Forex Trading Strategies

Revision of Forex Trading Strategy and Trading Criteria.

Before we move onto the ‘Fundamentals Series’, I revise most of what we’ve gone through in the technical series + revisit the criteria that I personally follow. Please break up this video into time segments.

For template downloads: http://www.connectwithshiva.com

Aim: Determine the trend, take the most suitable entry, collect a certain number of pips.

Criteria:

Determine Trend Direction
– Is price above or below the EMA 200 / 50?
– Is there a recognisable structure on the M15 chart?
– Is there a recognisable structure on daily chart?
– Is the market moving off technicals or fundamentals?
– Is the market creating higher highs and higher lows / lower highs and lower lows?

Note. If you recognise patterns/structures, determine where price presently sits, within the structure and it’s rules.

2. Ascertain Kill Zone (Location)
– EMA200, EMA50, EMA800 (In this order)

Note. If price has bounced off the ema50 twice in a row, always expect the market to break past it on the third attempt on it’s way to the ema200. Do not trade that until you’re more experienced.

3. Look for a CLEAR and recognisable market structure.
– On a downtrend:
– Double top formation.
– Triple top formation.
– Head and Shoulders formation.

– On uptrend:
– Double bottom formation.
– Triple bottom formation.
– Head and shoulders formation.

– Secondary setups:
– tweezer tops and bottoms.
– Structural re-test of EMA’s.

Note. Clearly study the behaviour of the candles in real time. Watch for behaviour that confirms to you the direction in which the market is going.

4. Candlestick Patterns
– Morning Star.
– Evening Star.
– Engulfing.
– Pinbar.

5. Confirmation Candle

In-line with point 3 and 4, the complete market structure and candlestick structure will provide a confirmation candle. The point here is to confirm that the market is indeed moving in the direction you’ve predicted.

6. Entry + Stop Loss.

You always want your entry at a point which will lead you into profit within the first 15 minutes. A tight entry will ensure a smaller stop loss. If you miss your entry, let the trade go, or wait for a retracement back to your ema.

The stop loss is the maximum amount of pips you are willing to lose if your analysis ends up being incorrect. This is a key part of money management.

What not to do!

Do not over trade!
Do not trade against EMA’s.
Do not trade from a lower ema to a higher ema.
Do not trade if you are unsure of it’s trend bias and the predicted move.
Do not trade the second half of NY or the first few hours of the Asian session.
Do not enter half way into a candle, unless it is in pull back.
Do not trade a ranging market.
Always wait for the market to complete structure.
Always wait for the middle part of the pattern to be crossed if the structure isn’t clear.
Always treat an EMA as a support and resistance area.
Trade only when you know the reason for the market movement.
Do not take late entries.
Do not trade when mentally, physically or emotionally exhausted.

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