70 PIP TRADE DAY TRADING STRESS VS SWING TRADING BLISS - forex turtle trading system pdf

70 PIP TRADE DAY TRADING STRESS VS SWING TRADING BLISS ~ forex turtle trading system pdf

The recent 70-Pip trade made on the AUD NZD highlighted the main challenges faced by the typical Day Traders using the Lower Time Frames. This trade required entry at the Bullish Candle Signal that started a breakout from a Range and a large Pennant Consolidation on the Daily Chart. However, Day Traders would have encountered a more volatile picture on the smaller charts that would have severely limited their profitability during this Bullish breakout.

The charts below show the breakout that started the trend that provided the trading gain. Entry took place immediately at the close of the Bull Candle with the Stop Loss and Profit Targets set according to the rules of the strategy.

DAILY CHART - SIGNAL

DAILY CHART - TRADE RESULT

This was a simultaneous breakout from a large Pennant Consolidation and a Range setup at its Resistance.


DAILY CHART- TRADE SETUP

In contrast to this fairly straightforward setup, many Day-Traders on the 30 Minute Chart would have faced a more challenging scenario. As we can see in the chart below, the Bullish Candle on the Daily Chart was actually formed by a Range breakout on the 30 Minute Chart.

30 MINUTE CHART

Many Day Traders would have avoided entry here, however, given the size and volatile nature of the candle. The large wick on that candle would also have suggested the end of the breakout, while the subsequent reversal and sideways pattern limited any possibility of a profitable trade. 

  
Nevertheless, a trading possibility eventually appeared on this time frame in the form of another Consolidation breakout.


30 MINUTE CHART- PENNANT TRADE 

Entry could have taken place at the Bullish Candle that broke Resistance with the Stop Loss at the Support area. Unfortunately, the breakout for this would have been limited to only 15 Pips ahead of the reversal a few hours later. For scalpers, this 15-Pip gain would have been a good trade, but for others holding out for more, breaking even or incurring a small loss would have been the result. Yet for others who may have held out in hopes of a turnaround, a total loss on the trade would have been suffered.

Following this period, the currency began to move sideways in a volatile pattern, offering very little in the way of tradeable setups. 

30 MINUTE CHART - VOLATILITY

Those aiming for small Pips may have been able to scrape out a few more to add on to the 15 Pips. However, the sharp reversals and spikes would have made this a very stressful, losing endeavor. Others aiming for more would also have been left without any opportunity to compensate for the previous losses.

The results from this type of trading over the long-run are often lower than expectations despite the attraction of the smaller charts. The greater volatility and the need to continuously monitor the market at all hours of the day can take their toll on a trader. For Swing Traders on the other hand, only a few hours are spent trading and analyzing the market prior to entry. Instead of aggressively battling a large number of candles at a time, only a few candles stand in the way between entry and profitability.

DAILY CHART - STRESS FREE TRADING

Trading can be a lot more enjoyable and profitable than what many are led to believe. If this is done using the higher time frames that reward the trader rather than the smaller time frames that reward the broker, long-term gains will be made.  Spikes that come out of no where to take out our Stop Losses and unexplained pullbacks that reduce our profits can all be avoided.

By using my Methodology and emailing the Code at the end of the Manual and you will also benefit from;

• Detailed Trade Setups sent 30 Minutes before Entry;
• Daily Analysis of Currency Pairs;
• Weekly Technical Analysis on Specific Topics;
• A Currency Trading Experience focused entirely on Making Money;

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(M.Sc. Economics, B.Sc. Management and Economics)

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Twitter: @WorldWide876

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Swing Trading vs Day Trading Has the Debate Ended - omni forex trading system review

Swing Trading vs Day Trading Has the Debate Ended ~ omni forex trading system review

Within the context of the ongoing debate between Swing Trading and Day Trading, these early results from my Methodology appear to tip scale decisively towards Swing Trading. Only 7 trades have been done so far and to date, the results have already beaten the Year-to-Date returns of 80% of the Top Traders Ranked by BarclayHedge. With only 9 trades left for this strategy to generate a 100% return for my clients (sadly, cost of Manual will go up accordingly- see Table), Day Trading may soon by a thing of the past as you spend less time trading and more time earning.

