Swing trading results- Price Action Strategy

Trading Discussion Trade Journals
1

The trade results that you will see here are based on a Price Action Methodology that focuses exclusively on the Daily and 4 Hour Charts. It uses Candlestick Patterns and Signals that provide high probability trading opportunities of 100 to 200 Pips. The time period of each trade ranges from a Day to a Week as the trends on these Higher Time Frames are a lot slower than those on the Lower Time Frames. The strategy takes advantage of the greater stability of the Higher Time Frames and avoids the use of Statistical Indicators and Economic News.

In a nutshell, it is a strategy that Rewards the Trader rather than the broker who benefits from the volatility and Stop-Hunting that take place ´accidentally` on the Lower Time Frames.

The main aspects of the Methodology are;

[ul]
[li]Identifying Market Direction using Trend Lines and Consolidation Patterns;
[/li][li]Using Candlestick Signals from the Daily Chart;
[/li][li]Using Candlestick Patterns and Signals on the 4H Chart for entry;
[/li][li]Aiming for 100 to 200 Pips per trade;
[/li][/ul]

The trades based on this approach have been done over the last 4 years of unusual activity in the Currency Market. They were traded alongside unsuccessful short-term day trading strategies on the 30 Minute Charts but as of January 2014, the focus has been entirely on the trends of the Higher Time Frames- with greater profitability. This blog/thread will therefore show the continuation of this strategy with the most recent results. All questions, comments and criticisms of the Methodology are welcomed here on this thread as well as privately.

The Charts from FXCM are used to identify the signals and patterns for the Methodology which depends on the New York Close Candle, while trades are executed using the Dukascopy Platform where I have my Live Account.

Let´s get to it.

AUD NZD

A trade on the AUD NZD was executed recently as the pair started a Bullish Breakout from a Range and a large Pennant Consolidation.

DAILY CHART


The strategy generally aims to get at least 100 Pips and a maximum of 200 Pips, but there can be reasons that justify an early exit. This was one of the occasions, leading to the exit for 70 Pips.


DAILY CHART


As you can see, the market pulled back a few days later, justifying the exit.

DAILY CHART


This strategy involves a lot of patience and discipline. One of the main guidelines is that the trader should NEVER look at the charts while the trade is still open. This avoids the temptation of making emotional decisions such as exiting for small gains or losses when the market becomes slower than anticipated. Someone who did not obey this rule is likely to have done so when the market moved sideways for 6 consecutive days.

DAILY CHART


The patient trader would have benefited from the last-gasp rally that took place on the 7th Day- lucky number 7.

In any strategy, one must always obey the guidelines established. This allows you to continue to generate trading gains over the long run from this very lucrative financial market.

DRFXTRADING

2

nice to see a PA trader one thing i need to way in on, how can you not check your charts when the trade is active, you may get a pa signal to tell you to exit? and because you have buried your head in the sand and got your fingers crossed that it will hit tp may got got stopped out when you exited with profit.

just my 2 cents

'best

darth

4

Buried head in the sand, fingers crossed…no man, I leave that to the Vegas gamblers.

I think that most strategies fall into 3 categories

  1. The strategy requires monitoring in order for it to work
  2. The strategy is still going through its testing/experimenting phase
  3. The strategy does not require monitoring for it to be successful

My strategy falls in the last category. If something is successful, in trading and otherwise, it means that when certain factors are in sync, the goal will be achieved on most occasions. Chances are when you monitor the trade, emotions will sabotage the trade, leading you to exit early as the above example shows.

The only monitoring that is done is at the end of the day when I check the platform to see that the trade is still open. This can be done without the need to see the charts or trading profit.

If the strategy works without the need to monitor it, then there is no point in looking at it. You just have to trust that it will work most of the time and accept the losses along the way.

1 Like
5

The recent 70-Pip trade made on the AUD NZD highlighted the main challenges faced by the typical Day Traders using the Lower Time Frames. This trade required entry at the Bullish Candle Signal that started a breakout from a Range and a large Pennant Consolidation on the Daily Chart. However, Day Traders would have encountered a more volatile picture on the smaller charts that would have severely limited their profitability during this Bullish breakout.

