Hi guys! I Want to share with you my way of trading! I´ve been in forex more than 2 years, I consider myself a day trader, and i usually take 2 or 3 trades a day. This is what i do:
Pair: EUR/USD
Max. Risk: 1%-1.5% per trade.
Type of trader: DAY TRADER.
I have 3 charts:
- 1H
- 4H
- Daily
Every day at 5:00 pm EST, press CTRL + Y and:
In the daily chart identify: High and low of the previous month (blue dotted line). This must be updated only at the beginning of every month.
In the 4H chart indentify: High and low of the previous week (green dotted line). This must be updated only at the beginning of every week.
In the 1H chart identify High and low of the previous day (yellow dotted line). This must be updated everyday at 5:00pm EST. Also update pivot points every day (big red line for the central PP and thin red lines for the rest)
At the end you have 3 charts that show you have the charts look like.
Price most of the time cross the previous day, week, and month high and low. So every day, week and month you can have an idea of where the prices are going. Based on that, the first step is to decide if you want to go short or long for the day.
Take a look at the daily chart to see the big trend and find any signal that tells you where price are going today: up or down. The signals could be:
- Candlestick patterns: morning star, hammer, etc
- Gaps to be filled
- Economic reports
- If prices where down all the week and today is Friday, then there is a big chance prices will go up.
If your choice is SHORT, then wake up 30 minutes before asian session opens at 7:00pm EST and try to find a good place to enter.
If your choice is LONG, then wake up 30 minutes before London opens at 2:00am EST and try to fin a good place to enter. Pivot points are more reliable during London open. So find a nice support around S1 or S2.
If you miss the opportunity, don´t worry, you can trade during US session. If you want to go short, price usually goes down when NY opens (but I wouldn´t suggest to trade around this time, because of fundamental announcements). The most active hour is from 10:00 am to 11:00 am EST.
So for me, the best times to trade are:
- London open (2:00 am EST): Nice trends start to develop at this hour. Also because you don´t have release of very important news.
- US session between (10:00 – 11:00 EST): High volatility.
- Best days to trade: Wednesday, Thursday, and Friday.
STOP LOSS AND TARGETS
My way of trading gives me a high win/loss ratio, that is way most of my trades have a Risk/Reward ratio of 1. My stop loss is between 15 and 35 pips (depends of the analysis you made). As soon as prices reach the same amount of my SL, then I take half profits and move my SL to break even. This increases my risk/reward ratio.
TIP: My targets usually are high or low of the precious day The key is to decide which one! up or down?