold Candlesticks that Close Near the Higher End of the Candlestick .
A technical analysis concept is that you want to use multiple confirmation signs when buying and selling. This will increase the likelihood that’s a high probability trading setup.
In this regard, the momentum trading strategy besides using the best Forex momentum indicator, also incorporates the price action.
A practical way to read momentum from a price chart is to simply look at the candlestick length. What we want to see in an uptrend is big, bold bullish candlesticks that close near the higher end of the candlestick.
In the figure above, we have an ideal representation of what we’re looking for. The upside price movement is preceded by big bullish candlesticks. This confirms the momentum behind the trend.
Now, it’s time to focus on the Williams %R. This is the best forex momentum indicator. Which brings us to the next step of our momentum indicator strategy.
Step #3: Wait for the best Forex Momentum Indicator to get oversold (below -80). Then rallies above the -50 level before Buying .
We’re going to use Williams %R, the best forex momentum indicator in a smart way. In an uptrend, we buy after the best forex momentum indicator has reached oversold conditions (below -80). And then rallied back above the -50 level.
Now, we have confirmation from both the price and the best forex momentum indicator. The real momentum is behind this trend and the probabilities are in favor of more upside prices from here on.
Note* If the best forex momentum indicator continually stays in overbought territory (above -20 level), it signals a strong momentum and conversely a strong trend. Inversely the same is true in a downtrend.
The next important thing we need to establish is where to place our protective stop loss.
Step #4: Place Your Protective Stop Loss below the Recent Higher Low.
We want to hide our protective stop loss. It is below the most recent higher low level that formed right before the best momentum trading strategy issue the buy signal.
Alternatively, you can also trail your stop loss below each most recent higher low. This strategy will allow you to lock-in the potential profits in case of a sudden market reversal.
Last but not least the momentum indicator strategy also needs a place where we need to take profits, which brings us to the last step of the best momentum trading strategy.
Step #5: Take Profit once we break below the Previous Higher Low
A trend in motion can stay in that state longer than anyone can anticipate. And since we want to maximize our potential profits we let the market tips it hands before liquidating our trades. In this regard, we look for a break in the trend structure. Respectively a break below the most recent higher low.
Alternatively, you can take profit once the best forex momentum indicator breaks below the -50 level.
Note** The above was an example of a BUY trade using the Best Momentum Trading Strategy. Use the same rules for a SELL trade.
Summary
The best momentum trading strategy leverages the tendency of a market’s price to continue moving in a single direction. This is where the momentum might be upwards or downwards. In essence, market timing is crucial for a momentum indicator strategy. And in this regard, we incorporated the best Forex momentum indicator (Williams %R) in our momentum strategy. Here are some of the trading conditions you want to avoid in the forex market.
Timing the market can be a daunting task. But our team at Trading Strategy Guides believes that using a pure price action can get you a long way.
BTCUSD 30M BITCOIN-SIGNAL STRATEGYBitcoin-Signal Indicator Finds:
Entry Signal.
Exit adjustable risk-reward Signal.
Adjustable Stop Loss Signal.
You enter Signals after you evaluate the price action and market structure.
BEST COMMODITY INTRA-DAY WTI CRUDE OIL 30 M TRADING STRATEGY#1 Add CCI Indicator with default 20 setting.
#2 Add a CCI 0 level line.
How to Filter Bad Trades.
A - Bad: when price action makes CCI take a long time to go from -100 to + 100.
B - Good: when price action makes CCImake a quick straight move from - 100 to + 100.
#3 Buy when CCL breaks above +100 level.
#4 SL below CCI +100 breakout candle.
#5 Exit trade when CCI crosses below 0 level line.
COCA-COLA 1D RANGE TRADESRanges are repeatable trading chart patterns.
Ranges are consolidation chart patterns that can breakout either direction.
Each chart pattern will have defining trendlines of the support/resistance levels creating the pattern.
Whatever time frame you are trading this chart pattern, wait for a candle close outside of the trendline in the direction of the breakout candle. (Our time frame preference is the Daily chart).
