Price Action on Daily & 4H Charts- No More Indicators, News or Smaller Time Frames

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]

  • Identifying The Candlestick Patterns that Form Consolidations

-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

1 Like

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

  • Overall…annual target is at least 100% annually…

…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.

Would a sell order w/ TP at 113.619 for USDJPY be profitable at this point?

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

@Temmytahyur

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.

  1. Downtrends and Downtrend Lines

  2. Consolidation Setups

  3. False Breakout Reversals

  4. 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.

  1. Close all Charts below the 4 Hour

  2. Have only the Daily and 4 Hour Charts opened.

  3. Focus on Trends and Consolidations in identifying trading opportunities.

  4. Practice identifying and correctly drawing Trend Lines and the main types of Consolidations

  5. Become familiar with the Candlestick Signals that provide the best entries with little volatiility.

  6. Practice trading first on a demo for several months before going back to live trading.

  7. 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

1 Like

@triniatlarge

Hey Triniatlarge! How goes it neighbour?

My Stop Losses are placed either on the 4 Hour or 1 Hour depending on the situation.

The Risk is kept to less than 2% in most cases, but in rare cases, up to 3% when I am targeting larger ranges.

In Pips, it can be anywhere between 20 to 50 Pips depending on the Currency.

I dont use or recommend Trailing Stops since I cant be sure if the market will temporarily pullback before resuming the move. I dont want to get in the way of the markets temporary reversals at the cost of missing out when it finally resumes the trend in the dorection of my target.

However, if the market apppears to be taking too long to hit your target and you have a identified a new Resistance/ Support formed, then you can manually move the Stop to this area.

Regards

Duane

Hi FxRipp, I have also similar situation with my day job as you have described. So I have also plan to backtest based on 4H and daily. But for now what I realized is stop loss value huge, so TP in order to get just even 1:1, most cases price is going close to TP, but not hitting and going back and hitting Stop loss. how is with your trading?

Hey Nikius

How large is your Stop Loss in Pips or in percentage terms? What is your average target in Pips/% ? What strategy do you use/planning on backtesting?

Your challenges are the same ones that led me to the strategy I now use.

  1. Risk 2% to 3%

  2. Target 6% to 10% Per Trade

  3. Trade 1 to 2 setups per week

  4. Enter using Daily Candle (5pm EST) or 4 Hour Candles

  5. Use Entry Orders when necessary .

  6. Hold trades for 3 Days.

This allows you to trade just a few times per week at predictable time intervals, while aiming for large trading returns.

I will be showing the main aspects of this trade for free in this thread, which come from my new Trading Manual.

The only problem is the large risk. But in the 2 years since I been testing, most have required 3% risk using 1:30 leverage.

But the benefits of the strategy outweigh this disadvantage…

  1. Setups have a High Probability of being Successful

  2. No need to trade everyday

  3. No need to watch charts.

  4. Large Returns and wide Risk /Reward Ratios

Duane
Swing Trading Master

Hello DRFXTRADING,

First of all, let me thank to you for your effort to create such nice thread with a lot of useful information. So, my stop loss starts from 20-30 to 50-60 pips depending on pair and my SL levels mainly based on 4H. As I use daily candles to find a direction and levels, then 4H to define an entry. As Im beginner my risk % is for now only 0.5% as Im still struggling to get profitable.

Well I think the first thing you should do is trade on a demo…if you are trading live. If you are already on a demo then great

Get profitable on demo with a confirmed/tested strategy for around month before trading live. Make sure it satisfies your conditions based on

  1. Amount of time you can dedicate to trading

  2. Your personality

  3. Risk Tolerance - maximum risk % you can manage without it stressing you out ESPECIALLY if you have to leave it overnight.

  4. How long it takes for you to recover from a trading loss. Very important as you want to space out your trades to give you time to recover so that you remain objective for the next trade. Very important to avoid REVENGE TRADING!