When you first started, try to capture 20 points from each trading session, then stop, turn it off, and do more research. Ask for more when you are really good at it. Before you become a master in the foreign exchange industry, set a 20-point goal and stick to it. I emphasize the term industry, it is not a game, it is related to your hard-earned money.
Spend the main time on the 15-minute chart.
Before starting a certain trading session, look at the 1-hour chart to get the trend of the time period transition and how it might go when the new time period starts.
Look at the 5-minute chart only when you absolutely need to know what is happening behind the 15-minute chart, especially when the candlestick stretches or has just crossed the pivot point. In other words, whether a reversal has occurred on the 5-minute chart but has not been reflected on the 15-minute chart. come out?
Don’t stay on the 5-minute chart, because it has too many noises that will torture you to death.
The law of the moving average on the 15-minute chart: Even if the moving average is up on the 1-hour chart, if it is down on the 15-minute chart, this implies that a reversal is coming, but it has not yet occurred. At the same time you don’t want to miss what is happening as reflected on the 15-minute chart.
If the moving average goes up and down on the 15-minute chart, but the price wants to go up, sooner or later the price will go down, such as being bounced back by the pivot point, or by the node captured by the other three tools (bar chart, moving average divergence or trend line analysis) reverse. The same goes for the moving average line and the price going down.
Only use the divergence of the moving average instead of the moving average for trading signals. It is a delay indicator and is too slow for foreign exchange.
The divergence from the moving average on the 15-minute chart is more important than on the 1-hour chart. Divergence means that the moving average is opposite to the direction of price fluctuations.
Always use 20-30 pips stop loss to protect funds. Mental stop loss is also acceptable, but strict discipline is required. Do 10 times and you may be wrong 3 times. The loss of three times should be kept within 20-30 points, and your profit should be much larger than the small loss. Don’t be afraid of loss. Professional baseball players will miss 6 times in 10 times. The success rate of the lion chase is only 20%, and the failure rate of professional poker players is 50%. Your chances are better than them. There is no 100% certainty in life.
When you place an order close to the pivot point or an important pattern (such as a double top or trend line breakout), put your stop loss on the other side of the event that made you act, but don’t get too close, because the price tends to pull back after breaking through. If you use a stop loss of 20-30 pips, but 33 pips can safely pass the reverse draw, then use 33 pips. The rule is 20-30 points, but it must be reasonable.
The purpose of stop loss is to insure, not for profit. Of course, you can use the trailing stop loss method to protect your profit.
Only four tools are needed to trade foreign exchange: bar chart, moving average deviation, pivot point and trend line analysis. Be technical, avoid the fundamentals, the news has been integrated into the price, you do not need to read the news every second. Reading the bar graph includes finding double tops (bottoms) or even triple tops (bottoms).
Here comes the difficult part: I said that the forecast for the next trading session high and low can be M1/M3 or M2/M4, but the transaction is gray instead of black and white. The actual high and low can be M1, M2, M3 and Any combination of M4 can be M1/M4, M2/M3 or any other combination of five pivot points. M1/M3 and M2/M4 are for reference only, not for cement casting.
Price is the first indicator, it determines what the high and low will be. In addition, you should combine this forecast with three other tools. In other words, if the price goes down when it enters the current time period from the previous time period and continues to go down from M3, then M3 is likely to be high in the new time period, even if the system may indicate that M4 is high.
So the pivot point should be used in combination with the other three tools. I have seen instances where the price goes down. The opening of the new session directly crosses M3, and a double top is formed. Here are three indications that the price must go down. I believe that the moving average must also be down at this time, which is another clue that the new period of high has appeared.
At the beginning, choose one of the four main pairs (EUR/USD, USD/JPY, GBP/USD, USD/CHF), study its rhythm and become an expert. I recommend Euro. When you are doing well, trade the other three pairs. In the learning phase, you may be in a hurry, just make one, don’t jump around in four pairs.
Make transaction records, including good and bad transactions, analyze what is right and wrong, and swear not to repeat mistakes. Develop a good habit of being a professional trader. This is not a place where you can drag your guns around.
Important point: If the price opens at the top of the forecast range for the new period (R2 or higher), in other words, it is in the selling zone (areas above the central pivot point), and there are other indicators that indicate that the price is too high (such as a specific K Line, moving average divergence or trend line breakthrough), then the price may already be high in the new period. Similarly, if the price opens at the bottom of the forecast range for the new period (S2 or lower), or is in the buying zone (area below the central pivot point), and other indicators suggest that the price is too low, the price may be the new period Low.
