Not sure if I understand completely but when the price was below the red line yesterday, I should look for it to rise above it today. Do I have it correct?
Price will spend most of the time between the lines. When it goes outside the lines look for higher lows or lower highs on a 5 min chart that are moving in a direction to bring price back into the 2MA on the daily chart. You have to watch PA on a 5min chart and its really a discretionary entry. You are not waiting for a candle to close or any other signal on the daily chart when price is outside the MA’s its “overbought” or “oversold” take advantage of that situation. By watching many pairs many potential trades develop in a day. Often trades will develop in pairs with a high correlation positive or negative be aware of this fact and size your trades appropriately.
Of all the simple methods I have looked at this one is working the best for me:D.
I will lay out how I have been using this its a little different than Ruilima22.
I trade on OANDA I chart with a MT4 demo. I have 10 pairs set up to watch.
I picked the 10 with the lowest spreads at my broker.
I have a daily chart of each pair with the 2MAs. I look at each pair if price is outside the MAs on any of the pairs I draw at the level price crossed the MA. The line is approximate I draw it on the daily chart its not used as an important price level once its drawn I just like to see it on my chart. Then I drop the chart down to a 5min the 2 period MAs are now on the 5min chart.
I will use a short trade as an example. I watch the MAs on the 5min when they start to slope down I wait for price to be at or above the high ma. Thats my entry, usually price will clear the spread pretty fast. I try not let a trade go negative after it breaks the spread. If I have to close a trade at 1/2 pip profit and reenter when price gets back to the high MA that’s ok with me. If price never clears the spread I have a money management system I use to decide when to close trades. its posted around here somewhere. I try not to let a trade go very far against me I do use stops but they are outside of the point when I will manually close a trade.
I exit (profit) when price starts to move back against me. If price goes 10 pips my way it might move back 5 or 6 or more before it goes further my way. I will bank the 10 or what ever I can get when price stalls. Then wait for my entry again. On my OANDA chart I have a 20:2 BB I call it quits on reentering when price on the 1hr makes it near the lower BB. The way I do this I have to watch the open trades. I have bad luck or no skill at setting TP and SL and walking away:p. This has worked very well for me.
one more thing. when I drop a chart down to a 5 min I draw an arrow in the direction I am waiting for the MAs to slope. When I am looking at 4 or 5 pairs waiting for entry signals its easy to forget which way I am trying to go and its not always apparent on a 5min chart that’s zoomed in.
I like to look at the daily charts to get a big picture(kind of funny going from a daily to a 5min chart but its working;)) that’s why I am not using the indicators posted for the 5 min chart. Hope I don’t cause any confusion about the method I just thought I would share a variation that works for me. I am basically scalping on a 5min chart in a direction and at a price level that is dictated by a daily chart.
this is a short trade situation 5 min chart
Red line = lower highs
blue horizontal line = high daily 2 period MA when price is above this line look for short opportunities.
blue sloped line = general direction of 2 period MAs on this 5 min chart eyeballed with varying degrees of accuracy. This is harder to draw or guess at when you can’t see the future like I can with this example;)
red circles = some points when price is near the top MA, might be good opportunities to go short.
If you want to go short and you want to make back the spread back fast wait for the MAs to be sloping/moving generaly down and enter when price is near the top MA. This is Bollinger Band 101 just with 2 MAs. I don’t draw this stuff on my charts when I trade but this is some of the stuff I watch for.
First try. Top row indicates when high is above the average of the high or the low is below the average of the low. The bottom row indicates if the average of the close is up or down.
I forgot to explain the comment. :eek: It is the daily info: open, high, low, close, pivot price, range and distance to open. There is an input switch to turn it off in case you don’t want it on your chart.
Shr1k this is fantastic, its really made me alot more confident with this system, just couldnt get the timing right, but your methods really helps, thanks
Now all i need to figure out is how someone in a full time jobs gets the time to follow this system, I’m finding myself eager every weekend to get on with it, after some review, but on the weekdays missing all the overbought and oversold signals on the daily charts due to work!! I’m i missing somethings here? Or do people stay up for this system?
Hmm maybe need to figure out the best times for the currency pairs to watch the daily charts…
Someone must have an alert systems underway with this methods
I just looked through the charts their are a lot of price gaps out side the daily MAs right now. I don’t have time to trade at the moment. Looks like some nice opportunities may come for those that are trading.
Make some pips!!!:D:D
