Hey GJ,
GBP JPY actually moved bullish last couple days, but will start to go bearish in next few days…
Looks to be forming a Pennant on Daily Chart based on the Candles formed so far. Based on the pullback starting on Daily Chart and the sideways movements now seen on 4H Chart, looks like its starting to transition towards a downtrend as it begins to U-turn to head back to Support. Trading Short over next few days once that starts gonna be your best bet…
Hey Daniel,
Yes its going great, cant complain.
Hope that demo gives good results. Not a fan of EAs or anything statistical, but to each his own.
All the best.
[B]
Duane
DRFXSWINGTRADING[/B]
Not sure I understand.
Are you saying the lower time frames have more moves within a 4H period? True.
But how many of those moves on the LTFs can you [B][I]actually[/I][/B] get given the following problems…
The faster & more [B]Volatile[/B] nature of the LTFs.
There are [B]many more[/B] “False Signals” on the LTFs than on a 4H Chart
You dont know exactly [B]when[/B] to check for the right signals on the LTFs, forcing you to stay glued to the charts[B] all day[/B] compared to just [B]a few minutes[/B] a day on the 4H and Daily Chart.
Moves/ Profit Potential per trade on the LTFs are [B]much smaller[/B].
[B]Duane[/B]
GBP JPY FORECAST RESULT
As predicted in the graphs in a previous post here, the GBP JPY started to decline towards the Uptrend Line on the 4 Hour Chart as the pair begins a new Downtrend in favour of the JPY over the next several days…
ANALYSIS AND FORECAST
DAILY CHART
4 HOUR CHART
MOVEMENT ON 4 HOUR CHART AS FORECAST
FORECAST & ANALYSIS VIDEO
The reason it was expected to decline is because the Daily Chart is gradually completing the formation of a Pennant Setup. It was expected to therefore form a 2nd Resistance Point to complete the Resistance Boundary as it heads back to the Support Boundary already formed.
The ability to make this type of accurate forecast comes from being able to recognize certain Candlestick Patterns that lead to the formation of these Consolidation Setups. This allows us to spot when reversals are likely to take place to avoid trading losses and take advantage of them by trading these moves while the setup is being formed.
Now, although my Swing Trading Strategies don`t permit me to trade all of these moves such as this GBP JPY one for various reasons - (some too risky, too small, or require large Stops), the ability to recognize these patterns across all Currency Pairs gives you a tremendous skill that is in high demand and very rare in Forex Trading - the ability to Accurately Forecast the Market.
This is the most fundamental of skills that you need in order to be successful. It is the first step in being able to determine market direction and therefore the profit potential of these moves using your trading strategy. Even though I prefer and HIGHLY RECOMMEND the use of Swing Trading, the ability to predict the Daily and 4 Hour Charts is also of tremendous value to Day Traders. Once you know where the market is gonna be headed and by how much using the signals of these time frames, you´ll know exactly how much you can target each day and be better able to get out before reversals take place.
Naturally, it will require several months of practice to fully master this skill, but once you do, you`ll be a lot more confident that your trades will hit their trading targets with a Higher Rate of Success, regardless of the trading strategy you ultimately decide to use.
Duane
DRFXSWINGTRADING
in your first post to the thread you mentioned people can PM for more info on the methodology, is this still teh case?
Am very convinced dear. Am looking forward to the methodology. Thanks
Yes it is…
Thanks Mike.
SUMMARY OF RESULTS FOR 2016
Hey guys, how´s the trading been going?
As you can see from the Chart, after the very aggressive start, the gains became a little bit flat in the middle of the summer, with the Returns stagnating at 25% during this period. This coincided with the period of cyclical illiquidity in the markets and also reflected some fine-tuning of the strategy to go after more frequent trades.
These gains translate to a very good Monthly Returns so far. I would say that after an excellent start that provided significant returns in January and February, it has now leveled off to rates that are consistent with many Swing Trading in general.
For most of 2014 to 2015, most of my trades have targeted moves that offered at least 140 Pips to 200 Pips. However, I have now realized that many setups offer good trades of 100 Pips a lot more frequently, which often hit their targets within just 1 or 2 days and sometimes hours after entry. This compares to the average holding period of 5-7 days for the larger trades. What this means now is that with the combination of these two types of trades, larger and more frequent gains are now more likely to be realized within a very short period of time.
The Chart below shows the summary of trades made this year. As you can see in the Duration column, most of these trades have been captured within 2 days. This means I dont have to wait that long for trades to be hit which translates into less anxiety and uncertainty which can prevent trading success.
For persons who have been used to Day Tradng, these smaller holding periods can offer an excellent way to transition to Swing Trading which can often feel like a very frightening leap to take given the need to hold trades longer. However, once you get accustomed to this style of trading, it will longer be intimidating to hold trades for this long.
Another great benefit of Swing Trading is that trading is done an average of 3 times per month. This prevents you from overtrading and allows you a lot of “breathing room” between trades to remain objective. Revenge trading is an Ugly Demon that gets into our heads whenever we lose at Day Trading, causing unnecessary losing streaks as we become more emotional. By only trading when it is necessary, you can be better able to target the best, most profitable trades, while minimizing your portfolio´s exposure to market volatility.
__________________________________________________________________________________________
So in summary, while this isnt your perfect “Dream” or “Holy Grail” strategy - whatever that is - it offers an excellent example of how Swing Trading can provide consistent returns over the Short and Long-Term while preserving your capital against emotional trading and market turbulence.
Even though we Can trade every day in a market thats open 24 hours daily, it doesnt mean that we Should. This is a very dangerous market with high failure rates due to the extreme levels of intra-day volatility. Even some Weekly movements that Swing Traders target can become very dangerous as well. It therefore means that the less frequently you trade, the more you can stay away from getting caught in these traps of volatility and stay focused on the Best, High-Paying Trades every month.