If there is nothing to do, don’t do it, don’t do it impulsively or just want to do it, it will cause a lot of trouble. Only do it when the four tools have very clear signals.
To choose a trader, choose the one with the lowest spread in this row.
Sometimes after a weekend break, there will be dramatic fluctuations when the market opens on Sunday. Normally I use Friday’s high-low opening and closing (OHLC) data, but if there is a sharp fluctuation on the 15-minute chart on Sunday, I will use Sunday’s OHLC to better determine the support and resistance levels for the next period. Of course this only applies to traders who separate the two hours on Sunday from Monday.
People often ask me why his pivot point is different from mine. The answer is that you may use different traders, and the 24-hour trading hours are disconnected at different times. Of course, the results are different, but it doesn’t matter, because of your pivot point. The calculation is to reflect the past 24 hours of the market with your dealer, and the result also predicts the support and resistance levels for the next period. If your dealer disconnects at 5 pm, and you use OHLC data disconnected at different times, it will be out of sync.
Remind former stock traders (I said before, because I really don’t know why you want to return to stocks after you have tasted foreign exchange): Don’t over-trade foreign exchange. This is not a scalping market. The trend of foreign exchange is very good. Early, don’t sell prematurely during the rise, and act after seeing the trend line break.
You won’t succeed in foreign exchange trading unless you devote yourself to it. This is not the place to play. If you don’t plan to take it seriously, do something else.
Put your emotions in your back trouser pocket. This is a career and should be treated as a career. If you have any bad habits, the foreign exchange market will quickly correct you.
An important point: If, based on what you have learned so far, the general trend of this period is down, you want to “down” and sell if you rebound. Don’t try to buy, otherwise it will be tortured to death. Similarly, if based on what you have learned so far, the general trend of this period is long, you want to “go up” and buy on dips instead of trying to sell. Former stock traders sacrificed for both. Maybe you can give it a try when you are really good at it, but for now, just think of one direction to avoid sadness.
Another important point: the euro trend began after 2 a.m. New York time, which is exactly the Renton period, the busiest time for foreign exchange. Time period after time period, the euro will always average 76 points in the first 12 hours.
Believe it or not, once the euro determines the trend of the 12-hour period, it will go to the other end of the range (76 points). To catch the trend, ride it. Of course it will not go in a straight line. Even if the plane takes off and landed, there will be bumps on the way. The same is true for the euro. Once the direction is chosen, it will hover to the other end of the range. They would cheat dumb money out on the way, and they never knew what happened.
The conclusion is: if the euro wants to fall in 12 hours, it will go down by 76 points and think “down”; if the euro wants to grow in 12 hours, it will go up by 76 points and go “up” Look. In these 12 hours, the euro has either risen or fallen, not both. I am talking about the main trend. Of course, there will be a rebound or a callback on the way, depending on the long-term or the downtrend, but as mentioned above, it is enough to sell a rebound during a downtrend and buy a callback during a long-term trend.
Think about it, you get strategy 26 above, you will fall in love with it, and it will test your nerves. If you want to buy into this 12-hour trend, why not ride it when it starts! This requires iron nerves, because the euro will carry you from time to time, but it is not enough to eat the stop loss you started. From the perspective of risk-reward ratio, you risk 20 points and make a profit of 76 points, a good ratio.
What I want to say is why not place an order, set a stop loss, clean up the swimming pool, and let the euro zone finish its range! The reason why many people are deceived is that they stare at the price after placing an order, and overreact after a slight twist. Let it go, don’t worry about it, the worst is to be stopped by the stop loss, right? Often you won’t. If you catch the main trend, the opportunity is very helpful for you to make an extra $760 per lot. If you keep trading on the way, you may be beaten badly and lose money. Let the euro lead you, not the other way around.
From time to time, I will encourage you to take a few steps back from the day map and look at it from a distance. Sometimes you may be too close to see the forest. Mark the trend line on the daily chart and find the divergence, you will see a lot of the next move, this is what you want to know, right. Not only do trend line breaks and moving average deviations have big articles, but where the daily line closes will also indicate where it will go next, you will know what I mean by studying the bar chart.
