I don’t look to trade candle patterns or M and Ws what i look at is waves not 123 or abc or any other patterns.
The banks move the market in waves over the course of a week so as an EG they will move the EUR/USD 300 pips long over the course of the week after this they will move the market down its these waves i look to trade if there happens to be a candle pattern or a M / W formation near the start of one of these waves then this is added to a list of 3-4 things that strengthen the decision to pull the trigger the other things being S/R levels / round numbers, 20/80 levels.
To exit a trade
The EUR/USD moves on AVE 90 pips aday so that is the traget for profit so it depends where i get into the trade. I use a 20 pip stop so i need 1/2 R/R so with 20 pips i need at least 40 pips profit or i dont take a trade. So i look to take 40-90 pips on a trade.Once price has moved 25 pips i move my stop to B/E and leave it until i hits target.
Well price did reach the pull back an ran to target for 50 pips i did miss the trade as i took the euro instead here is shot of the trade below.
We also finished the 2nd day training in the live room and we now have live charts see below so we look forward to next week please feel free to join in.
Today we have a holiday in the US so we need to make our money in the london session also tomorrow is the ECB rate desison and the rumor is a possible .25% rise so the eur/usd may be in choppy consolidation all day like the last 2 days.
Yesterday in the training room we missed a 50 pip move by 1 pip in the afternoon, i did take a trade in the morning on the euro and pound for around 45 pips.
So today because of news and holidays there is no clear direction on the euro it could go either way so i would need to see a move to the upside in order to short at around 12627 area or a move to the downside in order to go long at around 12560 area.I will look for 40 pips profit either way.
Well yesterday was not great as trade Opportunities came in the afternoon right at the time when news came out about the banking scandal in the uk so took a small loss on a trade (should have stuck to the plan)
Well today more news out on the euro with the rate desision out at 12.45 today european time so be carefull
EURO/USD
Bias today is to the downside.
Would like to see a pull up to around 12557 area then a move down to 12500
GBP/USD
Bias Down
Would like to see the pound pull back to 15620 area then move down to 15576
[B]How to read the market[/B]
Most people in trading forex don’t understand how the market works,
So understanding how the market works is important. Long term the banks cannot manipulate the market but on a daily basis they can and do.
How?
Because of indicators these allow banks and market makers to no where we have our stops when we are likely to take a trade and what we are likely to do for example chart patterns like triangles, wedges, moving averages, macd, stochastic’s these allow professional money to see what we do and how we think.
So how can we stack the cards in our favour, the banks will tend to do the same set ups over and over again as I said at the start of the thread they cant just press a buy button so they have to do certain things each day before they can enter a position. If you no this information then it’s possible to anticipate their moves and follow them.
So how do they work?
They have to build up their orders this process is called accumulation this is when professional money starts entering positions which takes time with the volumes they use. If they don’t have enough orders they will need to force retail trades and others into making decisions about placing trades opposite to theirs.
Next is the Manipulation process
Each morning after the Asian session which will finish around 6.00 am GMT most positions have been built up. Next between 6.00-7.30 the market will move in one direction higher than the last 2 hours, this move is to knock out stops and give traders options for a trade in the wrong direction to the main move it can be 3-6 pips or 20 pips then at 8.00am GMT the London open, London will do the same a larger move 20-50 pips in the opposite direction to knock out stops in the other direction and to make you think this is the main move only to halt the move and go the other way this will take us to 1.30 pm GMT when the US market opens and they have there own plan to take over and join London to work together to profit until the close.
This plan works with variations of it each day every day since the market began
It’s never changed.
[B]Next time we will talk about Patterns to look for
If you would like to learn this method of trading contact me below
Took the GU trade today, shorted @ 1.5545, currently it’s looking very healthy
Also, I really enjoyed the last post you’ve made, they really were an eye opener. Thanks a million!
Also what I want to say that a bias the James is posting here every day are hit the most of time. Also his live trading room is really good and You can learn a lot from him. Thank You. My Skype username is Technodiscount