The charts below show the breakout that started the trend that provided the trading gain. Entry took place immediately at the close of the Bull Candle with the Stop Loss and Profit Targets set according to the rules of the strategy.

DAILY CHART - PENNANT & RANGE


DAILY CHART - BREAKOUT SIGNAL


In contrast to this fairly straightforward setup, many Day-Traders on the 30 Minute Chart would have faced a more challenging scenario. As we can see in the chart below, the Bullish Candle on the Daily Chart was actually formed by a Range breakout on the 30 Minute Chart.

30 MINUTE CHART


Many Day Traders would have avoided entry here, however, given the size and volatile nature of the candle. The large wick on that candle would also have suggested the end of the breakout, while the subsequent reversal and sideways pattern limited any possibility of a profitable trade.

Nevertheless, a trading possibility eventually appeared on this time frame in the form of another Consolidation breakout.

30 MINUTE CHART- PENNANT TRADE


Entry could have taken place at the Bullish Candle that broke Resistance with the Stop Loss at the Support area. Unfortunately, the breakout for this would have been limited to only 15 Pips ahead of the reversal a few hours later. For scalpers, this 15-Pip gain would have been a good trade, but for others holding out for more, breaking even or incurring a small loss would have been the result. Yet for others who may have held out in hopes of a turnaround, a total loss on the trade would have been suffered.

Following this period, the currency began to move sideways in a volatile pattern, offering very little in the way of tradeable setups. Those aiming for small Pips may have been able to scrape out a few more to add on to the 15 Pips. However, the sharp reversals and spikes would have made this a very stressful and difficult endeavour. Others aiming for more would also have been left without any opportunity to compensate for the previous losses.

The results from this type of trading over the long-run are often lower than expectations despite the attraction of the smaller charts. The greater volatility and the need to continuously monitor the market at all hours of the day can take their toll on a trader. For Swing Traders on the other hand, only a few hours are spent trading and analyzing the market prior to entry. Instead of aggressively battling a large number of candles at a time, only a few candles stand in the way between entry and profitability.

DAILY CHART- SWING TRADER BLISS


Trading can be a lot more enjoyable and profitable than what many are led to believe. If this is done using the higher time frames that Reward the Trader rather than the smaller time frames that Reward the Broker, long-term gains will be made. Spikes that come out of no where to take out our Stop Losses and unexplained pullbacks that reduce our profits can all be avoided by trading on the Daily and 4 Hour Charts.

Happy Trading all.

DRFXTRADING

1 Like
6

This latest trade based on our Price Action, Swing Trading Methodology provided 148 Pips on the Aussie Dollar over a short 4-day period. This took our total gain to 218 Pips in 2 weeks following the 70-Pip trade on the AUD NZD pair at the start of the month (see trade above). If this rate of gains were to continue for the rest of the year, we could actually see a triple digit rate of return for 2014 when these results are combined with previous setups identified by the Methodology.

The AUD NZD was one of the last pairs that saw gains for the Aussie dollar this month. Since then, the currency began to lose value against several of the other major currencies over the last few days. It was within this context that the AUD USD trade opportunity presented itself on Thursday September 11, 2014.

The setup was a bearish break of a large Pennant formed between April and September this year.

AUD USD - DAILY CHART PENNANT


The size of the Consolidation suggested that a breakout could continue for several hundred pips in favour of the US Dollar in the months ahead. However, based on our strategy and a specific technical aspect of this setup, a short-term gain of between 100 and 200 Pips was the more prudent decision.

Entry took place at the third candle that broke the Consolidation with the target set based on the criteria established for this type of breakout. The Stop Loss was also placed at a strategy-determined area to prevent the trade from being affected by spikes along the way.

DAILY CHART TRADE SETUP


After only a few days, the target was hit. Towards the end of the trend, the market actually reversed to the entry price with a Bullish Candlestick Formation. However, a large Bearish Candle shortly followed to take out that attempted reversal and give us our reward.