Add volume indicator - Volume is the amount of $ that went into a particular candle or in Forex the # of trades that took place.
Add ATR indicator - Volatility is the amount of price movement that occurred. Use the ATR to measure the price movement.
When you see descending Volume bars and descending ATR line (which indicates volatility) this shows
a dis-interest in traders to invest in this pair creating consolidation which creates the chart pattern.
Trade Management after there is a breakout candle close.
1 - Position size (compare volume bar to volume ma line).
a - Breakout candle must be 100% of average volume for a full position size.
b - If 75% of average volume then ½ position size. (To find 75% of Volume
look at the charts volume settings – divide smaller # into larger # = 75%+)
2 - Enter two trades.
3 - SL for both trades will be 1.5 x ATR.
4 - 1st trade TP will be 1 x ATR.
5 - No TP on 2nd trade – letting profit run and adjusting SL to follow price.
6 - When 1st TP hit – move 2nd trade SL to breakeven.
7 - Adjust the 2nd trade SL to follow price.
*8 – After Breakout candle – if price closes back into chart pattern close trade
*9 - When breakout candle is more than 1 ATR from breakout candle open.
a - Enter 1st trade at candle close with ½ position size.
b - Enter 2nd trade with a pending limit order that is 1 ATR of breakout candle open.
c – Price should pullback to that pending limit order for 2nd trade.
d – If Price returns back into chart pattern close trade before SL is hit.
GBPUSD 15M US SESSION W PATTERN BULLISH SCALP LONG TRADE1 - Find a Modified Double bottom forming W Pattern.
2 - At Neck of W draw resistance line.
3 - Enter the Trade at breakout of the neckline.
4 - Use measurement tool for a 1 to 2 risk reward projection to find SL & TP
EURCAD 1D RANGE TRADESRanges are repeatable trading chart patterns.
Ranges are consolidation chart patterns that can breakout either direction.
Each chart pattern will have defining trendlines of the support/resistance levels creating the pattern.
What ever time frame you are trading this chart pattern, wait for a candle close outside of the trendline in the direction of the breakout candle. (Our time frame preference is the Daily chart).
Add volume indicator - Volume is the amount of $ that went into a particular candle or in Forex the # of trades that took place.
Add ATR indicator - Volatility is the amount of price movement that occurred. Use the ATR to measure the price movement.
When you see descending Volume bars and descending ATR line (which indicates volatility) this shows
a dis-interest in traders to invest in this pair creating consolidation which creates the chart pattern.
Trade Management after there is a breakout candle close.
1 - Position size (compare volume bar to volume ma line).
a - Breakout candle must be 100% of average volume for a full position size.
b - If 75% of average volume then ½ position size. (To find 75% of Volume
look at the charts volume settings – divide smaller # into larger # = 75%+)
2 - Enter two trades.
3 - SL for both trades will be 1.5 x ATR.
4 - 1st trade TP will be 1 x ATR.
5 - No TP on 2nd trade – letting profit run and adjusting SL to follow price.
6 - When 1st TP hit – move 2nd trade SL to breakeven.
7 - Adjust the 2nd trade SL to follow price.
*8 – After Breakout candle – if price closes back into chart pattern close trade
*9 - When breakout candle is more than 1 ATR from breakout candle open.
a - Enter 1st trade at candle close with ½ position size.
b - Enter 2nd trade with a pending limit order that is 1 ATR of breakout candle open.
c – Price should pullback to that pending limit order for 2nd trade.
d – If Price returns back into chart pattern close trade before SL is hit.
LTCUSD 4H BIG 3 TRADING INDICATORStep 1 - Add Big Three Indicator to your chart.
Step 2 - The Trend is up if Price is above the Blue 80 sma line.
Step 3 - ENTER TRADE when price has closed above Blue 80 sma line and Long column is Green.
