the reccomended forex currency
forex pairs are: GBP/USD
we work by 0.1 lot at every 400$
we put two forex orders at 10.30 in the morning (at winter time) according to Moscow (opening of Europe session+30 minutes Moscow time):
1) buy-stop on the maximum price (+1 point) of the current day
stoploss on the minimum price (-1 point) of the current day.
take forex profit is defined in such way: strain the lines of Fibonacci from price maximum of the current day to price
minimum of the current day at 10.30 in the morning and take price value of Fibonacci's line 161.8 in the capacity of take profit (visually)
2) sellstop on price minimum (-1point)of the current day
stoploss on the price maximum (+1poin) of the current day
takeprofot is defined in such way: strain Fibonacci's lines from price minimum of the current day to the price maximum of the current day at 10.30 in the morning and take price value of
Fibonacci's line 161.8 in the capacity of take profit (visually)
we close unclosed forex market positions at about 00.00 at Moscow time (or earlier at 22.00-23.00)
we delete not worked forex orders
that is all!
if at a point of installation of the order at 10.30 forex market (current) price is equal to maximum or minimum of price of the current day, we put order on minimal possible distance from current price (it is usually 10 points) or we wait for rollback or
just open position at the current price.
if at apoint of installation of the order at 10.30 the difference og prices from minimum to maximum more than 50-70 points (strong price movement), we do not sell at this day or sell by trend with takeprofit of 20-30 points
Forex Trader Info - Visit
Showing posts with label forex market. Show all posts
Showing posts with label forex market. Show all posts
Saturday, October 18, 2008
Monday, October 13, 2008
Handy hedge free forex strategy
It’s a simple mechanical forex hedge trade of GBP/USD that I enter with a 5 pip take profit on the long and the same on the short ---- both trades are entered as closely to each others price as possible and the whole concept is based on the intraday reversals that EVERY forex currency goes through and the intraday reversals they make WITHIN the reversal! My spread is one pip!
I DO NOT USE A STOPLOSS!
I enter a minimum of 45 minutes before the forex market reversals in the US which can be considered as MAJOR at NOON, EST and MIDNITE, EST.
I use the minor reversals at 10:30 AM, 1:30 PM, 5PM, 8PM, 10:30 PM
NONE of these times are written in stone unfortunately, but on a very VERY high average hold true - sometimes the NOON reversal happens at 11:30 AM if the banks feel its time to reverse, but invariably the trade will come in if you get stuck there --- simply takes a few hours then.
I had been forex trading this without entering a weekend trade, but last week I did as an experiment and it cleared nicely came Sunday night --- I wouldn’t run right out and do that if I were you, but its something to consider.
if you observe the forex market, you will notice reversals every 1.5 hours ( WHICH USUALLY DO NOT ALTER THE LONGER TREND, such as on the H1), as the longs get out and the shorts come in (or the forex brokers now short the run-up to make THEIR profit against your long, or to simply hit your stop-loss, take your shares, and then run the price up again -- that way they make twice as much while you sit there wondering what happened to your nice profit on the long forex trade !
IF THE REVERSALS COME IN EARLY, count one and a half hours to expect the next -- somewhere on down the line the banks will get back on schedule, but its good to be ready for them a little early -- rather than late!
Essentially, that’s it --- cause there really isn’t much to it except leaving the basket under your floppy drive to catch the money dropping!
TEST IT --- it works for me, even when I enter late and suffer a days drawdown, but DONT enter LATE and don’t suffer, which is kind of simple to remember and is the ONLY rule I can think of.
The whole thing with the trade is the range of GU --- even if you get stuck in a trend change, the "noise" of the forex market with up and down movements at that point, will invariably take out your 5 pips!
But 5 pips here, and 5 pips there and do it enough times in a day, and then a week, and it begins to look like real money after a while.
It’s forex mechanical and has no rules except DONT ENTER LATE and while some probably think there is not much to be made, try throwing 5 or 10 lots on each side, 5X a day, and tell me then!
BTW - YOU don’t do that for a long long time - greed is what kills graveyard dead!