TRADE RESULT


LIVE ACCOUNT RESULT


The chart patterns and candles from FXCM are used to identify the entry signals while the Dukascopy platform is used for trades on the Live Account. The Methodology utilizes the New York Candle close of the Daily Chart as the basis for the Price Action strategy, which is best provided by FXCM.

This trend was always expected to provide large gains for the trader in a short time since breakouts from Consolidations always produce sharp movements. Nevertheless, if the trader was looking at the Pip count or the Account Balance on their trading platform, chances are he/she would have started to panic at the start of the bullish reversal to the entry price. If trading was also being done on the 30 Minute Chart, that sharp bullish signal combined with the Trend Line break and the Double Bottoms may have even convinced the trader to start going Long.

30 MINUTE CHART- REVERSAL SIGNALS


The net result would have been a much smaller profit compared to that which was offered by the market. Constantly monitoring the trade and using the Smaller Time Frames will always tempt us to make decisions based on emotions and our ego despite our best intentions. Trades that are objectively analyzed and executed can be easily sabotaged by the desire to always know what is happening with the trade.

Nevertheless, this habit is understandable and expected especially if you are transitioning to the Larger Time Frames. Most of us have been taught by trading companies and brokers to trade in a way that requires us to develop this and other bad habits. We have been led to believe that trading has to be done every hour and every day in order to profitable. This frame of mind will always lead to certain practices that generate an impatient temperament in us and cause us to constantly make unwise trade decisions. The best thing to do is to persist until these habits are no longer a part of your trading.

Alternately, one could open up a separate Demo Account, practice trading on the Daily and 4 Hour Charts and compare the results with an existing strategy on the lower charts. Over time, you will see the large difference in profitability and appreciate how unnecessary it is to monitor the trade.

DRFXTRADING

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7

The market-wide decline in the value of the Australian Dollar appears to be about to continue with the AUD JPY this week. The pair had recently attempted to break long from a large Consolidation on the Daily Chart, but has now become volatile above the Resistance boundary. If we see a strong Bearish Candle Signal that breaks below this Resistance, sharp gains for the Japanese Yen are likely to be seen over the next few weeks.

The Daily Chart below shows the Pennant setup and the short-lived Bullish breakout.

DAILY CHART - PENNANT BREAKOUT


We can also see that this was taking place in the context of an existing Uptrend, which should have provided additional support to that breakout.

DAILY CHART- UPTREND


Given the extent of the pullback to the Resistance, however, this breakout is likely to give way to a Bearish reversal in favour of the Japanese Yen. The start of this downtrend could take the form of an ABC setup or a small Consolidation breakout. In either case, if the Bearish Candle is strong enough to break below the Resistance, we could see a decline to 94,37 at Support and then lower to the Outer Uptrend Line at 91,77.

DAILY CHART- BEARISH TARGETS


This decline in the Aussie Dollar would be similar to that on the AUD NZD as well as the AUD USD where a trade was recently made.

DAILY CHART - AUD NZD


As the market continues to break out of these large Consolidation setups, hundreds of Pips will continue to be on offer for the sharp trader. With the right Methodology that maximizes on these opportunities, your Trading Account will continue to grow over the Long-Run.

How are you managing with these breakouts?

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8

100% RETURN JUST 9 TRADES AWAY

Between January and September of this year, several trades were made using my Price Action Methodology to generate gains of 150 Pips on average per trade. The most recent of these came from the AUD NZD and the AUD USD at the start of September which together provided a total of 218 Pips. If an investor or trader with an initial capital of US$100,000 were to use this Methodology as a means of accumulating large rates of return within a few months, he is likely to be able double his capital within 6 months with only a handful of High Probability Trades.

The table below shows some of the trades made earlier this year which represented a sample of those made over the last 6 years. On average, they required a risk of 105 Pips and provided an average gain of 150 Pips.

TABLE 1 - JANUARY 10 TO SEPTEMBER 17, 2014


The Methodology is such that these trades arise an average of 2 times per month. They rely on the Daily and 4 Hour Charts for entry and exit signals and were held for a pre-determined number of days until their targets were hit. With that initial capital of US$100,000 and starting with the last 2 trades closed in September, the investor or trader would be just 4 months and 9 trades away from generating a 106% return.