I think it is wise to stop and think from a higher level from time to time, and it is healthy to look at things from the top down. Sometimes we get lost in the shattered steps of daytime prices and cannot see the big picture unfolding before us.
To repeat, you only need to look at a few things and wait patiently for the entry point to appear. Don’t pull the trigger when you think it’s time, wait for a clear signal. Only four indicators are needed: bar chart, moving average divergence, pivot point (breakout/test/resistance) and trend line breakout. These are enough to make you successful in the forex trading industry. You no longer need bells and tassels. You may learn from before. To the difference.
The hardest thing to do is to erase what you have learned in the past and shake your head to make them go away.
Although I said that there are only four clues, in fact there is a fifth one is the price. Price is the number one indicator in the world. It tells you where you want to go and lets it guide you. It’s like playing cards, you have to wait patiently before it comes out on its own. This is called following the head sheep.
Recently, someone asked me about buying and selling multiple lots. You can fill your position at the entry point, or one lot at a time, and increase your position as the price crosses each pivot point until the end of the range. If you are convinced that you have taken advantage of the trend and have good money management skills, there is nothing wrong with adding positions along the way.
Or use the two together, start a full position, buy/sell more as the price crosses the pivot point, until the end. Don’t get out too early, remember that foreign exchange trends are good (especially the main trend), the price knows where you want to go, let it take you there. Use five indicators to make your decision.
Be careful when trading between pivot points. This is a no-man’s land and a danger zone. Good transactions are done near the pivot point.
Take the time to draw a pivot point on the 15-minute chart. This should be your focus. Just like the radar on an airplane, it is difficult to trade (take off) without a reference point. You don’t need to draw everything, and you may not be able to put it down, but at least draw the pivot point near the price. You can also draw on the 1-hour and 5-minute charts, but you can’t spend too much time on it. It may be a waste of time, but it’s not harmful. You should also draw trend lines. The break of the trend line at the pivot point is strong evidence of a turn. Then draw the moving average divergence, the more you see on the chart, the better the trade will be. The trading hours should also be crossed.
The 5-minute chart is like a fine-tuning board on a ship. Although it is inconspicuous, it is very useful for correcting course. The same is true for trading. Looking at the 5-minute chart from time to time will give insight into what is happening under the 15-minute chart. This is very important, especially when the price is trying to end the trend or attacking in the opposite direction without paying attention.
Of course, as I said before, don’t stay on the 5-minute turf that former stock traders like. Those people are essentially scalping, but they will be shaved off in the foreign exchange market, just as a new client of mine discovered after a huge pain. . Now he finishes placing the order (set stop loss), picks up the plane at the airport, or cleans the swimming pool, and then comes back to see how much money he made by not obsessing with every small fluctuation. I don’t mean to ignore it completely, but I mean too close or too close.
Once you have caught the trend (through five indicators), let the price go on its own and wait patiently for the next event that makes you act. Of course, the next step must be obtained through the first five indicators. If you don’t see anything special, don’t move anything, sit on your hands, and don’t press the enter button for anything.
Recently someone asked me how much signal I need to pull the trigger. As I said before, you only need to find the direction from the bar chart, the divergence of the moving average, the pivot point, the trend line and the price, but how many signals do you need to trade? Of course one is enough to fix the tone, but two or more saying the same thing together are more convincing.
For example, the euro has been in a downward trend recently, and it is still falling from the end of the last trading session to entering a new period. At the beginning of the new period, the price has formed a double top near the pivot point. Well, here are three signals telling you what to do, of course it is short.
We have a downtrend, double tops and top pivot points. There is a lot of evidence that we want to go down. You should understand. This is a good comparison. You don’t have to wait for all the lights to turn green before you start driving to work in the morning, so you don’t go to work. The more green lights, the better, but one green light is enough to get on the road.
Some psychology: For novices, self-esteem will increase after doing long transactions. You will not be right forever, you will make mistakes, which is normal for both novices and experienced players.
Don’t be knocked down by failure, tell yourself that next time, you must move forward. If you use good money management, such as a 20-30 point stop loss, you will survive to see the next trade, which is the preservation of power. Don’t doubt your indicators (remember, bars, moving average divergence, pivot points, trend lines and prices), you should not argue with the instruments on the plane, otherwise you will crash. So don’t have doubts about the indicator, act when it tells you to act, and it tells you to buy, buy, and have the courage to do so.
