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Saturday, September 10, 2011

#FX #Trading - I promised I would tell you everything I know so here you go


However, there is no guarantee that I know all that much or that I am correct in what I think I know.. LMAO

To be clear up front.. Many of the things discussed in this post are the result of months, and even years now ;) of research and development by, mainly, @ATTechFX (on twitter) and myself (@Ancient_Warrior on twitter). While the @ATTechFX trade setup screen would appear much different than my own (ie; minus BB, tunnel & levels/crosses (noise? LMAO)) the logic behind trade entry is essentially the same.

Said research and development involves many proprietary indicator settings that are not discussed in this post. These include, but may not be limited to, the creation and use of my own proprietary levels, the whens, hows and whys of "pulse" fib placement, the whens, whys and hows of the use of a sole chikou line, all alone. Besides the theory of use behind these things most standard settings have been tweaked as well, including bollinger bands and TRIX settings.

Needless to say @ATTechFX and myself have an unknowable number of hours tied up in this "stuff". I work as much as I can get away with without Mrs Warrior killing me and @ATTechFX works even a lot more hours than I do! Sometimes 25 hours a day ;)

Trading FX successfully requires a lot of hard work and determination.

It is our hope that you will somehow be able use what you find in this post to get you thinking outside the box and hopefully improve your own trading success.

Ok, here are the main things I currently use to trade..

Bollinger bands (double, 2 and 3 standard deviations) center BB line, via settings = very nearly a 13 EMA

The Vegas Tunnel is used for directional bias and also acts as very good support / resistance. It represents the "core" of 100 and 200 EMAs. It is effective in all time frames. It is constructed of a 144 and 169 EMA. I do not use it for entries but it is an important, background S/R consideration.

Trend lines DUH! If you don't know how to use these then stop trading immediately ;)

Last in this section is my own proprietary levels. These are consistent over long time periods and represent, possible, strong support / resistance. I say possible because much depends on the current state of the move. When/if price is indicated as overbought then these levels above that area are considered possible resistance and so on for oversold conditions in the reverse.

For overbought / oversold conditions I use a double TRIX indicator which you will see in the charts.. I think of it in terms of "room to move" for price.

Those are my background / secondary settings. I like to be aware of the current state of these things at all times, in all time frames.

And of course we should always attempt to trade in the direction of the prevailing trend.

Now we get to actually locating and entering trades.

Actually the tunnel system is present in it's entirety which consists of a 13 EMA cross of the tunnel as a buy / sell indication along with a price close above / below the tunnel itself. Though I do not actually use it for entries, it can be a good trade confirmation indicator.

Obviously the current "state" of the move is also important as indicated by standard deviations, overall directional bias, trend lines and the location of important (proprietary) support / resistance levels, excluding fib levels, that may or may not be nearby including, but not limited to, the tunnel itself.

Of utmost importance in locating good, high probability trade opportunities is the manner in which we use fibs.. To me fibs are merely another "tool" in the tool box. However I do not look at them in a static way. I actively use / draw fibs "in search of" valid trade setups. I have a method of defining / confirming the current state of any move in any time frame. I actively draw fibs until I find price point verification of a possible move.

Then we get to the actual trade trigger mechanism itself..

This involves the interaction of my 13 EMA (my BB center line), a lone chikou line and price.

There are actually two "triggers" involved including the chikou line and price itself as they are related to the 13 EMA.

The chikou line should be crossed above the 13 EMA for a long or below the 13 EMA for a short.

To go long we should have a candle close above the 13 EMA and below the current chikou line.

To go short we should have a candle close below the 13 EMA and above the current chikou line.

In other words.. chikou should be pointing in the desired direction of the trade and have crossed the 13 EMA in that direction. Price must close between the 13 EMA and the chikou line in the desired direction.

At the point that this occurs we can stay in the trade as long as that particular condition exists (ie; price / candles remain between the 13 EMA and chikou line).

Now to be honest going into the use of the (pulse) fib, how I draw my support / resistance levels and the whys and what fors of the chikou line, it and other associated required settings is beyond the scope of this post.

It would be a f'ing book and first I would have to "deprogram" you LMAO

In closing, it's up to us boys and girls. Who better than traders to "recover" taxpayer money from the banks?

Never forget that the Primary Dealers CONTROL 73% of FX volume at all times. IMHO, with that kind of volume control it would be easy to collude to choreograph market movements in any manner you choose..

We have to unite, us against them. Worldwide we must be cunning and use our small volume share of the FX market in the most effective manner possible so that we might enjoy an ever growing, larger share of the forex pie.

Until, one day, WE [traders]! Not the Central Banks, rule the f'ing world!

WOOHOO! Go traders!


Here are some pretty pictures demonstrating the techniques discussed above..

AUDUSD m30 short example

GBPAUD m30 long example

EURCAD daily long and short examples

Thanks and happy pipping to everyone!


1 comment:

  1. At the point that this occurs we can break in the barter as continued as that accurate action exists. Thanks for sharing.

    Day Trading