AUD NZD TRADE- DAILY CHART


AUD USD TRADE- DAILY CHART


TABLE 2 - TRADES NEEDED IN 4 MONTHS


The risk per trade would be 5% and only one trade would be executed at a time. Naturally, with all Methodologies, losses can be expected along the way as shown in Table 1. However, given the accuracy of the strategy in picking winners, these losses would only temporarily delay the attainment of this 100% return.

These figures reflect the past and expected accuracy of the Methodology in identifying the best trading opportunities. Trades throughout the Forex can be divided between those with a high probability of success and those with average to low probabilities of success. Smaller Time Frames generally provide the latter while trading strategies based on the Larger Time Frames will always give higher-paying trades for larger returns.

As you would have noticed, the last two trades shown here were breakouts from Consolidation boundaries. These setups have become the most common pattern in the Forex market due to the extraordinarily low levels of volatility in 2014. In fact, most of the trades since January have also come from Consolidation breakouts. This requires a strategy that not only delivers in normal trending markets, but also during periods of low volatility that require trading between Support and Resistance as well as breakouts when they finally take place.

Although these results are possible within a fairly short period, they require a lot more discipline and patience relative to Day Trading. They are not as frequent as the trades that are seen on the Smaller Time Frames, but when they do present themselves, the Pips that they offer to traders more than compensate for the wait. The high probability that these trades will be successful when certain criteria are met, also justifies the use of this Methodology by Portfolio Managers dedicated to achieving the short-term and long-term goals of their clients.

Want to know more about these results and my Methodology? Give me a private shout out.

Happy Trading!!

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9

38 PIPS SO FAR IN 417-PIP TRADE EURO USD

The EURO USD has been steadily declining over the last several weeks following the turn at the Resistance of its large Pennant Consolidation. There have been very few pauses or pullbacks in this strong downtrend that now has its sights set on the Support boundary of this Pennant, 380 Pips away. Trading these slow trends can be very profitable and with a short time remaining before that boundary is hit, the current trade opened on this pair could provide a very large return in October.

The recent pullback at the Resistance of this Pennant setup can be seen in the Daily Chart below. This large Consolidation was actually formed following the sharp gains for the USD during the period of risk-aversion related to the Financial Crisis.

DAILY CHART - PENNANT CONSOLIDATION


As you can see, we are very close to coming back down to Support following the turn at Resistance. Trades opened at this point could capture some of the 380 Pips that are available until this area is hit.

DAILY CHART- OPEN TRADE


In this trade, for example, entry took place shortly after the currency pair broke the Counter Trend Line (CTL) to resume the trend. The Stop Loss was placed at the Resistance of a Pennant on the 4 Hour Chart and the target set just above the Support Line.

4 HOUR CHART


As you can see from this chart, someone could actually enter another short position now following this recent U-turn and strong Bearish Candle signal. The Stop Loss would be place above the high of this CTL break.

The strong inverse correlation between the EURO USD and the USD CHF can also be used to capture additional profits. The USD CHF is now headed to an Outer Downtrend Line in a slow steady uptrend that could provide some additional pips when that target is hit.

USD CHF - RALLY TO OUTER DOWNTREND LINE


DAILY CHART - UPTREND


These targets could be hit within the next two weeks and can provide large gains for the patient Swing Trader.

10

As the Euro continues its slow but steady decline against the US Dollar, the current value of the short trade open on this pair is now 105 Pips out of the 277 Pips targeted. This was done within the context of the strong downtrend that began in May this year after the turn at Resistance of the large Pennant on the Daily Chart.

DAILY CHART - PENNANT SETUP


DAILY CHART - OPEN TRADE


The nearly 1400-Pip decline has provided Day and Swing Traders with many shorting opportunities along the way. This current trade, which could reach its target in a few days/weeks, was opened following the break of a Pennant on the 4 Hour Chart.

4 HOUR CHART- ENTRY SETUP


As with all breakouts short from Consolidation, the Stop Loss was placed above the Resistance. Following this entry, additional or new short positions could also have been placed at subsequent bearish signals. The Limit Order has been set to just above the Support of the larger Pennant.