Regards
Duane
DRFXSWINGTRADING
GBP CAD 175 PIP TRADE RESULT
Hey all, how goes it?
The latest trade provided a 175 Pip gain on the GBP CAD as part of the recent decline. This was taking place within a Range Setup that was being formed on the Daily Chart.
A pair of Double Tops and a break of the Uptrend Line were the signals indicating the start of the Bearish Move. I then waited until the 4H Chart provided a Setup & Signal to take advantage of the expected downtrend.
Since these were deemed strong enough, I decided to trade it. I placed my Stop Loss above the high of the U-Turn and targeted an area where I believed it would head towards before pulling back- how did I know it would pullback there? (Trade Secret)
Below is the Video Analysis of the Trade Setup.
As you have seen in this video, the main elements of the trade were;
[B]
-Trading these Waves with Strong Setups And Signals
Double Top Signals
Breaks of Uptrend Lines
U-Turn Signals & Counter Trend Line Breaks
[/B]
I believed that the trade would have taken 5 Days to hit its target but after only 2 days, the target was hit…
The main thing about this that you´ll notice is that the trade was exited just ahead of the start of a sharp pullback that lasted 3 days. This would have easily taken out the Stop Loss had I not exited at that area…
Not only did this confirm the accuracy of the Exit Strategy but it also showed that it was in sync with the Strategies of the major Currency Traders around the world.
So being able to identify when Consolidations are being formed with certain types of Candles allows you to be able to take advantage of these waves. Once we see these signs and can spot the strong Daily and 4H Signals that start these moves, strong trading gains are possible.
MAIN ELEMENTS OF TRADE
[B]
Spotting & Trading Waves that Form Consolidations
Trading Strong Daily & 4 Hour Chart Signals
Appropriately Setting Trading Targets to Avoid Pullbacks
Being Disciplined to Hold Trades over Several Days[/B]
Did you trade this move as well?
Questions, comments welcomed
Thanks
Duane
DRFXSWINGTRADING
Hello Duane,
Thanks for these post, very educational! Do you trade all currencies or have a select few to analyze?
Best,
Jose Maldonado
Hey traders
Hey sorry for the long abscence…been testing and creating new strategy.
I analyze around 27 pairs each week to then choose 1 or 2 to trade each week.
Just to bring you back up to speed on the latest
New and more aggressive approach tested and created between Nov 2016 and Jan. 2018.
Since then…16% Return earned on my Live Account…from just 13 trades with just 4 losses
…with the 14% target hit with this latest trade on the AUD JPY…
There are two main strategies
Targeting 50 to 70 Pips over 24 Hours
Targeting 100 to 200 Pips over a few days
Many times it ends up being 70 to 100 Pips
Most involve now trading within Consolidations because the targets are much clearer…Support/Resistance comapred to Breakouts which are becoming less predictible/ more volatile.
If the trade has not hit its target by the end of the specified Holding Period it is closed. Regardless of the floating profit.
This is a way of imposing discipline and not being greedy. So sometimes the market will hit the target after I have closed the trade. But many times I avoid reversals as well.
So this is the new combined approach. Overall, it will have the following advantages that will make it sustainable…
…supported by these statistics which show a 70% and 66% win ratios…
Have a look at this Video analysis of the most recent trade
…and let me know what you think.
Duane
DRFXTRADING
hey thanks for the info. I would love to know more about your methodology
Well the basic aspects are shown here and in my other thread Video Analysis of the Daily and 4 Hour Charts.
More details of it including how to use it etc… you can email me for that. My address is in my profile. Placing it here would be considered soliciting.
Regards
Duane
i wanted to clarify…the 4 hour charts are used to determine entry points and the daily for the s/r levels? or did i totally get that wrong
No…no Support or Resistance used for Entry. Just as targets. Candlesticks used for entry. Daily used for Direction…4H for entry.
Hi, i very much use price action but i realise that swing trading might be my cup of tea. However i am trying to figure out what is your initial stop loss and incorporate trailing stops. I ma interested in the initial setup
Please i need more on the methods… really tired of day trading
Hey man, sorry for the late response.
Any improvements?
I was focused on testing my new strategy over the last few months that now targets 6% to 8% Returns Per Trade, to complement the one that targets 3% to 5%.
These larger Returns will allow for faster turnover and larger Monthly Rates of Returns.
Yes I agree with you. Day Trading is not recommended. It can be profitable but it eventually becomes tiring.
In fact, this recent 6.5% Rate of Return on the EUR CAD showed how Large Trading Gains are possible from the Forex each month, when we ignore the Smaller Time Frames and enjoy the Stable and Reliable Setups offered by the Larger Charts.
Check out this preview of the Full Video Analysis which will explain how I used the following Technical Factors to capture this trade.
Downtrends and Downtrend Lines
Consolidation Setups
False Breakout Reversals
Support as Trading Targets
The full video will also use the EUR CAD trade to show how to solve these main Trading Challenges that the Forex presents every week…
Here are my recommendations for switching from Day Trading.
Close all Charts below the 4 Hour
Have only the Daily and 4 Hour Charts opened.
Focus on Trends and Consolidations in identifying trading opportunities.
Practice identifying and correctly drawing Trend Lines and the main types of Consolidations
Become familiar with the Candlestick Signals that provide the best entries with little volatiility.
Practice trading first on a demo for several months before going back to live trading.
Aim for large Pip Ranges of between 70 to 100 Pips and up to 200 Pips. These will offer large Rates of Returns but will require a greater level of Patience.
Regards
Duane
