Forex Mom

Archive for the ‘Simple Strategies’ Category

Let’s start with an uptrend. As we are going up, the candles are waving up and down. To find a good entry to go up, we want to wait for the candles to go down, and start going up. After we see 3 candles of retracement, we draw a counter trendline (down) and wait for a good bullish candle to break this. We prefer a candle that is at least 75% body (25% wick).

We put our stop 10 pips below the low. We use fibs or support/resistance to determine our limit.

Or you can set a very high limit (1000 pips) and move the stop loss every time a higher low is formed. Then you can ride this wave as long as it lasts (surfing the forex)!  HANG 10!

Trading counter trendline breaks in an uptrend.

Let’s go to the downtrend next. As we are going down, the candles are waving up and down. To find a good entry to go up, we want to wait for the candles to go up, and start going down. After we see 3 candles of retracement, we draw a counter trendline (up) and wait for a good bearish candle to break this. We prefer a candle that is at least 75% body (25% wick).

We put our stop 15 pips above the high. We use fibs or support/resistance to determine our limit.

Or you can set a very high limit (1000 pips) and move the stop loss every time a lower high is formed. Then you can ride this wave as long as it lasts (surfing the forex)!  HANG 10! (Can you hear the Beach Boys in the background… listen very carefully).

Trading the counter trendline break in a downtrend.

Trendline break from the sell zone into the buy zone

When the trendline is broken, wait for the first decision candle AFTER the candle that breaks the trendline.

Make sure this decision candle is large (not small) and the body of the candle is at least 75% of the candle (25% wick). The wick may touch the trendline, but the body of the candle cannot. Then enter at the close of this decision candle.

Place your stop 15 pips above the high (going short) or 10 pips below the low (going long).

Place your limits based on the fibs or support/resistance.

Never forget equity management! Do not risk more than 50 pips in a trade.