One important point is: don’t listen to anyone else, be your own advisor, and close your ears to trade. This is you and your money, and you have no one to ask. Avoid people with negative thinking, and don’t talk about foreign exchange with others, unless he is as serious about foreign exchange as you. Otherwise he will pull you down. Be humble and save the bragging rights for later.
If you become arrogant, foreign exchange will pull you down. Finally, focus on success, beware of your thinking, thinking will create action and results. If you focus on the final result and succeed, you will get there. If you are always afraid, it will affect your psychology. When you fail and fall, pull yourself up, pat the dirt off, and move on.
Don’t be intimidated by mistakes, you will do better, especially when you keep all transaction records and study them hard. Be a professional and a prepared person.
Recently, a customer asked me. He found that the price had gone up through the pivot point for a long time, and there was a lot of money on the book. He stopped at R2 and then continued to grow. What should I do? The answer is: R2 is usually a resistance level. When the price crosses R2 upwards and no longer falls below R2, R2 becomes a support level. This is a buy signal. Remember that price is king. It can go wherever it wants. You must follow it, even if it has brought many tears to the opposite direction, or has exceeded its daily average range, it will continue to go if it wants to.
Remember: the foreign exchange trend is strong, do not buy too early, and do not sell too early, waiting for strong evidence that it has made a decision. In this example, the price stopped at R2, but did not fall below it. There is no sign of reversal. Once you decide to continue to rise, all you have to do is to keep up. Don’t become a victim of high hypoxia at R2, trust you. The indicators, do as they tell. Don’t instinctively think that the price is too high, it can go higher if you want, in this case it is much higher.
The more I practice, the better my luck. (Wayne Gretzky-Canadian ice hockey star)
Usually you should not buy and sell between pivot points. This is no man’s land. Wait for the price to make a decision at the support or resistance level, combined with other indicators, price directions, bars, moving average deviations, and reactions at the pivot point. Trend line break.
Do not use moving averages for things other than divergence. Recently, the moving average has moved up on the 15-minute chart, making unsuspecting traders believe that the price has gone up, but the price has turned around at the main pivot point to find the other end of the range S1. You can’t see these on the moving average because it is a lagging indicator. In short, moving averages can only be used for divergence, not for other purposes.
You should only enter and exit near the pivot point, not in between, as mentioned above. When the price fluctuates on the pivot point, take a look at the 5-minute chart and see what is happening behind the scenes, because you should only focus on the 15-minute chart until the price negotiates with the pivot point.
Now you should pay attention to what the price does on the cuff. In the example above (40), the price crossed the main pivot point to deceive unsuspecting traders, and then fell, leaving a long upper shadow on the 15-minute chart. Of course, you can’t see it by just looking at the 15-minute chart, but the price has reversed on the 5-minute chart and is ready to go down.
The moving average does not deviate from the price, only that the moving average confirms that the price trend remains unchanged. But don’t be fooled, see 40 cases.
The resistance level (M3, R1, M4, R2) is the selling zone. There will be more sellers than buyers, and the price will be pushed down. Similarly, the support level (S2, M1, S1, M2) is the buying zone, and there will be more buyers than sellers, pushing the price higher. These expectations are based on the interpretation of the buy/sell relationship in the previous trading session. I believe that after careful study of the pivot point, you will agree with this view. The price will hesitate when approaching and around the pivot point, stop, and decide the next direction. This is why you should not trade between pivot points when prices are in progress.
Don’t be scared out of the foreign exchange market because some people say it is too dangerous. In fact, it is the least risky compared to other markets. The foreign exchange market is not manipulated like stocks and futures. It is a truly perfect 24-hour market. Your stop-loss orders rarely cannot be executed because the foreign exchange market is highly liquid, with a daily trading volume of US$1.5 billion. In the most circulating market in the world, you can get good transaction prices and fast transaction speed.
May 23 was an unusual day, the price exceeded the average range, two hours from the pivot point, 135 points long, and jumped above R2. The euro reversed at the double top, fell below R2 and returned to the daily average range, which in this case was slightly above average. Of course, you may have noticed that the double top is also a double track (if you happen to be looking at a bar chart instead of a candle chart), the two patterns simultaneously produce strong signals, indicating that it has reached the end. So while looking at the price pattern, pay attention to the combination pattern that occurs at the same time.
