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

[DRFXTRADING]

Hey all, back with you.

Latest trade gave us a 149 Pip gain on the EURO USD as it headed to Support of Pennant on Daily Chart.

This was the overall setup as seen in this chart and the Video Analysis

Entry took place using the 4 Hour Chart, with the target set to just above the Support of the Daily Pennant.

After a few days, target was hit.

Overall, Return from these Strategies is now 25%

This trade continues to show how we can better results by focusing on the larger time frames. These offer larger movements and more reliable signals to take advantage of these trends.

Stop Losses should be placed at areas that will protect trades against temporary pullbacks before our targets are hit. Support and Resistance and Trend Lines - once strong enough - great places for Stop Losses.

MAIN TECHNICAL HIGHLIGHTS OF TRADE

[B]

• Trading Within Consolidations

• Using Strong Daily Candle Signals

• Using Strong Stop Loss Areas on the 4 Hour Chart

• Waiting Patiently Until Target is Hit

• Strong Gains Possible with Swing Trading[/B]

Regards

Duane
DRFXSWINGTRADING

[keydcuk]

Hi Duane,

I had left the Forex community for a while and had not been on this website for a while. Glad to see you are still posting your trades every so often. Currently I am a bit busy looking at EAs and helping programmers forward test their creations etc but have still not seen anything in an EA that compares to manual trading. Just demoing at the moment but as I was chatting to you earlier in 2014, I thought I would just pop a post on here to say “Hi”

Hope you are successful in your trading!

Many Thanks & Best Regards,

Daniel

[GJscalper]

If swing traders would realize how many variations of the candle there is, they would then start to trade the lower tf.

You can have a 110 pip 4hr candle and have more than 67million different price action sequences within a 5 min period which so imgine on a 4hr candle.

[bobmaninc]

Statistical Indicators are the most widely used tools in trading, but most are based on past price data. This makes them lagging in nature and inaccurate when providing entry signals. Short-term economic data are also used to support technical-based trading, but most are often quite volatile and lead to erratic, short-lived reactions. Since the major economic factors that actually lead to strong currency movements will be reflected on the Larger Time Frames, using these signals for market direction will always be the better decision for traders.

I am not going to derail this thread just want to make a statement as I see this alot and even agree to some extent. I just want to point out that price action itself is nothing more than a indicator. As you said a indicator is based off past price movements and lags price well so does a pendant, hammer, doji, even support and resistance. They are all based off the left side of the chart (past price movements) and lags current price. I am not saying the price action will not make you a profit as I use it myself just that indicators and price action are made up of the same elements. Using what price has done to determine future price direction.

With the above stated after going through the thread seems like a decent thread I will be tagging along and see if I cant add anything actually productive to there thread.

[GJscalper]

Anyone looking at GBP/JPY right this moment?

[KJBFX]

I am interested in your swing trading methodology, send me more information about it.

[DRFXTRADING]

Hey Bob, all views, criticisms welcomed here… Its an opportunity for me to show the advantages of my strategy and explain aspects of it to those who wanna use it.

Yes, you have a point about the “lagging” and “indicator” aspect of Price Action. But of course, when I´m talking about Indicators I´m referring to statistical/numerical indicators like MAs, RSIs etc.

With Candlestick Signals, even though they do represent past price action, they allow you to catch moves much more quickly. So for example, if a 4H Candlestick appears that tells us what happened in last 4 hours and whats likely to happen in the next 16 to 24 hours, we can enter immediately at that candle to take the ride to our targets as soon as it starts. But with indicators, they take a longer time to give the green light because of the time it takes for them incorporate the new prices from this new Candlestick Signal.

So the “lagging” that I am talking about is the time difference between when the 4H Candle gives a Signal and when the Indicator actually gives the go ahead to trade and not the use of past prices.

[DRFXTRADING]

@KJBFX

I am interested in your swing trading methodology, send me more information about it.

Hey man,

Its available on my website which I`ll send you in a private message or by emailing at shepherdduane@ gmail.com. I also have some PDF documents for you to look at to help you decide about using my Methodology.

Essentially its about using Candlestick Signals and Patterns on the Daily Chart and 4H Charts. I target 100 to 200 Pip moves using 5 different Swing Strategies that now target more frequent moves each month. Depending on the Strategy and target, the Holding Period will vary from 2 to 7 Days to maximize on the amount we can get from the trade while not staying in too long to avoid pullbacks.

This last point is crucial to my strategy. Many strategies will tell you when to enter, where to place your stop loss etc, but fall short when it comes to telling you when to exit if target is not yet hit.

So far example, in this last trade on the EURO JPY, I was targetting 120 Pips in a recent bullish move on this pair last week…

This pair was expected to form a Consolidation and was gonna rally to create another bullish wave as it formed that setup. The Maximum Holding Period for this trade was set at 2 Days but at the end of this period, profit was only 25 Pips- much lower than the target. In obeying this rule, I exited the trade at this lower trading gain.

Now many persons who dont have this rule as part of their strategy would have been tempted to hold out for more- because after all, the market still looked bullish. But what I`ve realized over the years is that certain types of trades that target a certain number of pips take a specific number of days to hit their targets. After that time period is reached- regardless of whether target is hit or not- the market usually begins to pullback, which was the case a few hours later…

…and a few days later when it pulled back even more and would have take out the Stop Loss…

25 Pips is much lower than 120 Pips but much better than a trading loss.

So the Methodology plugs the holes left by other strategies by covering all the aspects of trading to ensure success. It targets the best trades using the most reliable signals while at the same time ensures that we are not greedy by establishing clear rules and guidelines to be followed.

[DRFXTRADING]

@GJscalper

Anyone looking at GBP/JPY right this moment?

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…

[DRFXTRADING]

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]

[DRFXTRADING]

If swing traders would realize how many variations of the candle there is, they would then start to trade the lower tf.

You can have a 110 pip 4hr candle and have more than 67million different price action sequences within a 5 min period which so imgine on a 4hr candle.

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…

1. The faster & more [B]Volatile[/B] nature of the LTFs.

2. There are [B]many more[/B] “False Signals” on the LTFs than on a 4H Chart

3. 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.

4. Moves/ Profit Potential per trade on the LTFs are [B]much smaller[/B].

[B]Duane[/B]

[DRFXTRADING]

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

[AEWelby]

in your first post to the thread you mentioned people can PM for more info on the methodology, is this still teh case?

[newmike]

Am very convinced dear. Am looking forward to the methodology. Thanks

[DRFXTRADING]

in your first post to the thread you mentioned people can PM for more info on the methodology, is this still teh case?

Yes it is…

[DRFXTRADING]

Am very convinced dear. Am looking forward to the methodology. Thanks

Thanks Mike.

[DRFXTRADING]

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

[DRFXTRADING]

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

[j102491]

Hello Duane,

Thanks for these post, very educational! Do you trade all currencies or have a select few to analyze?

Best,

Jose Maldonado

[DRFXTRADING]

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