4 HOUR CHART- TRADE TARGET


The trade has now been opened for 4 days and is likely to reach its target in a time period beyond the traditional Swing Trading time frame. It is also being done in a trend that is characterized by smaller Daily Candles than are normally expected for major currency pairs such as this. Major price targets that would also be expected to lead to large pullbacks are also going unnoticed in this atypical downtrend. Nevertheless, it is a trend that can be considered to be used together with existing strategies that target shorter moves with stronger Daily Candlestick signals.

Let us see how this one unfolds together with the inversely correlated USD CHF that is also moving towards its own target;

DAILY CHART- USD CHF


Happy Trading!

11

NFP PUSHES EURO USD TRADE UP 200 PIPS

The dreaded Non-Farm Payroll (NFP) Employment Change was released today and led to the sharp and volatile movements normally feared during this major Fundamental announcement. The employment data, which was positive for the US Labour Market, led to sharp gains of 100 Pips and 80 Pips against the Euro and Swiss Franc, respectively, within 2 hours of the release. Lucky Day Traders may have got some or even all of this movement if they had correctly guessed the short-term reaction of the market. However, those who were already in long-term trades based on the major trends of these two pairs, would have comfortably avoided this volatility on their way to even larger trading gains.

The number of persons employed in the United States increased by 248,000 in September, translating to a welcomed decline in the Unemployment Rate to 5.9% from 6.1%. The increase was also more than the forecast 216,000 and the previous figure of 186,000 for August. Naturally, the reaction to these numbers was sharp, positive and immediate for the US Dollar.

EURO USD- 30 MINUTE CHART


One could have anticipated this movement with a short position placed before the announcement, since the forecast was for an improvement in the numbers. Nevertheless, given the history of this and other currency pairs reacting in contrast to the economic data-especially for the NFP-the trader may have had some doubt about the actual direction of the market. Past trading losses from this and other fundamental data may have also increased the anxiety about trading altogether, inclusive of how much to get from the trade - 30 Pips, 50 Pips, 10 Pips?

In contrast to these difficulties, long-term traders would have already been in trades based on the larger patterns and trends on this pair. The EURO USD was always expected to continue bearish regardless of a single monthly economic data point. A wider view of the Daily Chart reveals that the pair had been in a sharp downtrend since May this year when it turned at the Resistance of the large Pennant Consolidation.

EURO USD - PENNANT CONSOLIDATION


It is within this context, that the short trade was opened as explained in the previous posts. The reaction to the news pushed the pair down even more to increase the value of the floating profit to just over 200 Pips.

DAILY CHART


Similarly, the USD CHF was also in an uptrend headed for the Outer Downtrend Line. This NFP was the final push needed to carry the trade to its target for the 115 Pip gain.

DAILY CHART


For the EURO USD, however, the target at Support is likely to take a much longer time. With 150 Pips left in this trade, we could see this area hit by the end of the upcoming week.

DAILY CHART


The larger trends and setups on the Daily and 4 Hour Charts provide bigger profits with less volatility and trading stress relative to the Smaller Time Frames. Short-term reactions to important but inconsistent Economic reports have very little bearing on the main direction and targets of the larger charts. With the greater stability and clarity of these trends, Retail Traders can therefore hold on to profitable trades for a much longer period with greater confidence that their analysis and patience will be significantly rewarded.

MAIN TECHNICAL POINTS OF METHODOLOGY

[ul]
[li] Counter Trend Lines[/li][li] Downtrend Lines [/li][li] Breakouts & False Breakouts[/li][li] Stop Loss Placements [/li][li] Weekly Ranges [/li][/ul]

12

76 PIPS CHF JPY - 100% RETURN BECKONS

This trade took advantage of the False Breakout on the Pennant of the Daily Chart, following a short-lived Bullish breakout. It provided a gain of 76 Pips over 4 Days as the pair returned inside of the large Consolidation on its way to the Support boundary. This latest trade was added confirmation of the accuracy of my Methodology which continues to produce above average trading gains - 4% so far on a Demo Account opened in October that now tracks my Live Account trades on its way to a 100% return.