May 23 should be M2/M4, because the market closed at a high level the previous day, but the actual range is pivot/R2. Ladies and gentlemen, the transaction is gray, and the pivot point is not made of stone. But usually they are very close.
On that day, the pivot point R2 combination caused the euro to exceed the daily average amplitude, but it was still within the logical range defined by the pivot point. The central pivot point becomes the buying point (support). When the price rises strongly, it becomes the starting point of the day’s search mission. Similarly, R2 is a selling point (resistance) and a possible target for selling pressure, so the euro ended its day-seeking mission here.
The important point is that the complete range obtained by the euro is within the pivot point logic and regularity indicator, which is the key to understanding the event. What I mean is that the four pivot points below the central pivot point are all possible buying points, and the four pivot points above (including R2) are all possible selling points. Obtaining, or if it exceeds the full range on May 23, is common sense and does not necessarily strictly follow the M1/M3 or M2/M4 trading combination.
I believe you have seen the power of the pivot point, you should only buy and sell near it and not in the middle of no man’s land. The only caveat here is that on that day, the price formed a combination of double top and double track patterns above R2. This reversal phenomenon, especially the simultaneous occurrence of the two patterns, cannot be ignored.
But the main point here is the double top/rail formed after the price crossed R2. This zone should belong to the exhaustion zone, taking into account the fact that the last resistance level was broken. Then you look for strong evidence to see whether the price will continue to rise or reverse downward as in this case.
To study the bar chart carefully, I believe you have noticed the similarity between the price performance in a certain trading session and the previous one. In fact, due to the good trend of foreign exchange, it looks similar every day, except for the actual range, the high and low points are different (that is, the loop of nine possible pivot high and low points repeats).
The price always decides which set of pivot points to use, so it has to keep up with the price. For this reason, I call it the fifth indicator, perhaps the most important indicator of the five. At this point, you should have a lot of understanding of the other four indicators.
Please keep studying the bar charts every day. They provide important clues that happen every day. If you understand the things in the chart, you will continue to make profits.
Don’t be greedy. I recently heard from a client that he only got 150 points from a trading session, and many of them fell on the table. Goodness, someone like him from the stock market should be grateful for making a profit in one day. The point is, if you start from a novice and only ask for 20 points a day, all that is exceeded will be rewards, and wealth must come over time.
But don’t forget the old saying, “It’s safe to lose your pocket.” If you see a profit and want to take it, please take it. You will live to see another day and get more profit. Don’t always want to catch the big ones, here will not get rich overnight, here you need to preserve your strength and continue to make profits. Do it when you have a good reason to close a position.
Foreign exchange transactions need to follow a set of disciplines. A large number of financial behavior studies have shown that compared to the joy of gaining $1, traders suffer twice as much pain when they lose $1, so they take more risks to avoid losses rather than profit. As a result, they buy high and sell low, which is contrary to conventional wisdom. . Following my trading strategy, you will avoid getting short haircuts in the forex market crash like May 28.
Someone asked me why I waited until 3 o’clock in the morning in New York and lost this previous possible opportunity. The answer is: this time is the beginning of London trading and the busiest time in the foreign exchange market. You will notice that the euro usually starts its main trend at this time. Look for its daily average range of 76 points. These points are usually the first Happened in 12 hours. Check it out for yourself, this happens almost every day, every year.
“Rising triangle”: The price highs seem to have horizontal lines, while the lows are getting higher and higher. This is usually a bull pattern. Take the triangle high and get the new target price from the high point. For example, see May 26, 2003.
Combine the pivot point with other signals such as divergence, multiple tops, trend line breakouts, triangles, etc., and you will have a good idea of where the price is going. Normally you should only enter and exit near the pivot point, but sometimes the distance between the pivots is large, and you should find other evidence to predict the future direction.
As I have always said, trading is gray, there is no black and white, trading is more art than science. When the price encounters a pivot point, you will see that this point has a great impact on the price, so be alert when the price interacts with the next pivot point, it may have a significant impact on the next step.
If you want to catch the main trend of the London time but are worried about the entry point, wait for the next pivot point. The next entry point is near the next pivot point where the price crosses. Or wait for it to come back and retry the pivot point, so that there is no danger of premature entry. Sometimes prices deceive, go in one direction for a while, then reverse the direction, and finally choose the direction. My favorite motto is “Procrastinator Lei”. What you lose is about 30 points at the beginning of the trend, but you are more certain to get the remaining 46 points, because the main trend has to finish its daily average range of 76 points.