Another reversal time
the next hedge will be at 9:15 pm, est for the 10:30 pm reversal -- after that will be the 12 midnite reversal, and you place the hedge at 11:15 pm, est.
try it a few hundred times and i think youll like it
mp
I LOVE the intelligence of this thread, even when they nail me --- like a welfare child, your post fell thru the cracks and i apologize.
and as far as i remember, the times DO NOT change with standard or daylight savings time.
mp
Summarized Times
EST GMT - 45 minutes - 1 hour
1030 1530 1445 1430
1200 1700 1615 1600
1330 1830 1745 1730
1700 2200 2115 2100
2000 0100 0015 2400
2230 0330 0245 0230
2400 0500 0415 0400
Background
This trade is NOT affected in any way by the DAILY trend, but rather the absolutely NECESSARY intraday reversal trend and the point that the market makers reverse a trade so THEY can make money and grab more shares !
There are a few purposes behind these reversals, but mostly by stopping and reversing price the mm's get MORE shares at a lesser price to continue a bullish runup AND/OR they make money against your long by now shorting, where most people will now sell and they buy more shares at a lower price to short on the way down as people bail their long positions. Of course, reverse this for a forex market thats moving down!
Now at the bottom, because of averaging down, they own MANY shares at a lower price and now they run the price back up, taking profit on the long side with their cheaper shares !
Lets say they run a currency up to 1.9000, at which point they reverse down to 1.8000 - almost everyone except long term holders will bail their positions (its SO human nature) to take forex profit, as they sell at a steadily decreasing price OR THEIR STOP LOSSES ARE HIT !
DO YOU SEE SOMETHING IN THAT LAST FOREX STATEMENT ???
Now the price is down to 1.8000, the mm's now cover by buying all these shares but at a 1000 pip advantage to where the currency was 15 mins ago, and UP THEY GO AGAIN, with lots more shares to sell the retail trade, but they got em CHEAP !!
Its often called a "headfake" because they fake you into thinking the price will now go down forever, scaring you into selling or forcing your stop losses --- Its HOW the rookies loose money and the mm's do it with glee !
PRO traders are the BEST forex day traders in the business and are well rewarded for being so - their job is to MAKE money for the company they work for and not care much about how they do it !
FOREX Trading, at least to this person, is KNOWING what theyre doing more than simply knowing when to enter and when to exit ! Theres a lot of pros out there, and they dont give a rats rump about any of us - rather they really dont like us at all, but will quickly grab our money !
of course, when forex trading with no sl, one better know the trend and NOT trade against it !
love and kisses
I DO NOT USE A STOPLOSS!
I enter a minimum of 45 minutes before the forex market reversals in the US which can be considered as MAJOR at NOON, EST and MIDNITE, EST.
I use the minor reversals at 10:30 AM, 1:30 PM, 5PM, 8PM, 10:30 PM
NONE of these times are written in stone unfortunately, but on a very VERY high average hold true - sometimes the NOON reversal happens at 11:30 AM if the banks feel its time to reverse, but invariably the trade will come in if you get stuck there --- simply takes a few hours then.
I had been forex trading this without entering a weekend trade, but last week I did as an experiment and it cleared nicely came Sunday night --- I wouldn’t run right out and do that if I were you, but its something to consider.
if you observe the forex market, you will notice reversals every 1.5 hours ( WHICH USUALLY DO NOT ALTER THE LONGER TREND, such as on the H1), as the longs get out and the shorts come in (or the forex brokers now short the run-up to make THEIR profit against your long, or to simply hit your stop-loss, take your shares, and then run the price up again -- that way they make twice as much while you sit there wondering what happened to your nice profit on the long forex trade !
IF THE REVERSALS COME IN EARLY, count one and a half hours to expect the next -- somewhere on down the line the banks will get back on schedule, but its good to be ready for them a little early -- rather than late!
Essentially, that’s it --- cause there really isn’t much to it except leaving the basket under your floppy drive to catch the money dropping!