Step 4 - SL below the bottom of all 3 moving averages
Step 5 - #3 CLOSE OUT TRADE when Big 3 Neutral Column turned Yellow at this candle close
ETHUSD 4H RSI 80-20 TRADING STRATEGY SHORT TRADERSI 80-20 TRADING STRATEGY SHORT TRADE RULES
1 - Find Highest candle in the last current 50 bars.
2 - That High candle coupled with RSI above 80 level.
3 - Wait for a new Swing HIgh but RSI is lower - DIVERGENCE.
4 - ENTER on breakout candle close below 1st candle's low.
5 - Stop Loss above new swing high.
6 - EXIT with a 1 to 3 risk reward Take Profit.
Add RSI to chart
Adjustments:
14 period, to 8.
70 and 30 lines, to 80 and 20.
This indicator comes standard on most trading platforms. You’ll just need to make the adjustments above.
Step 1 - Find the currency pair that is showing a high the last 50 candlesticks. (OR low depending on the trade)
The 80-20 Trading strategy can be used for any period. This is because there are reversals of trends in every period. This can be a swing trade, day trade, or a scalping trade. As long as it follows the rules, it is a valid trade. We also have training for building a foundation before a forex strategy matters. In this step, we only need to ensure it is the low or the high of the last 50 candles.
Step 2 - Using the RSI Trading Indicator:
When we find 50 candle high, it needs to be coupled with RSI reading 80 or higher. (If it’s low it needs to be combined with the RSI reading 20 or lower.). We have a reading that hit the 80 line on the RSI and was the high the last 50 candles.
Once we see that we had a high, the last 50 candles, and the RSI is ABOVE 80, we can move to the next step. Remember that this strategy is a reversal strategy. It is going to break the current trend and move the other direction.
Step 3 - Wait for a second price (high candle) to close after the first one that we already identified.
The second price high must be above the first high. Although, the RSI Trading indicator must provide a lower signal than the first. Remember that divergence can be seen by comparing price action and the movement of an indicator. If the price is making higher highs, the oscillator should also be making higher highs. If the price is making lower lows, the oscillator should also be making lower lows. If they are not, that means price and the oscillator are diverging from each other. Which is why it’s called “divergence.”
Just because you see a bullish or bearish divergence, doesn’t mean you should automatically jump in with a position. We have rules in place that will capitalize on this divergence so that we can make a significant profit. Keep in mind, that this step may take time to develop. It is very important to wait for this second high because it gets you in a better trade making position.
Price goes up/RSI goes down. That is the Divergence. Remember that our example is a current uptrend looking to break to the downside. If this was a 50 candle low, we would be looking at the exact opposite of this step.
Step 4 - How to Enter the Trade with the RSI Trading Strategy.
The way you enter a trade is very simple. You wait for the price to head in the direction of the trade and wait for a candle to close below the first candle that you identified that was previously 50 candle high.
Step 5 - Once you make your entry, place a stop loss.
To place your stop, bump back 1 to 3 time periods and find a reasonable, logical level to put your stop. You are looking for prior resistance or support.
We placed our stop below this support area. That way if the trend continued and did not break, it could hit this level and bounce back up in our direction.
Step 6 - I recommend you follow at least a 1 to 3 profit vs. risk level. This will ensure that you are maximizing your potential to get the most out of the strategy.
You can adjust as you wish. Keep in mind that most successful strategies that identify breaks of a trend use a 1 to 3 profit vs. risk level.
PALLADIUM 1D TRIANGLE BREAKOUTTriangles are repeatable trading chart patterns.
Triangles are consolidation chart patterns that can breakout either direction.
Each chart pattern will have defining trendlines of the support/resistance levels creating the pattern.
Whatever time frame you are trading this chart pattern, wait for a candle close outside of the trendline in the direction of the breakout candle. (Our time frame preference is the Daily chart).
Add volume indicator - Volume is the amount of $ that went into a particular candle or in Forex the # of trades that took place.
Add ATR indicator - Volatility is the amount of price movement that occurred. Use the ATR to measure the price movement.