There was an initial breakout long above the Resistance of the CHF JPY Pennant that pointed to the start of sharp gains for the Swiss Franc. It was expected to mirror the gains for the US Dollar against the Japanese Yen following a Range breakout of 700 Pips in 5 weeks.

The Pennant setup on the CHF JPY was much larger in comparison and was also in an Uptrend similar to the USD JPY. As such, when the Bull Candle breakout signal appeared above its Resistance boundary, the distance of the breakout was expected to be much greater. A Bullish Candle Signal did appear but shortly afterwards, the pair became volatile and eventually reversed below the Resistance to start the False Breakout inside of the Pennant.

With this turn and the Bearish signal given, the pair was expected to decline towards the Support of the Pennant. Entry took place at the appropriate area and the Limit set to the Near-End Value above the Support (based on my Method).

TRADE SETUP


At the end of the established Holding Period, the trade had not yet reached the Near End Value and thus had to be closed for 76 Pips instead of the targeted 100 Pips.

DAILY CHART- LIVE ACCOUNT RESULT


With this result, the Demo Account generated its first win of just handful of trades needed for a 100% over the next few months.

PROJECTED RETURN


DEMO ACCOUNT RESULT


DEMO ACCOUNT BALANCE


These upcoming trades will be credible evidence of the consistency of this strategy and its ability to provide large returns in a very short time. It will demonstrate that with High Probability trades such as this and others realized over the last 3 years, significant Long-Term Wealth is just a few clicks away.

1 Like
13

RIGHT ANALYSIS, RIGHT RESULTS

As expected, this has formed a Consolidation.


100 Pip Trade was based on this expectation


The types of candles - and other Technical Factors in my Methodology- suggested that this would take place, so one can trade accordingly.

However, the trade was the risky version of my main Strategy for trading the start of Consolidations.

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14

The latest trading opportunity with my Methodology provided me with a 101-Pip gain on the AUD NZD. The pair was shorted as it started to turn at the Resistance of its Consolidation, heading to the Support boundary 250 Pips away.

The pair had formed a Pennant above the Resistance of a larger Pennant following a short-lived breakout attempt in September.


As it continued to move within this smaller Consolidation, a Bearish Signal was given at its Resistance to start a small downtrend back to Support.


After careful analysis, it was determined that this setup satisfied the criteria for trading within Consolidations. Entry then took place on the 4 Hour Chart with the target set for the Support area of the Pennant.At the end of the established Holding Period, the trade was exited for 101 Pips instead of the 140 that was originally targeted - money nonetheless and above our 100 Pip minimum threshold.


As you can see from this graph, a smaller 69-Pip trade was made within the context of that short-lived breakout attempt. The latest result from my strategy means that one would need only a few more months to realize a 100% rate of return - from only 9 more trades.

NOV 2 100% RETURN.png405Ă—540 76.6 KB

The main advantage of my approach is that one does not have to trade every day nor every week. Specific high probability opportunities are provided by the Currency Market each month on the larger time frames. Once these are identified and traded within the context of strong parameters, larger and more consistent gains are more likely with reduced exposure to market volatility.

Trading within Consolidation is a very common trading strategy used to take advantage of low liquidity market conditions. As we move within these boundaries, strong short-term gains can be patiently but aggressively taken until breakouts - very rare nowadays- eventually take place. The challenge, however, will always be to determine which of these Consolidations are best suited for this strategy and those that should be avoided.

Another important element of these trades is knowing where to place Stop Losses without the need for Trailing Stops. Although adjusting the Stop Loss is a common approach to avoiding losses from unexpected reversals, it can get in the way of the natural waves of the market as it makes its way to its main target. If a trade is up by 40 Pips but is closed when the market has pulled back to the new, smaller Stop Loss, one could forgo a lot of money if the market eventually moves by 60 Pips more in your direction.

As you can see from the 4 Hour Chart below, using Trailing Stops would have easily eroded gains at the two pullback areas.

4 HOUR CHART - TRAILING STOPS


My Methodology addresses the issue of where to put Stop Losses to capture all of what the market has to offer and how to determine if the Stop Loss area is strong enough to protect your trade. This gives me the confidence to allow the market to accurately and successfully hit my trading targets until my major goal of Long-Term Wealth is also met.