Currency Trading can be a very lucrative means of earning income on a short and long-term basis. The most popular way of doing this by traders has been to profit from the intra-day changes in a currency’s value, during the most liquid trading sessions of the day. However, given the difficulty of consistently modelling the random price behaviour of a financial asset class at this micro level, sustainable success from this approach can be an elusive goal. Instead, if traders focused on the clearer trends provided by the Larger Time Frames, they can achieve of more consistent rate of success.

Swing Trading takes advantage of the clearer and more reliable breakout signals and trends of the Daily and 4 Hour Charts. It is a style of trading that is similar to Long-Term Trend trading in which positions are taken based on the longer-term fundamental value of a currency. However, given the time horizon of Swing Trades - 2 to 7 days- some of these trades will either be in line with that value or diverge from it in the short-term.

Among the benefits of Swing Trading are;

• Stronger Trends with Larger Pips per Trade;
• Accuracy of Signals, with fewer False Breakouts;
• Predictable Times for Analysis and Trade Execution;
• Fewer Trades needed for Large Rates of Return;
• Compatibility with a non-Forex 9-5 Schedule;

This style of trading also allows traders to sidestep the volatility surrounding the release of macroeconomic data each week. Several important reports related to the major currencies can provide an indication about market direction during the day. Nevertheless, due to the subjective and conflicting interpretation of these by traders, large spikes in prices tend to appear, taking out small Stop Losses and eroding the Day Trader’s profitability.

In addition to the significant personal benefits, Retail Traders will also be better able to offer their services to Prop Trading houses and Hedge Funds that want this style of trading - earning very large commissions in the process. Based on these early results...

RATE OF RETURN FROM METHODOLOGY

...this should not be hard to do.

 

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(M.Sc. Economics, B.Sc. Management and Economics)

Currency Analyst/Trader

Contact: shepherdduane@gmail.com

Twitter: @WorldWide876

Facebook: DRFXTRADING
Website: www.drfxswingtrading.com

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800 PIPS ON OFFER FROM GBP USD DECLINE - trading system forex octopus

800 PIPS ON OFFER FROM GBP USD DECLINE ~ trading system forex octopus

Having formed a small Pennant just below the major Resistance of a larger Pennant, the GBP USD could be headed towards the Support area some 800 Pips away. If we see a strong bearish signal below the Support of this smaller Pennant, traders can expect a big payday in the weeks ahead.


DAILY CHART- LARGE PENNANT

• Formed following the end of the safe-haven buying of US Dollars during the Financial Crisis;
• Has now pulled back to the Resistance of the Pennant following a breakout;
• Could break Support to continue the new Downtrend in favour of the USD to reflect the end of Quantitative Easing;

This downtrend has been in place since July this year after forming the high of 1,7190.


DAILY CHART - DOWNTREND

  



If this downtrend is going to continue, we will need to see a convincing bearish breakout signal following the test of the Support of this smaller Pennant.


DAILY CHART - PENNANT SETUP

 Over 800 Pips of profits would be offered during this breakout. Some traders will enter and hold their position for the entire duration of this decline, while most will take gains and re-enter according to their profit goals and holding period constraints. But given that these trends have...

1. False entry signals;
2. Pullbacks & small Consolidations;
3. Weak Stop Loss areas;

...how do you determine when to enter and where to place your Stop Loss to protect your trade from the natural waves of the market? How do you know which time frame to follow in case the trend starts to reverse unexpectedly before that Support area is hit?