When you see descending Volume bars and descending ATR line (which indicates volatility) this shows
a dis-interest in traders to invest in this pair creating consolidation which creates the chart pattern.
Trade Management after there is a breakout candle close.
1 - Position size (compare volume bar to volume ma line).
a - Breakout candle must be 100% of average volume for a full position size.
b - If 75% of average volume then ½ position size. (To find 75% of Volume
look at the charts volume settings – divide smaller # into larger # = 75%+)
2 - Enter two trades.
3 - SL for both trades will be 1.5 x ATR.
4 - 1st trade TP will be 1 x ATR.
5 - No TP on 2nd trade – letting profit run and adjusting SL to follow price.
6 - When 1st TP hit – move 2nd trade SL to breakeven.
7 - Adjust the 2nd trade SL to follow price.
*8 – After Breakout candle – if price closes back into chart pattern close trade
*9 - When breakout candle is more than 1 ATR from breakout candle open.
a - Enter 1st trade at candle close with ½ position size.
b - Enter 2nd trade with a pending limit order that is 1 ATR of breakout candle open.
c – Price should pullback to that pending limit order for 2nd trade.
d – If Price returns back into chart pattern close trade before SL is hit.
GBPJPY 4H 15M RABBIT TRAIL CHANNEL TRADING STRATEGY LONG TRADERule #1: Draw a channel on a 1 or 4 hour chart.
Rule #2 Identify If there is a Breakout on 1 hour or 4 hour chart.
Rule #3 Wait for a Pull Back on a 15 minute Chart.
Rule #4 After Pull Back on 15m, Make Entry.
Rule #5 Find a Stop Loss Placement.
Rule #6 Ride The Rabbit Trail to 50 pips with a TP Order!
Rule #1: Draw a channel on a 1 hour or 4 hour chart.
The first thing you need to do to get this strategy started off is you need to find a channel on a
four hour or one hour chart. Remember there must be two resistance and support points to
validate a channel.
This strategy can use many currency pairs. Make sure you search through all of them. Many say
that they “only trade EURUSD.” There is no reason for that..
Get in the charts and see for yourself! There are channels everywhere. This strategy will work
with any currency pair. The opportunities are endless..
Not too bad. So basically all you are doing here is drawing parallel lines on the tops and
bottoms of the price movement. This example hit a quite a few resistance and support levels
which means that when it breaks this channel it has the potential to make a huge move!
Rule #2 Identify If there is a Breakout on a 1 hour
chart.
The way you find the trade is to find a breakout of the channel that you drew on your chart..
In a perfect world the support and resistance levels will hold on forever..
But the world isn’t perfect..
So that’s why we have what is called a breakout.
This breakout happened on the top of the channel. So that means you will BUY.
If the breakout happens on the bottom of the channel then you will SELL.
Great! We have breakout candle let’s get in the trade and follow the rabbit trail to pip glory!
Rule #3 Wait for a Pull Back on a 15 minute Chart.
Why wait? Because the market is money grabbing machine, and they want your hard earned
cash!
You wait because sometimes the market does a “head fake” and turns against you.
So if you would have got in this trade right when it broke out of the channel you would soon
have got stopped out.
That is why it is so important to Wait for it to pull back.
This is where many people struggle. They see that it broke out so they want to click BUY or
SELL right now!!!
Think about the sayings you have heard since you were a child, “Patience is a Virtue,” Or “Good
things in life take Time”
Just be patient and wait…
This trade would not have burned you, but countless other trades would have!
Think about the pull back as the candle that closes towards the channel. So if the pull back is
above the channel you are looking for a bearish (red) candle. If the pull back is below the
channel you are looking for a bullish (green) candle.
*We only need one of these pull back candles on a 15 minute chart. Once this happens
move on to the next step.
Rule #4 After Pull Back, Make Entry.
We are getting so close to getting on our rabbit trail to make some serious pips!
Our lines are drawn, we identified the breakout, and waited for the pull back. It is now time to
make our trade.
The criteria to make an entry after a pull back on a 15 minute chart to enter a trade is that there
must be two 15-minute candles that support our trade.