I want to remind you that the pivot points above the central pivot point have a selling bias, and the pivot points below the central pivot point have a buying bias. These biases remain valid until the price changes its bias from selling to buying, or buying To sell, that is, resistance becomes support or support becomes resistance.
On June 6, 2003, you will observe that the price deflection in M3 is effective, but the pivot point below the central pivot point has changed from buying or support to selling or resistance. Of course, price decides everything.
Another important point is that when the main trend unfolds (it happens almost every day, in the first 12 hours) you should think along the bias. The bias for trading early that day was short, meaning you should forget how to spell “long”. Scalpers want to make profits in both directions, but it won’t work in the foreign exchange market unless you want to get short haircuts. I say this because the foreign exchange trend is good, do not doubt the trend unless there is a definite reversal signal. In other words, don’t sell too early, and don’t buy too early.
Continue the transaction log. If you always trade in the same way, you will always get the same result.
Nothing says that you have to trade often or daily. In other markets, most professional traders only make very good trades three to four times a week, but this is not the case in the foreign exchange market, where the time period is daily. However, don’t trade if you don’t see a great deal, turn it off and play.
Slow down and obey the speed limit. This is not a racing car. In any case, you control the market instead of being controlled by the market. Don’t force yourself to do uncomfortable things, wait for those perfect opportunities before acting. Don’t do anything or do anything else on bad days. Take control of your transactions, not be charged.
I am often asked about the parameters of the moving average. I use the initial setting, which is as easy to use. In any case, the moving average only uses its deviation.
I said earlier that you should trade at and near the pivot point. The only exception is if you see a trend line break on the bar chart, or a long upper shadow line, to send a clear reversal signal. If the price is between the pivots and you don’t know what to do, do nothing. As in the foreign exchange market, patience is the most difficult.
The main trend of the euro began to emerge from the London time. Before that, the price would entice you to think in the other direction, when in fact it is ready to go in the opposite direction. You are easy to be deceived before the London session begins. You should wait patiently and look for clues from the previous session to find out how the price will eventually go. Do you see the top of the head and shoulders, the triangle shape? Have you seen the price go in a certain direction for a long time? Do you see a divergence from the moving average (on the 1-hour and 15-minute charts)? Is there any channel where the price is trying to break through? Being Fulmers, a little detective work will help you a lot before you take off, as the Boy Scouts say “ready”. Put your emotions in your back trouser pocket and use it later. Treat transactions as masonry works, using the same principles and methods. This is not gambling, this is a serious business, and it is related to your hard-earned money, so you must protect it at all costs.
Someone asked me why I didn’t post my real-time transactions and why I couldn’t call me when I was engaged in transactions. The answer is simple: teach people to fish for a day, teach people to fish, and raise them for a lifetime. And being interrupted during quiet trading hours is very stressful and time-consuming, I believe you can understand. My clients are in more than 30 countries. It would be a nightmare to receive anyone who comes. We are preparing to open a chat room. I don’t know when it will open at the moment. I will notify you in time.
I teach people to fish, not to give people and fish. I remember that when I first learned to trade, my teacher was sitting next to me every step of the way, but one day he moved away and went to a remote island to escape city life. This is good for him, but I am very scared, how can I survive? Ladies and gentlemen, I really learned to trade when I was forced to do it myself. I was really sweaty at that time.
This is a matter for you and the market, and the psychology that controls you. Anyone can learn to trade foreign exchange in my way, but doing good or bad depends on the small voice of your inner doubts, and fear and greed always bite you. What you must master is your psychology, you must have discipline and patience, you must act according to the real signals I teach you, otherwise you might as well go to the local casino to try your luck.
Forex is not a gambling, it is a business, there will be losses and gains. What you keep working hard is to control it when the price is against you. You are the person in charge. You can manage it through smart transactions and good money management. To gain the upper hand. You won’t win every time, but using my system, you will win seven out of ten. The secret is to minimize the loss and let the profits run fast.
Going back to the topic of no instructor sitting next to and acting alone, one of my meta-friends told me how he learned to fly. After the coach had practiced with him a few times in the flight cabin, they landed back to the airport, and the coach turned to him and said, “It’s your turn, I’m leaving.” Speaking of tension and stress, my friend took off and landed back by himself, but his face was pale and his legs trembled. Since then, he has been flying independently, which has become his passion. This means that there is no one to do it independently. We call it “uplifting confidence.” If you can successfully fly or trade by yourself, there is nothing in the world that you can’t do as well. In fact, a pilot who can land on an aircraft carrier can become the best trader. This is another story.