TEST IT --- it works for me, even when I enter late and suffer a days drawdown, but DONT enter LATE and don’t suffer, which is kind of simple to remember and is the ONLY rule I can think of.
The whole thing with the trade is the range of GU --- even if you get stuck in a trend change, the "noise" of the forex market with up and down movements at that point, will invariably take out your 5 pips!
But 5 pips here, and 5 pips there and do it enough times in a day, and then a week, and it begins to look like real money after a while.
It’s forex mechanical and has no rules except DONT ENTER LATE and while some probably think there is not much to be made, try throwing 5 or 10 lots on each side, 5X a day, and tell me then!
BTW - YOU don’t do that for a long long time - greed is what kills graveyard dead!
Another reversal time
the next hedge will be at 9:15 pm, est for the 10:30 pm reversal -- after that will be the 12 midnite reversal, and you place the hedge at 11:15 pm, est.
try it a few hundred times and i think youll like it
mp
I LOVE the intelligence of this thread, even when they nail me --- like a welfare child, your post fell thru the cracks and i apologize.
and as far as i remember, the times DO NOT change with standard or daylight savings time.
mp
Summarized Times
EST GMT - 45 minutes - 1 hour
1030 1530 1445 1430
1200 1700 1615 1600
1330 1830 1745 1730
1700 2200 2115 2100
2000 0100 0015 2400
2230 0330 0245 0230
2400 0500 0415 0400
Background
This trade is NOT affected in any way by the DAILY trend, but rather the absolutely NECESSARY intraday reversal trend and the point that the market makers reverse a trade so THEY can make money and grab more shares !
There are a few purposes behind these reversals, but mostly by stopping and reversing price the mm's get MORE shares at a lesser price to continue a bullish runup AND/OR they make money against your long by now shorting, where most people will now sell and they buy more shares at a lower price to short on the way down as people bail their long positions. Of course, reverse this for a forex market thats moving down!
Now at the bottom, because of averaging down, they own MANY shares at a lower price and now they run the price back up, taking profit on the long side with their cheaper shares !
Lets say they run a currency up to 1.9000, at which point they reverse down to 1.8000 - almost everyone except long term holders will bail their positions (its SO human nature) to take forex profit, as they sell at a steadily decreasing price OR THEIR STOP LOSSES ARE HIT !
DO YOU SEE SOMETHING IN THAT LAST FOREX STATEMENT ???
Now the price is down to 1.8000, the mm's now cover by buying all these shares but at a 1000 pip advantage to where the currency was 15 mins ago, and UP THEY GO AGAIN, with lots more shares to sell the retail trade, but they got em CHEAP !!
Its often called a "headfake" because they fake you into thinking the price will now go down forever, scaring you into selling or forcing your stop losses --- Its HOW the rookies loose money and the mm's do it with glee !
PRO traders are the BEST forex day traders in the business and are well rewarded for being so - their job is to MAKE money for the company they work for and not care much about how they do it !
FOREX Trading, at least to this person, is KNOWING what theyre doing more than simply knowing when to enter and when to exit ! Theres a lot of pros out there, and they dont give a rats rump about any of us - rather they really dont like us at all, but will quickly grab our money !
of course, when forex trading with no sl, one better know the trend and NOT trade against it !
love and kisses
Wednesday, October 8, 2008
TRANSCRIPT OF AUDIO FILE #4496 OF PHILLIP - FOREX MARKET
Right, I am going to run through the forex market motion one more time. I see a lot of people still doing counter forex trades, counter-trend trades against the forex trend. Like the one we discuss on the daily Wrapup about that Swissy coming back to the 21EMA.
This forex chart and this MP3, you got to have it in your heart, not in your head, in your heart. If you look at the purple rectangle on the forex chart, the price break through the 89SMA blue line. Point 1, 2, 3 and 4 are just there to let you know that you can establish your forex market breathing or channel or whatever you want to call it so that you can know in what or between which boundaries does the forex market moves.
But the main thing is to remember when the price break through the 89 SMA, up or down, it doesn’t matter, as it will come back to the 21 EMA which it did and then it went up to the red number 3 on the trend line, then it came back to that red circle 21 EMA.