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Duane Shepherd 

(M.Sc. Economics, B.Sc. Management and Economics)

Currency Analyst/Trader

Contact: shepherdduane@gmail.com

Twitter: @WorldWide876

Facebook: DRFXTRADING 

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RATE OF RETURN NOW 13 0 ON SMALL AUD CAD TRADE - forex odyssey trading system

RATE OF RETURN NOW 13 0 ON SMALL AUD CAD TRADE ~ forex odyssey trading system

This trade was intended to take advantage of a sharp breakout short from a Pennant Consolidation, with the target set for its Breakout Equivalent. All Consolidations have Breakout Equivalents (B.E.) - it is the area that they break towards before pulling back. They will either pause here to then resume the trend or become volatile and reverse. Nevertheless, once spotted and measured accurately, one should either be exiting your trades there (see the AUD USD 148 Pip Trade and the AUD NZD 70 Pip Trade) or avoiding entries at these areas altogether.

In this instance, the pair had already broken out from a previous Range and was now breaking a Pennant. 



DAILY CHART - AUD CAD

(FXCM Charts used for Trade Signals- Dukascopy used for Live Trades)

Based on the way I had originally measured the B.E. for this Range, it would not be hit until a few hundred pips. However after analyzing the chart again for confirmation that my Entry Setup was correct, I realized the error and exited immediately. This provided only a small gain of 9,6 Pips, but was much better than what would have taken place if it was left any longer.


This was the entry setup on the 4 Hour Chart. It required waiting on the market to pullback so that my Stop Loss would have met the criterion in the strategy.


4 HOUR CHART - TRADE SETUP

Entry then took place as the market pulled back to trigger the entry but shortly after, I realized that this B.E. was actually at the Entry Price of my trade.


DAILY CHART

Luckily I was able to come out before the rally took place, which would have taken out the Stop Loss.


DAILY CHART- PULLBACK

Following this trade which pushed the rate of return to 13.0%, my Subscribers are still 9 trades away from a 100% return.

RATE OF RETURN FROM METHODOLOGY

The FXCM Demo Account that you will see in MyFxbook does not reflect this trade. The entry order was not triggered due to the natural differences in prices that takes place across trading platforms.


Mistakes like these are par for the course. Sometimes they lead to large losses, but sometimes you get lucky with only a small loss or gain. It can be very difficult to exit a trade that has the potential for large gains. However, this is perhaps the best trading decision that one will make when large sums of your funds or those of your clients are at stake.

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Duane Shepherd

(M.Sc. Economics, B.Sc. Management and Economics)

Currency Analyst/Trader

Contact: shepherdduane@gmail.com

Twitter: @WorldWide876

Facebook: DRFXTRADING
Website: www.drfxswingtrading.com

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USD JPY BREAKOUT SHORT CRISIS LOOMING - forex day trading system simple 1m scalping strategy

USD JPY BREAKOUT SHORT CRISIS LOOMING ~ forex day trading system simple 1m scalping strategy

As we continue to struggle in a very low liquidity environment for the Currency Market, the USD JPY has also fallen victim to the absence of meaningful, tradeable volatility. This has led to the formation of a 145-Pip Range within which the pair has moved since the middle of April this year. Short-term aggressive traders may have profited from this period of market indecision by trading between Support and Resistance despite the erratic nature of the candles. However, those focused on the larger picture could be rewarded for their patience with a strong bearish breakout of 300 Pips that seems to be looming following the break of two previous Uptrend Lines. 

The chart below shows the Range within which we have been for the last 3 months. Traders who enter and use the Resistance and Support boundaries for Stop Losses would have done so at the 102,75 and 101,30 price areas, respectively.

DAILY CHART

Trading based solely on Support and Resistance without strong candle signals can be a very risk strategy given the possibility of large price spikes at these areas. The absence of such strong candle signals also leads to unexpected Double Tops and Bottoms that appear at the mid-point of these Ranges. On the other hand, if these Range traders were to instead take a broader look at this currency pair, they would see the potential for even larger gains in the next few days.

The chart below shows that this Range is actually sitting atop the Outer Trend Line that has been in place since November of 2012. We can also see that the movement to this Trend Line followed the break of two Inner Trend Lines.

