Forex Trading Strategies 2

Currency Trading Strategy Number Seven:
If MACD is trending down on the 15 min chart, and price is wanting
to go north, price will sooner than later head south as it perhaps
bounces off a pivot point, or gets turned around at a juncture caught
by one of the other three “tools” you should be using (“reading
bars,” MACD divergence, or trendline analysis). Same thing if MACD
is trending up, and price is trying to head south.

Currency Trading Strategy Number Eight:
Only use MACD for divergence, not for buy or sell signals. It is a
lagging indicator, and as such is useless as a trigger. It is too slow
for that in the forex world.

Currency Trading Strategy Number Nine:
Again, MACD divergence on the 15 min chart is more significant than
what you see on the 1 hr chart in the near-term. For those of you
who don’t understand what divergence means, keep looking at my
own personal forex trading examples on this page on a daily basis for
examples of divergence. Basically, what it means is where you see
MACD waves “waving” in the opposite direction to price action. That’s
why I connect the top of the waves (in a downtrend) and the bottom
of the waves (in an uptrend) to illustrate that the waves are “waving”
higher in an uptrend and lower in a downtrend – in the opposite
direction to where price is going.

Currency Trading Strategy Number 10:
Always “protect” your money by using 20-30 pip stops. Mental stops
are okay, but not if you are dead serious about using a “disciplined”
approach to managing your money. You will lose three out of ten
trades. The three losses should be kept to 20-30 pips. Your wins will
by far surpass your small losses, and that’s what stop-losses are all
about. Don’t be afraid to lose. Even professional batters strike out six
out of 10 times. Lions are only successful 20% of the time in their
chase for the kill. Professional golfers lose 95% of the time.
Professional poker players lose 50% of the time. So, your chances
are better at trading the forex, using my system of course, than in
any other venue. Even businesses have “bad inventory.” And, life in
general is not always “100%” for sure.

Currency Trading Strategy Number 11:
That all said and done, if you entered a trade close to a pivot point,
or a particular significant bar pattern (like a double top, for instance,
or a trendline breakout), place your stop on the other side (but not
too close to) the event that caused you to take action. This is
because price has a tendency to snap back to that situation that
caused it to bolt away from it in the first place. If you follow the 20-
30 pip stop rule, but a 33 pip stop on the other side of that event
would safeguard you against such a reaction, then so much the
better. So, yes the stop rule is 20-30 pips, but within reason of
course.

Currency Trading Strategy Number 12:
Stops (read “stop-loss”) are for insurance purposes only – not
necessarily for taking profits. However, you can most certainly
employ “trailing stops,” whereby you keep moving your stop up (or
down, whichever the case may be) to protect your profits, as price
advances, or declines.