Forex Trading Strategies 3

Currency Trading Strategy Number 13:
Only use “reading bars,” MACD divergence, pivot points, and
trendline analysis in your forex trading toolkit. That’s all you need for
this market. Be a technical bigot. Focus on pure technical analysis,
and avoid funnymentals. Even news is factored into price action, so
you don’t need to be up on it each and every nanosecond. If you
don't have my .pdf file on reading bars, please send me an e-mail,
and I'll forward it to you: prbain@tradingsmarts.com As was pointed
out to me by a client, "reading bars" includes spotting double, or
even triple, tops and bottoms.

Currency Trading Strategy Number 14:
And now for the tough part. I know my documentation says that the
forecast low and high for the next trading session can be M1/M3 or
M2/M4. However, trading is shades of gray. It is not a black and
white business. If it were, the world would be paved in gold, and
everybody would be rich. Now, we wouldn’t want that would we? The
forex would be nothing more than a Church at the end of a road
connected to a river bank at the other end with nothing in between.
The point I am trying to make is that the “actual” low and high for
the next session could very well be any combination of M1, M2, M3,
and M4. It could be M1/M4, M2/M3, or combinations of the other five
pivot points. The M1/M3 and M2/M4 calculations are just guideposts,
but are not poured in concrete. Price is the number one indicator. It
will determine what the low and high are going to be. And one other
thing, you should use these forecasts in conjunction with the other
three “tools” in your forex trading toolkit – “reading bars,” MACD
divergence, and trendline analysis. In other words, if price has been
trending down from the past session into the current one, price is
trading at, say, M3, and price is still going down, then M3 may very
well be the high for the new session, regardless of the fact that my
system may have called for M4 to be the high. So, use the pivot
points in conjunction with other three possible signals – “reading
bars,” MACD divergence, and trendline analysis. I have seen it
happen, as in the example just given, where price was trending down
from one session to the next right through M3 at the open of the
next session – simultaneous with the formation of a “double top” bar
pattern. Well, there you have three indications that price was headed
south for sure. And, I believe MACD was also trending down in that
particular case. So, that was another clue that the high for the
session had probably already been put in.

Currency Trading Strategy Number 15:
When you are first starting out, pick one currency of the four major
pairs (EUR/USD, USD/JPY, GBP/USD, and USD/CHF) to trade, and
become a specialist in it. I would personally recommend the Euro,
especially if you are going to be asking me questions, as that's what
I focus on with my clients around the world. Get to know its rhythm.
When you are doing well with it, then move on, and trade the other
three major pairs, as you see fit. When you are in learning mode,
you will have your hands full trying to figure out what to look for,
and how to manage your trades – enough so that you don't want to
be skipping back and forth between currencies.

Currency Trading Strategy Number 16:
Keep a log of all your trades – both good and bad. Analyze where
you went right and wrong, and vow not to repeat those situations
that could have been done better. This is all part of being organized
as a "professional" trader - with good habits. This is not about gunslinging
and winging it with "Hail Mary" passes.

Currency Trading Strategy Number 17:
Important point here: If price action opens in the upper end of the
projected range for the session (all the way up to R2, and beyond) –
in other words, in the sell area (that area above the central pivot
point) – and there are other suggestions that price is too high (such
as a particular bar reading, MACD divergence, or trendline breakout),
then price has probably achieved the upper end of its price range for
the session. The same holds true where price action opens in the
lower end of the projected range for the session (all the way down to
S2, and beyond) – in other words, in the buy area (that area below
the central pivot point) – and there are other suggestions that price
is too low (such as a particular bar reading, MACD divergence, or
trendline breakout), then price has probably achieved the lower end
of its price range for the session.