DAILY CHART

In general, trend reversals tend to occur whenever there are successive breaks of trend lines and/or long periods of indecision and sideways patterns. Whenever they are as large as the patterns that we are seeing here, however, they are usually associated with a major change in investor sentiment such as with the GBP USD prior to the safe-haven trading of 2008;


DAILY CHART - GBP USD

And the return of risk-appetite to the markets in 2009;


DAILY CHART - AUD USD

Given that we are seeing something very similar with the USD JPY, we are very likely to see a significant trend change associated with another major shift in market sentiment. If this actually takes place, it is likely to start with a break of the Support of the current Range setup.

DAILY CHART

Even though such a major trend change could last for several months, lets  examine what can take place in the very short-run period of 7 to 14 days.

As the breakout begins, there will be several price points of Support to provide traders with good exits for their trades. However, given the precocious nature of breakouts, the trader would need to know beforehand that a particular Support point targeted for profit, will in fact be hit before the trend ends.

This is where the concept of the Breakout Equivalent becomes useful. It measures the distance over which the breakout is expected to take place before coming to a slow or abrupt end. Knowledge of this price and how to measure it allows traders to set their pre-determined pip targets with greater certainty and avoid the trap of unexpected reversals. If this breakout actually takes place in favour of the Japanese Yen, the Breakout Equivalent target would be at 98,40, some 300 Pips away from the current price. 

This concept can be seen throughout the Currency Market, with the USD CAD providing a very recent example.

DAILY CHART - USD CAD

In this case, the Breakout Equivalent took us very close to a major Uptrend Line that started in September of 2012. You will also notice that the breakout signal was strong enough to give traders the added confidence that we would not fall into the trap of a False Breakout to go long. Once a strong enough signal is given to start a breakout, pre-determined targets can be comfortably set to capture between 100 and 200 Pips (125 Pips in this example). 

Another major issue related to these setups is the holding period for our trades. Breakouts can last anywhere from a few days to a few weeks depending on the speed of the market and the size of the Consolidation. This means that two currency pairs with similar size Ranges can reach their respective target at different times. Given that we do not necessarily want to hold our trades open indefinitely, what would determine our decision to stay in these trades for 4, 7, 10 or 14 days?

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Twitter: @WorldWide876

Facebook: DRFXTRADING 

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A platform a shareware site and some courses for quant traders - forex traders secret strategies

A platform a shareware site and some courses for quant traders ~ forex traders secret strategies

I mentioned in various places that Alphacet Discovery is an industrial strength integrated platform for backtesting and implementing quantitative trading strategies. But of course, it has many competitors, one of which is a relatively new company called Deltix. Deltix has the distinction of offering a full Matlab interface, which is convenient if you are already a Matlab programmer. (Full disclosure: I previously have a consulting relationship with Alphacet, but have none with Deltix.)

There is also a new website for sharing trading strategy software called Quantonomics. In the words of its founder Joshua, the goal is to "connect programmers and stock traders". Joshua also told me that he will create a custom application on his site for any of you readers as a gift!

A colleague of mine in Singapore, Dr. Li Haksun, who was previously a quant with UBS and BNP Paribas, is offering a course on quantitative trading strategy in July. It covers more theoretical concepts than my own courses: e.g. hidden markov model, stochastic control, and Kalman filters are included.

And of course, my own workshops on Backtesting and Statistical Arbitrage will be offered again in London next week.
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THE POWER OF PRICE ACTION FOR DAY SWING TRADERS - mechanical forex trading system

THE POWER OF PRICE ACTION FOR DAY SWING TRADERS ~ mechanical forex trading system

The power of Price Action analysis is its capacity to predict the formation of major market patterns across all Time Frames. We can forecast movements that will take place the next day or even in the next few months and prepare our trading plans to take full advantage of them ahead of other traders.

On Monday August 10th last week, the EURO USD was expected to provide a Bull Candle to indicate a Rally to the Resistance of a Pennant that was being formed. This Rally would complete the Support boundary and the Pennant Consolidation itself. 

