How to be a Successful Forex Trader Segement 5
Methodology v Strategy
Some traders use the words interchangeably, I do not.
A strategy is a set of conditions that signal you to enter the market, for example, A moving average crossover, RSI going into oversold/overbought and then reversing, Divergence, etc. and combinations thereof.
A Methodology, on the other hand, is a systematic approach to the market that a trader does on a daily basis. It is this process that leads to trade set-ups. The following is how I approach the market each day:
First, I do a top down analysis starting with the monthly moving to the daily and then the 60 min Timeframe.
Second, I do a strength and weakness analysis of each of the following currencies AUD, CAD,CHF, EUR,GBP,JPY,NZD and USD. From this I derive their relative strength from the previous day. This gives me a) A directional bias and b) the best pair to trade (Strongest v weakest)
Third, in the hour before the European open, I analyze the 60 min chart, primarily focusing on how they correlate with Ichimoku theory.
Fourth, I drop down to the 15 min chart, which what I trade off of. I look for top down alignment on each pair. The pair with the best alignment is the one I will trade.
Fifth, using Ichimoku and alignment, I either confirm, or change the directional bias from strength/weakness analysis.
Sixth, I mark the most recent Support/resistance, which I call the Asian box.
Seventh, From all of the above, I now have the best pair, direction and usually both a breakout entry or pullback entry.
Eighth, correlation, I look for all of the same currency to move together, For instance this morning, as shown in the chart above, only GBPAUD was a Buy breakout, while all the other GBP pairs were sells. Hence the reason I did not post or take the GBPAUD trade. (which would have gotten about 10 pips before crashing).
Ninth: Execute, collect your money, go to the Beach.
If you like this idea, please push like and follow me, it motivates me to post ideas more often.
Stay green my Friends
Allen
Some traders use the words interchangeably, I do not.
A strategy is a set of conditions that signal you to enter the market, for example, A moving average crossover, RSI going into oversold/overbought and then reversing, Divergence, etc. and combinations thereof.
A Methodology, on the other hand, is a systematic approach to the market that a trader does on a daily basis. It is this process that leads to trade set-ups. The following is how I approach the market each day:
First, I do a top down analysis starting with the monthly moving to the daily and then the 60 min Timeframe.
Second, I do a strength and weakness analysis of each of the following currencies AUD, CAD,CHF, EUR,GBP,JPY,NZD and USD. From this I derive their relative strength from the previous day. This gives me a) A directional bias and b) the best pair to trade (Strongest v weakest)
Third, in the hour before the European open, I analyze the 60 min chart, primarily focusing on how they correlate with Ichimoku theory.
Fourth, I drop down to the 15 min chart, which what I trade off of. I look for top down alignment on each pair. The pair with the best alignment is the one I will trade.
Fifth, using Ichimoku and alignment, I either confirm, or change the directional bias from strength/weakness analysis.
Sixth, I mark the most recent Support/resistance, which I call the Asian box.
Seventh, From all of the above, I now have the best pair, direction and usually both a breakout entry or pullback entry.
Eighth, correlation, I look for all of the same currency to move together, For instance this morning, as shown in the chart above, only GBPAUD was a Buy breakout, while all the other GBP pairs were sells. Hence the reason I did not post or take the GBPAUD trade. (which would have gotten about 10 pips before crashing).
Ninth: Execute, collect your money, go to the Beach.
If you like this idea, please push like and follow me, it motivates me to post ideas more often.
Stay green my Friends
Allen