KEY CONCEPTS OF TRADE

[ul]

[li]Trading Within Medium Consolidations;
[/li][li] Strong Daily Candlestick Signals;
[/li][li] Correct Stop Loss Placements;
[/li][li] Obeying the 7-Day Holding Period;
[/li][/ul]

15

good effort.

'best

16

thanks man

17

This is the Demo Account that is a little behind the Live Account results shown in earlier posts. Its now at 8% after the last 3 trades, but won`t be far behind in getting to that same 100% target.



By just trading the best paying opportunities in the market, large returns will be the result.

No Day Trading Stress, No Stop-Hunting Paranoia.

Trade Less, Earn More, Enjoy Trading.

18

KIWI SETTING UP FOR BREAKOUT

NZD USD could be setting up to either rally back inside of the large Pennant, or start a major breakout short.

It is now hovering at the Support boundary of this Pennant.

LARGE PENNANT


We can see that it is starting to form a smaller Pennant that could lead to the breakout in either direction.

It only needs to form the 2nd Resistance point to complete the formation.


[ul]
[li]In the case of a False Breakout Rally, we would be headed towards the Resistance - at least;
[/li][li]
[/li][li]For a Breakout Short, the large size of the Pennant suggests that significant gains for the USD would be in store;
[/li][/ul]

If this is going to be traded, you will see the result here.

Let´s see how quickly the 100% Target will be hit.


(This Demo Account is 3 trades behind the Live Account shown in earlier posts)


Duane

19

SMALL 9 PIP GAIN ON AUD CAD

This trade was intended to take advantage of a sharp breakout short from a Consolidation.

However, after re-examining the chart, I realized I had incorrectly measured and missed a major pullback point known as the Breakout Equivalent.

All Consolidations have Breakout Equivalents (B.E.) - it is the area that they breakout towards before pulling back. They will either pause here to then resume the trend or become volatile and reverse. Nevertheless, once spotted and measured accurately, one should either be exiting your trades there (see the AUD USD 148 Pip Trade) or avoiding entries at these areas altogether.

In this instance, the pair had already broken out from a previous Range and was now breaking a Pennant.


(FXCM Charts used for Trade Signals- Dukascopy used for Live Trades)

Based on the way I had originally measured the B.E. for this Range, it would not be hit until a few hundred pips. However after analyzing the chart again for confirmation that my Entry Setup was correct, I realized the error and exited immediately. This provided only a small gain, but was much better than what would have taken place if it was left any longer.

This was the entry setup on the 4 Hour Chart. It required waiting on the market to pullback so that my Stop Loss would have met the criterion in the strategy.


Entry then took place, but shortly after, I realized that this B.E. was actually at the Entry Price of my trade.


Luckily I was able to come out before the rally took place, which would have taken out my Stop Loss.


Mistakes are par for the course. Sometimes they lead to large losses, but sometimes you get lucky with only a small loss or gain. As it stands, the Methodology is still 9 trades away from a 100% return.

RETURN LIVE ACCOUNT 13,0%.png455Ă—648 100 KB

(No Trading was done in August; Remaining 9 Hypothetical Trades assume 150 Pips Per Trade as per the average targets in Strategy and no losses)

Duane Shepherd

20

SWING TRADING VS DAY TRADING STRESS? SWING IS THE REMEDY

With almost 400 Pips in profit generated from the last 6 trades, these results continue to prove that long-term success in the Forex Market can only be achieved by Swing Trading the major Currency Pairs.

Day Trading

This is the more popular and exciting way of battling the smaller Currency movements each day. The adrenaline rush of aggressively capturing pips is very addictive and often profitable. However in most cases, the volatility on the Smaller Time Frames takes away these gains just as quickly, making trading an exciting roller coaster ride that only puts you back to where you started…


Sometimes no matter how confidently I set up my trades, the market always had a way of surprising me with unexpected reversals that come out of nowhere…


As frustration builds from mounting losses, despite several strategies and signals, trading eventually begins to feel like an arbitrary choice between Buying and Selling. When this latest “strategy” also fails, the only solution appears to be a drastic redesign of your workstation…


THE SWING TRADING REMEDY

Despite the longer holding periods involved, Swing Trading has tremendous benefits that will allow you to comfortably put Day Trading behind forever.

