Introduction
This forex trading strategy is for persons with day jobs and want to earn a extra income at nights without the hassle of trading in the day. This gives the flexibility to grow your account without pressure until you can trade full time.
Trading takes discipline and time and is not a get rich quick scheme. It will take effort and discipline to be successful. There is no 2 ways about it. If you think you can trade for a living after 1 week or so of trading this blog is not for you. But if you want to consistently grow your account until that happens then join me for the ride.
The Strategy Revealed
Indicators/Market Structure
Modified Bill Williams Alligator Indicator (Do not show the color for the 13 EMA)
8 EMA
Fibonanci Tool
Support and Resistance
TimeFrame
Daily
Explanation
I find that the daily chart is best time frame to use for trading price action setups. I know some people like the fast pace and rush of lower time frames and the misconception that you can only make good returns trading lower time frames.
The daily chart will give you the time to analyse your charts and make the best entry and will limit over trading which is the kryptonite if you want to become a super trader.
The strategy focuses on 3 time proven price action setups. Namely:
Pin Bar
Inside Bar
Engulfing Candle
These are all price bar candle stick patterns which I put context around for confluence and filter. So you may find that the context how I use these setups may be a little different from what you might be accustomed to. So enough blah blah here we go....
Buy Pin Bar Entry
8 cross alligator aligned up.
Pin bar bounce off 8 EMA.
Add the fib tool to the pin bar.
Enter at high of signal candle. 100% fib level.
Stop Loss fib 38 %, Break Even 200 % and lock in ½ SL. Take Profit 261%.
Close if price close inside EMA zone.
The picture below shows a typical setup.
As you can see the the sky blue 8 EMA is crossed above the modified Alligator and a pin bar bounce. We took the entry because if you look to the left the 200% break even level was just at the previous resistance or swing high. So assumed if price stalled at that level we would at least make a little profit. The trade worked just fine.
Sell Pin Bar Entry
The reversal of the buy entry. See the image below.
As before the emas crossed downward with a pin bar bounce. Support to the left was just at the break even 200% level. So we entered and got our target. Why did I mention support level? Well I'm glad you asked. This is the level where price may stall or reverse you want to ensure that when you enter your trade has the opportunity to at least get to the break even level before reaching a prior swing point. It is no guarantee but you just want to put the odds in your favor. As we know trading is just a game of probability. You will win some and definately lose some but with a positive risk/reward ratio you will be on top at the end of the game. With this strategy you will.
In subsequent posts I will outline the details of the other 2 setups. Until then, happy night time trading.