I can tell you that my friend learned more on that solo flight than all previous flights accompanied by an instructor. The same is true for trading, you must believe it if you can do it. Strive to be a master, analyze, read, research, and think. Passionate about trading. Don’t think of it as a way to get rich quickly, do it because of love, just like you do it anyway, even though it can make money. There must be fun in this, just work and not play, you know what will happen.
Don’t misunderstand me, I will answer you if you have any questions. I hope you succeed and spend happy time with your family. When you wrote me to tell me that it changed your life, you now use my method to trade foreign exchange happily and make money, nothing makes me happier than this.
When you feel that you have captured the main trend, stop focusing on the bar chart. Once the trend is unfolded, find a pivot point to enter. Reading the bar chart is to capture the change in the direction of the main trend.
The double top in the downtrend is of little significance, but the double bottom is different. The long lower shadow or double bottom in the downtrend indicates a short-term reversal. Once the main trend unfolds in the short side, pretend not to know how to write long, and follow the main trend closely. The above is the beginning of the London time and the time when the main trend is revealed.
There may be fears at the beginning. Start with the ease and wait for the solid signals you are familiar with before trading. This means you may wait for a period of time or two. It’s okay, don’t worry. I found that some people were eager to prove something, and some felt that they had to shave their scalp every day. I couldn’t understand it. Anyway, you have the right to control, take your time, relax, and enjoy it. Sooner or later you will see a solid signal that you know, so go ahead. When in doubt, don’t do anything, do it if you don’t doubt, pull the trigger.
Unfortunately, you won’t get all the signals needed to pull the trigger every time. Trading is science and art. You cannot be 100% sure. If you wait for all the ducks to line up, it will take a long time. My favorite analogy is: you sit in the garage and want to go to work, and you wait for all the lights on the road to turn green before driving. Think about it, you will never get to work. The same is true for trading, sometimes you must make a knowledgeable guess and then set off. You will not be right forever, but this is not something that is right or wrong. It is a question of making a decision and sticking to it, turning when necessary. Accept the fact that you were stopped by a loss as if God kicked you to a higher level, one step closer to success.
Thanks to Tom for this one: When the pivot point (M1, S1, S2, main pivot point, etc.) is reached for a certain period of time, there are only two options, long or short. The basic rule is: go long (buy) at the pivot points of S1, S2, M1, and M3, and go short (sell) at the pivot points of R1, R2, M2, and M4. Obviously, the problem of long and short is not so simple. It needs to be based on other indicators such as divergence from moving averages, bars, trends and patterns. Tom, the road is long.
As mentioned earlier, you should buy or sell near the pivot point. But if the price hovers between the pivot points and forms a double top, I believe the price will go down. So sometimes you will act before you hit the pivot point. Of course, it’s not an exaggeration to wait until the price is up.
Thanks to Harry for this article: He pointed out that I sometimes referred to “price projection” and asked what it meant. Simply put, it is a price reversal pattern. The middle column has a higher height than the two sides. The middle column is a reversal column, triggering a reversal, and the price reversing downward. The same is true for the price reversal. The middle column is lower than the two sides, and the middle column is the reversal column.
The key to success in anything is repetition, including foreign exchange transactions. The more you train in trading and the more you do for real money, the better you will do. You must persevere, over and over again, it’s perseverance. If you keep doing it and don’t give up, everything can be done well. Don’t be scared off by the market. When you lose money, you just treat it as experience, learn from your mistakes. Keep writing notes, if you don’t write, it won’t exist.
My impression is that some people have not paid enough attention to the trend line. The trend line is powerful, and the price breaks through the trend line and will turn, no matter what other indicators say. So draw a trend line and let it be your guide. Remember: in the growth trend (such as June 25, 2003), as long as the trend line is not broken, buy if it is low. In a downtrend, sell on a rebound. Never try to go short in the uptrend, never try to go long in the downtrend, it’s that simple.
