Trading the Trend with Strong Weak Analysis

@WonLi
Do you just enter the trade immediately you get your strong weak ranking or you wait for a pull back first to the 1H moving average. If you enter the trade immediately you get your strong weak pair, what do you do about the fact that most strong weak pairs occurs at major supply or demand zones, do you just go ahead and trade even though it seems the pair is at the point of reversal.
How do you enter a trade after you have gotten your strong weak ranking

I am assuming the author of the thread hasn’t revealed his entry methods, right?

I certainly can’t speak for the author(Dennis) but I guess I look at what he provides to us daily as a
tool we can choose to use, if we like. I really think you need to come up with entries, exits, etc. on your
own as an independent trader and not expect Dennis to do the trades for you.
Of course, that is just my opinion.

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Let me speak for him…lol. He has revealed it several times along in this thread. But it is left to you to decide your own entry method. I discussed mine very recently.

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@Brasor
He has, given some clue, I know one is method is that he waits for a pull back to the 200mva on a 1H before entering a trade.
But the thing is, if you wait, by the time the trend resumes after the pullback, the trade has already left the Strong and weak position, I don’t know how he handles that.

This is one of his method though.

@4ex_trader
What if after waiting for the trade to pull back to your level on a 1H chart, then you’re about to enter the trade, only to find out that the weakest currency is no longer the weakest, and the strongest currency is no longer the strongest, what do you do, do you still get in?

It is possible to still trade pairs profitably even if they are longer the “top SW” pair!

Just establish what the trend is, wait for a pullback and then join the trend…

I like to keep it simple. My continued interaction with that pair will depend on the overall trend. If I see that there is enough “GAP” between my entry and next potential daily resistance or support, I will still enter after retracement…

As you know with trading, nothing is ever black or white, you just have to find low risk, high reward set ups.

That’s is the skill that we get rewarded as traders.

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I looked through the most liked replies and found his basic system of entering with a market order with a 100 pips take profit and a 200 pips stop loss. I think I can build something on this. I would start by replacing pips with ATR multiples, since every pair moves at a different speed. So maybe 1ATR take profit and 2ATR stop loss. Although that would be trading at 0.5 risk to reward.

That will be a negative risk to reward ratio,I don’t advice you to do that, you’ll end up blowing your account.
Dennis’s take profit is not a 100 pip, it is anywhere from a 100 pip and above, it’s a minimum of 100 pips, so he does not trade a negative risk reward ratio.

Isn’t this the basic system he suggested? Or did I get it wrong?

I enter immediately because i cannot monitor the 1H TF. I have a full time job. I am not saying i am rigth but only show you how i trade this system.

@WonLi
Have you been profitable doing it this way?

I have done some testings, and I was wondering if any of you tried calculating strength on the daily using the 34 SMA. There are six 4 hour candles in a day, so intuition tells me that the 200 SMA on the 4 hour chart is going to be equal to the 34 SMA on the daily chart because 200 divided by 6 is equal to 33.34. Friday’s result are pretty much the same.

This would make things a lot faster.

The simple 200mva on a daily chart is about 6-7months.
On the 1H chart is about a week.
On a 4H chart is about a month.

@Bransor I think op already discussed the 34ma.

Sorry, I am not sure what this file represents

If you are still in NZDUSD* that trade crossed the +150 pip mark

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It depends on the long term trend, if it is a counter trend trade then I will watch for a reversal candle as a signal to take profits, If we are following the long term trend then I may just let if run and try to get a big one, I might even add following a pullback, But in both cases we are already profitable so regardless what happens next we made money

For tracking on this thread I am using a wide stop ( 200 pips) for your own trades you need to see were support ( if long) lies and have your stop safely below that, if it means a stop of more than 200 pips then you must decide if a + 200 pip stop makes sense from a risk to reward ratio. You should not blindly take every trade as I am doing on this thread

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I understand, thanks. I am not trying to copy your style exactly, I’m just trying to get a baseline for how you approach trading using this method. If you have the time, can you tell me if I got it right? I have spent the last couple of days reading through the entire thread and the following are the information I got.

  • You do your rankings.
  • You check to see if there is at least a 2% spread from the strongest compared to the weakest.
  • You check to see if the strong and the weak are not part of the same group (Commodities, European, Safe).
  • You enter the trade immediately on the day in which the new rankings have formed.
  • You place your stop loss behind a support or resistance.
  • You place your take profit 100 pips away.
  • You take half off at your take profit and leave the rest to run until you get a reason to exit (I assume some kind of reversal pattern or break of structure).

Am I correct?

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