Its pretty simple actually:
I use this during the London and NY session
- if price is riding along the 50EMA, with no clear direction then I don’t trade with this technique.
- if price is trending up or down on the 15 min TF (which should be pretty obvious) then i wait for a candle to touch / pierce the 50 EMA, typically then I drill down to 5 min TF, to optimize my entry and set order. You can call this buying the dips and selling the rallies.
- Trade management:
- at +20 pips move SL to BE
- I always trade multiple lots, and for the GJ at 50 pips I close off 1/2 the order, move the SL to +10pips for the balance of trade (this might happen on the next candle or two so you have to be diligent).
- As price never really goes straight up/down, there’s usually 2-3 GOOD trade opportunities per session (50pips+).
- As the NY session closes, don’t place anymore trades and manage the ones (if you still have some open).
I don’t really rely on indicators at all, though I do use them to look for divergence. You will find that price always returns to the 50 EMA, its like a magnet…
So patience is really key, you have to wait for the price to come back to your desired level.
When applied properly, and as you gain familiarity with the pair, you will see just how powerful it is.
Of course this like any other technique is not 100%, so practice good money management. I use 2% risk over 40 pips, so when you make ~250pips (shorted 142.69 closed @140.00 - left another 70 pips on the table:mad:) as i did this morning, tell me what kind of a return is that? Some trades, you’ll reap hundreds of pips others barely 50 and sometimes 0 or a loss.
I can say I get stopped out at BE alot more often than at -40pips.
Try it out, demo it for a month and see what happens.
The fellow who taught this to me (a trading master) named this “the simple account doubler” lol