DAILY CHART- EURO USD  

A pair of Double Bottoms were already given in addition to the the break of the Downtrend Line. This suggested that another Bull Signal would be given/needed to confirm the start of the move to Resistance and that a potential trading opportunity to go long was near. Two days later, this took place...

DAILY CHART- EURO USD  

...a strong Bull Candle Signal that offered traders up to 100 Pips of potential gains on that day. Not only would they have been able to predict this movement a few days in advance, they would have also seen this pattern in its early stages months ago in June this year...

DAILY MARKET UPDATE OF JUNE 23, 2015

(Provided to Clients)  

As you can see, the bearish and bullish waves that were predicted have now taken place. Although the bearish wave was actually larger than expected, traders would still have expected this U-Turn and rally to take place to complete the Pennant and temporarily end USD gains.

With this strong Daily Candle now given, traders on the 4 Hour Chart or lower would have been entering to go long to take advantage of the expected rally higher. However, based on the 3-Wave Rule that the Methodology in the Manual explains, this would have been dangerous.

The chart below shows that the uptrend on this time frame was very strong and that a Bullish Signal was given at the Uptrend Line to indicate the continuation of this rally. This would have been a natural expectation since U-Turns at Trend Lines are common entry signals especially if they coincide with Support areas.

4 HOUR CHART UPTREND

Nevertheless, as pointed out to traders in the Daily Market Update, entry at this 4th Setup was risky and should not be done based on that 3-Wave Rule. And as can be seen in the chart below, this decision proved to be the right one...

4 HOUR CHART VOLATILITY AND TRADING LOSSES

This 3-Wave Rule is crucial to avoiding pullbacks and periods of volatility that lead to these unexpected reversals (Pages 35 & 36). It can be seen across all time frames with strong trends and explains a large part of why trends will either pause before continuing or change direction altogether. 

Another important Price Action pattern that will prevent these types of reversals affecting your trades relates to Breakout Setups & Signals. We will often see a strong breakout candle from a Consolidation Setup that appears to signal the start of a strong move and large gains for us. However, if this Consolidation is too weak, the trade will not be successful despite the strength of the Breakout Candle. An example of this took place on the USD CHF Daily Chart where a very strong Bull Candle appeared to promise hundreds of Pips of profit in the days ahead. Again, the danger of this trade was pointed out in the Daily Market Update when that signal appeared...

DAILY MARKET UPDATE - AUGUST 4, 2015

...a warning that proved correct a few days later...

USD CHF DAILY CHART - SHARP REVERSAL

This reversal took out several Long Positions that were gradually being opened after that initial Bull Candle Signal. A similar scenario was seen on the NZD USD which was breaking below its Counter Trend Line (CTL) on the Daily Chart to resume its Downtrend. Despite the strength of this CTL that was being broken, the candles themselves were too weak to justify entry..

NZD USD DAILY CHART BREAKOUT

Yet, on the 30 Minute Chart, this appeared to be a strong enough Downtrend that would have led many to open short positions...

30 MINUTE CHART DOWNTREND

Once more, the market had other ideas due to the weakness of the Daily Chart`s Signals and what normally follows...

DAILY MARKET UPDATE - AUGUST 10, 2015

NZD USD DAILY CHART PENNANT

30 MINUTE CHART REVERSAL

The failure of these last 2 setups to lead to breakouts highlights the importance of Section 5 in Part 1 of the Manual, applicable to both Trends and Consolidations...

With the power of this Price Action Trading Manual in your hands, you will sidestep these traps of the Currency Market and focus on the Setups that offer the greatest chance of profitability. You will be able to identify the strongest Setups and Signals that lead to large breakouts...

AUD NZD BREAKOUT SETUP

...setting profit targets that maximize on the Pips captured...

...exiting comfortably ahead of sharp market reversals...

...avoiding moments of regret from holding trades longer than we should...

As you go through the Manual and begin to apply it to your trading, you will be the one in control of the Forex Market. With the Daily Market Updates and Videos that provide in-depth analysis, forecasts and explanations of market moves based on the theories and techniques never before seen in this book, Profitability and Long-Term Wealth will be yours.

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