If it is a BUY trade we want to see TWO bullish (up) candles after the pull back.
If it is a SELL trade we want to see TWO bearish (down) candles after the pull back.
Enter after the two bullish 15 minute candlesticks close.
So again, we WAIT for a pull back candle to close and then we need two BULLISH (green)
candles to close to many an entry.
Rule #5 Stop Loss Placement
This is probably one of the most important rules of the strategy.
You always need to place a stop loss somewhere for a reason. If you are throwing in stop
losses 5 to 10 pips from your entry order just because someone you read that somewhere, then
you are without a doubt treading some dangerous waters.
In a Buy The stop loss will be placed in the channel below the last support point.
In a SELL The stop loss will be placed in the channel above the last resistance point.
That way if it does come back in the Channel it will hit the support level and end up going back
up in a bullish movement.
Rule #6 Ride The Rabbit Trail to 50 pips!
The last thing you need to do is know when to exit the trade.
This strategy goes for a 50 pip target.
So when you make your entry, you calculate 50 pips take profit mark and place it.
The rabbit trail may be 2 hours, or could take as long as two days. You have your target so
really you have nothing else to do but sit back and watch your trade make you some money!
Stay in the trade and remember your rules. You are going for a 50 pip breakout trade!
EURUSD 15M 9 EMA 30 WMA TRADING STRATEGY LONG TRADEThese are the rules for a long trade signal using the 9 ema 30 wma trading strategy:
9-period EMA must be above the 30-periods WMA .
The two moving averages need to be apart from each other.
The first bar that closes below the 9-EMA will be used as the trigger bar for the buy setup.
Place a buy limit order above the high of the trigger bar.
Note* the bar that closes below the 9-EMA needs to remain above the 30-WMA for this setup to be valid.
(Opposite for short trade)
What is the 9/30 Trading Setup
Originally, the 9/30 trading setup was developed by Mike Burns and involves using a combination of two moving averages:
9-period Exponential Moving Average ( EMA )
30-periods Weighted Moving Average ( WMA )
In this case, the 9-EMA is our short-term moving average, while the 30-EMA is out long-term moving average. The 9 and 30 EMA trading strategy seeks to take advantage of the blank space created between the two moving averages.
The filter for the 9/30 trading setup can be summarized into a three-step process.
Like with many trading strategies we present, you can always use different “flavors” to get into a trade. So, you can also use chart patterns to fine-tune your entry.
How to Trade with the 9/30 EMA Strategy
In this section, we’re going to teach you how to effectively trade with the 9/30 EMA strategy.
No matter how simple this trading strategy is, you need to have a set of trading rules before you use it.
So, let’s talk about the stop loss and take profit strategy.For the stop-loss strategy, you can use the trigger bar high/low for reference.
For example, if you have a buy trade signal, you hide your protective stop loss below the low of the trigger bar. Alternatively, for a more conservative approach, you can hide your protective stop loss below the 30-periods WMA .
Here is a little bit of trading wisdom from hedge fund billionaire Bruce Kovner:
“Place your stops at a point that, if reached, will reasonably indicate that the trade is wrong, not at a point determined primarily by the maximum dollar amount you are willing to lose.”
Please note that the lower the time frame used the more price whipsaws you’re going to experience.
As a trading trick to avoid being caught in a whipsaw trade, make sure you add an extra buffer to your stop loss. This buffer will allow your stop loss to survive during false breakouts.
Moving on…
It’s easy to exit these types of trades via a trailing stop loss below the 30 WMA .
This exit moving average strategy has two benefits:
You don’t have to guess a possible take profit level.
You got to keep riding the trend until a reversal happens.
When to use the 9/30 Trading Method
The 9/30 trading method is a type of trend following strategy that seeks to enter the trade on pullbacks.
In this regard, the best time to use the 9/30 trading strategy is when we have established a trend.