Thanks to Stu for this article: I have always said that moving averages are only used for divergence, but Stu is right. I accidentally (such as June 25, 2003) also used it to confirm the trend. If the price trend has been going downward for a long time, then when the price goes against the trend, it is very likely that it is just a callback or a temporary reverse movement. I usually follow the main trend closely, sell and rebound in the downtrend, and buy back down in the uptrend.
Some readers asked me what happened on Friday, June 27th. There are so many huge bars in the 15-minute bar chart. It was a difficult day, even for experienced professionals. There are many seesaws, many stop losses are executed, and trading patterns are dominated by quarter-end swaps. This is a day to watch. Be prepared next time you encounter the end of the season, mark it on the calendar, next, next. Trading must be good at it, but also organized and prepared.
Marathon runners only think about one thing on the way: cross the finish line. They never look back. The same goes for trading, you should focus on long-term survival. Of course, sometimes you fall, but you just have to get up and move on. The victor does not give up and the abandoner does not win.
Beware of festivals like the weekend of July 4th. Trades are clear. It is difficult to produce meaningful pivot points. It is best to play and forget about it. No one says you have to trade every day and have your own life.
If you have trouble finding the entry point, I suggest you wait for the hammer or elongated top to appear, and then pull the trigger. You may wait for a long time, but at least you can be sure that you have found a good entry point. This kind of candlestick is a reliable forerunner of a price turn. Look at any bar chart, you can find out how many such candles, you will be surprised there are so many.
I just attended a gathering of young traders. They have only been in the foreign exchange market for two and a half months. They are improving and I am proud of them. I think it will be helpful to pass their observations to you.
They have learned to trade short-term and are learning to use longer periods of time to find clues on the 1-hour chart. They believe that the signal on the 1-hour chart is stronger than that on the 15-minute chart. They say you should wait for the signal to be confirmed on the 1-hour chart before acting, unless of course you see evidence of iron on the 15-minute chart. Ladies and gentlemen, trading is gray. These ideas work for them, but it doesn’t mean you can’t give it a try. If you try and it works, please let me know and I will share it with other party members.
Thanks to Bill, he pointed out that the hammers between 3:01 and 5:01-6:01 on the map on August 22, 2003 did not work. My answer is: these candles need to be used in conjunction with other indicators to determine the direction of the price. For example, in the above example, the downtrend line is not broken, so the effect of the hammer is eliminated. In short, the steering signal contained in the pattern should be accompanied by other signals, including pivot points. In other words, what happened to the price at the pivot point when you saw the hammer? Does the pivot point support what the candle says? Thank you Bill.
Recently someone asked me where to find foreign exchange trading volume. There are no well-known websites, and there is no need, because foreign exchange is a circulating market, and the trading volume is surplus. You only need technical analysis to do foreign exchange transactions.
There are some news to be concerned about. I used to call for more euros and Swiss francs. As expected, the bad employment news in the United States on September 5, 2003 made the two grow stronger. In the foreign exchange market, news is not bad news.
There are “talking” bulls and bears, and “real” bulls and bears. The real bulls and bears are reflected in the trading volume and unwashed orders. Of course, these data do not exist in foreign exchange transactions, but there are in the futures market. Because futures are mainly used for speculation, these data provide perceptual clues.
Turning points in the foreign exchange market are often accompanied by extreme unfilled orders, indicating extreme speculation. The key here is to see the extreme levels of unfilled orders and trading volume, indicating the possible turn of the trend.
The number of unfilled orders is rarely useful during the day, but predicting changes in trends through unfilled orders and volume, or knowing extreme speculation in a currency pair, is valuable information for traders using any time period. By studying the futures of a currency pair, you can improve your chances of detecting the currency’s bias and predicting its future direction.
For example, on September 2, 2003, commercial traders were extremely long euro and Swiss franc futures, while currencies were extremely short. When you see the extreme differences between these two camps, you know that prices may follow commercial traders.
The euro and the Swiss franc represent a good mid-line long opportunity, a good opportunity to buy and retain. Sure enough, on September 5, 2003, the United States released very bad employment information. The two have grown up. Who can guess?
I think there is a misconception that you must only use 15-minute chart trading. You can also trade with 1-hour and daily bars, but the cycle is extended. For example, when I call more euros and Swiss francs, you can place an order from the daily bar chart and keep it, or you can wait for a reasonable entry point to appear on the 1-hour chart before entering.
For novices, it is best to avoid Monday, after the long weekend or at the end of the season, these days there are a lot of swaps.