This style of trading takes advantage of the Weekly price movements of all the Currency Pairs, focusing on the larger trends that provide stronger, more reliable signals. With twice the reward and half the trading, Swing Traders are able to generate more consistent results on a monthly basis, away from the dangerous volatility of the Smaller Time Frames.

One of the main reasons for the better results from Swing Trading is that you no longer need to guess the reaction of the market to volatile Economic Data. Instead of focusing on these events and trying to determine the number of Pips to grab in a short time…


Reserve Bank of New Zealand Interest Rate Decision - March 12, 2014

…it is much easier to wait until the Daily Chart gives us its signal and wait patiently for a larger payday…


As you Swing Trade, there is no need to pay attention to events related to Economic Crises. Even during the European Sovereign Debt Crisis, Daily Chart signals were easy to spot and trade, hitting targets consistently without the need to even know who Mario Draghi is…

cont´d…

21


MY SWING TRADING RESULTS

The trades that you see here are based on a Price Action Swing Strategy that uses the most accurate Candlestick Patterns and Signals of the Daily and 4 Hour Charts. These time frames provide more Stable and Reliable trading patterns and are thus more amenable to consistent profitability.

The benefit of Swing Trading generally is that it addresses the major hurdles that I faced during Day Trading;

Holding Period For Trades

The main Achilles Heel of traders, with Swing Trading, it is much easier to establish clear guidelines on the number of days to hold trades based on each trade setup.

No longer am I tempted to grab more money than the market is offering, nor cut trades short out of fear of reversals. With my guidelines, I am more relaxed and confident in leaving my trades, knowing that 95% of the trades will reach their targets within this time period.

Consolidation Breakout Reversals

One minute we can be in the money when a strong Consolidation Breakout takes place and then in the blink of an eye, start to panic as the market slowly reverses to eat away at our gains…


With Swing Trading, it is much easier to establish strict Holding Periods, so that we know in advance where to set our Limit Orders and when to exit early ahead of sharp pullbacks…


False Consolidation Breakouts

Perhaps the most frustrating of all losses, False Breakouts can take place even with the most promising of Consolidation Setups and Entry Signals. What I have found is that there are specific types of Daily Chart candles that help distinguish between the ones that lead to these losses and those that provide successful breakouts - candles that are not seen when one is focused on the smaller time frames.

Emotions

Finally and most notorious of all our difficulties… Emotions. 99% of the emotions that hinder us during Day Trading arise from;

[ul]
[li]Monitoring of our charts and floating profits;
[/li][li]Moving quickly between trades;
[/li][li]Using small Stop Losses that can be easily taken out;
[/li][/ul]

Despite what many have said, it is humanly impossible for you to contain your emotions while looking at your money going up and down before your eyes. Emotions will always be a part of us and can never be eliminated from trading. The only realistic solution lies in avoiding these 3 habits - which Day Trading almost requires- so that our emotions play a much smaller role.

With Swing Trading, you can

[ul]
[li]Set your targets beforehand
[/li][li]
[/li][li]Establish your maximum Holding Period
[/li][li]
[/li][li]Have rules against the monitoring of trades
[/li][li]
[/li][/ul]

You also have more time and less pressure to assess trades and change your mind in case a mistake is made (see 9 Pip Gain on AUD CAD). Stop Losses are larger but are placed at stronger areas that protect the trades until your targets are hit. The result?

99% of Emotions are eliminated.

Once you become familiar with Swing Trading and its ability to be successful, you will no longer need to worry about watching your trades every hour of every day.

As this approach becomes easier, you will no longer view trading as a fight for an impossible dream. Instead, it will become a more enjoyable journey on your way to your major goals of Long-Run Wealth and Prosperity.

My advice? Find a way to move away from Day Trading. Develop a Swing Trading style that suits you and make it work for you.

Duane Shepherd

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