The trend can be defined via the two moving averages as follows:
The bullish trend is defined when the 9 EMA is above the 30 WMA
The bearish trend is defined when the 9 EMA is below the 30 WMA
The strength of the trend can also be measured via the space created between the two moving averages and the angle of the moving averages.
The bigger the gap between the 9 EMA and 30 WMA and the steeper the angle of the 2 moving average is, the stronger the trend is. Conversely, the flatter the two moving averages are, the weaker the trend is.
In and of itself the “trigger bar” used to enter our trades doesn’t give us a trading edge.
The edge comes from trading in the direction of the prevailing trend.
After you have a moving average crossover and a strong trend emerges from it, that’s when you want to use this strategy.
Note* Avoid using the 9/30 trading setup in flat markets.
Moving forward, we’ll teach you how to implement more advanced trading concepts along with the 9 and 30 EMA trading strategy.
9 and 30 EMA Trading Strategy – Advanced Concepts
The 9 and 30 moving average strategy is a versatile trading strategy that can be used in ways you never thought possible. You can use this method for short-term trading, medium-term trading and long-term trading. It all depends on your preferred time frame.
Now, here is a powerful trading secret about the types of moving averages used in this strategy.
The combination of the exponential moving average and the weighted moving average gives us a wider spread between the two MAs. This is a key principle that makes this MA strategy work.
Now, you might wonder:
“How can we improve the 9 and 30 EMA trading strategy?”
If we add a better entry filter, we can gain an extra edge.
What do we mean by this?
Instead of using a bar that closes above/below the 9-period EMA , we can wait for the entire bar to be encompassed between the 9-EMA and 30-WMA. However, the downside to this trading approach is that you will get fewer trading setups.
Often times this type of trading setup can lead to explosive trades that never look back.
What are other ways to use the 9/30 trading setup?
As we explained earlier the edge of this pattern relays on the resumption of the trend.
So, what’s the simplest way to measure the trend direction?
A series of higher high followed by a series of higher lows defines an uptrend. In reverse, a series of lower highs followed by a series of lower lows define a downtrend.
So, we want to look for ways to capture these types of price structures. To do this we’re going to introduce the concept of multi-timeframe analysis.
Note* the advanced 9/30 trading setup works best in conjunction with the daily chart .
To better time our entries, we’re going to a combination of two-time frames as follows:
The daily chart to spot the trigger candle that closes above/below the 9 EMA
Downgrade the TF to 15-minutes (or 5 minutes) and look for uptrend and downtrend price structures
If you haven’t realized…
Here is the main reason why we use this approach:
We know that the daily range can be quite high. So, instead of using the high of the daily candle to trigger our entry we downgrade our chart and seek on lower time frames early signs of upward/downward price structures.
Secondly, this trading approach also reduces the stop loss needed for the daily candle.
Based on the 9/30 trading strategy we need to wait for the daily candle low to be tagged to trigger an entry. However, whit this new advanced concept we can enter the market early and capture more pips.
When we downgrade to the 5-minute chart, we can notice the pattern of lower highs and lower lows signalling the start of a downtrend.
Keeping in mind the chart setup found on the daily time frame, we can make a trade on the 5-minute chart when price breaks and forms a new lower low. When the price makes a new lower low after at least two lower highs it develops the price structure of a downtrend.
This makes an excellent entry method for the 9 and 30 EMA trading strategy.
Final Words – 9/30 Trading Strategy
In summary, the 9/30 trading setup is a very effective trading strategy to be used across all markets and time frames. Keep in mind that the power of the 9/30 trading strategy comes from having a prior upwards (downwards) trend. Traders should use this method as a pullback trading strategy rather than try to find reversals.
The key takeaways from the 9 and 30 EMA trading strategy can be summarized below:
You have the momentum power of the prevailing trend on your side
You only need to focus on the gap between the two moving averages
Offers you effective ways to manage your risk
Built-in trailing stop
Versatility to be used in conjunction with other trading methods
Last but not least, make sure you use effective money management strategies and position size to protect your capital. After all, your number one priority as a trader is to protect your account balance at all cost.
