Hey Traders, back with you after a break to fine tune my new strategy that you will enjoy.
Previous Strategy targeted 100-200 Pips over 5-7 Days and while this had some benefits, it was much too slow in terms of Returns (40% Annually).
Now, new strategy aims to provide 30% Monthly..
STRATEGY IN SUMMARY
1. 50-70 Pip Targets
2. Maximum Stop Loss of 45 Pips
3. Maximum Holding Period of 24 Hours
4. Daily & 4 Hour Charts used for Signals and Entry, respectively.
5. Candlestick Patterns and Signals used with Trend Lines & Consolidations for Market Direction and Entry
6. FXCM Charts used for Trade Setup and Signals (based on the New York Close of the Daily Chart)
7. Live Trades take place on my FXPRO Account (better interface when trading - can see % Risk and Return expected on trade & provides email alerts so you dont have to check your charts)
USD JPY TRADE
This took advantage of the False Breakout Reversal on the Pennant of the Daily Chart.
Daily Chart shows the Bullish Reversal Signal that indicated the start of this Reversal, following the failed Bearish Breakout...
DAILY CHART REVERSAL SIGNAL
Based on the theory of False Breakouts, it was expected to at least hit Resistance to then Breakout...
As such, after the 4H Chart provided a signal, entry took place with the following setup...
Stop Loss was placed below the Candlestick Formation, with Entry at the close of the Candle.
At the end of the 24 H holding period, market rallied as expected to provide a small gain of 33 Pips - equivalent to a 3% on my account. Even though target was 60 Pips and a 6 % Return, I had to exit for a smaller gain as the market did not rally to the target by the end of the 24 Hours - nevertheless, profit.
The Video Analysis of the trade can be seen below..
MAIN ASPECTS OF TRADE
False Breakouts can be traded aggressively.
Key is to know the Right Signals and Entry Setups to use.
Short Trading Targets within a Short Holding Period provide faster turnover and larger returns
Daily and 4 Hour Charts provide the most reliable Setups and Signals
Once Stop Loss placed at a Strong Area, no need to monitor the trade - Set It and Forget It. This is much easier if your Live Account offers email alerts.
These alerts allow you to know when the trade has been closed so that you arent tempted to interfere with the trade - NO EMOTIONS!
6. Always Exit Trades Religiously at the end of the Holding Period - just in case market reverses sharply!
So thats the trade in a nutshell. On average 1 to 2 of these setups appear each week. I dont need to trade every day since the next trade is just a few days away and will provide a Strong Rate of Return because of the Wide Risk Reward Ratio - more than justifying the wait.
Look out for more later this week.