All those red circles are all high probabilities forex trades. They are all of the 21 EMA because we are in an up-trend; except for 4, 5 and 6. 4 is from the 89 SMA as well as the 365 EMA. It gave a nice morning star there. It was highly oversold on the MACD, below the 45 line, horizontal line and that was a high probability trade. So, the forex market moves away from the 89 SMA, pull back to the 21 EMA, then it move away, pull back to the 21 EMA, moves away, pull back to the 21 EMA.
The only time you do counter- trades, counter -trend trades is when your Risk/Reward Ratio (R/R Ratio) down to the 21 EMA and your stop loss is 1 to 1. But remember, sometime, it only come back to the 8 EMA. You need to keep that in mind as it is a high risk forex trade unless, if you see just right of number red 3 on top, you will see a lot of bars finding resistance there. If you do a trade somewhere around there, you will be probably very safe to come down to the 21 EMA. That’s how you do it.
The blue circle on top is a counter- trend trade. If you look at the 2nd blue one, you will see that the price come below the 21 EMA and the rule says that; at the end of a run, if it will push below the 21 EMA, it tend to pull back to it, sometime it goes a bit through it and then it come down to the 89 SMA. It’s exactly what happens there.
If you look at the bottom window on the MACD, the pink circles 1, 2 and 3, look at that noise there. You cannot trade the MACD like that, you gone be killed, there is no way you can do it. You have to stick with the motion of the market, around the 21 EMA, around your support and resistance lines, that’s the way to do your deals and it is very important to know that. You have to stick to that, there is no other way you are going to survive by taking every forex signals.
I still hear people on skype and talking about MACD being busy forming a round top and then there is still a 2 or 3 hours to go. You cannot do that, I mean, you can do it but it is not the way your focus should be. Your focus should be around the price movement, where it is in relation to the moving averages, where it is in relation to your forex trend lines, where is the movement in relation to your support and resistance lines. That is the way your focus should be. That is: when the MACD gives the forex signals, all that homework as been done already.
If I am sitting there in front of a 4 hours candle, if I got time to sit there for 4 straight hours, I am analyzing the forex market. I go to a monthly chart and draw my trend lines, then I go to the weekly’s one, do some in between minor trend lines or support and resistance lines. Then I go to the daily and then go to the 4 hours. Eventually, up and down according to the motion and the rules: what do I anticipate this price is going to do? Is the current movement within the rules? Is it within the system or not? If it is not, I just close it and I walk away. I don’t even think of forex trading. I do rather 4 or 5 good trades a month then do 10 of which only 4 was good and come breakeven at the end of the day. So, it is not about taking every forex signals.
Also, another thing that I want to emphasize is not to jump around between 10 currencies. Because you can get a wrong one at forex currency number one, then you jump to forex currency number 3 and get another wrong one and then you jump to currency number 8 and get another wrong one, where if you stick at currency number 1, the next forex signal would have been a good one and maybe the one after that as well. So, instead of having 3 wrong ones in 3 different currencies, you could have 1 wrong and 2 right in the same forex currency.
So be very careful no to jump around according to MACD forex signals. You’ve got to look at each pace, motion in relation to the moving averages and in relation to your support and resistance lines. Then, look at forex market emotions as I said in that summary.
Number red 5, you will see there is a morning star, if you look at 6, there is also a morning star. If you look at number 4 there is also a morning star. That is how you determine the emotions of the forex market, there is emotions involved in those candles. They tell me that those things have got high probabilities of moving in the right direction. That’s how I do it.
Get your focus on the rules, write it down, make yourself a little copy of this forex chart and write on it or next to it and try to see and look where the forex market is satisfying this type of motion. That is where your high probabilities forex trades are because, then, the Tsunami is over, it means the playing ground is over, this thing got direction now, there is a certain motion, there is a certain rhythm in it and you are going to flow in that rhythm. When you go counter-trend trade, you know that you go against the rhythm and you got to make it very sure that there is enough forex pips available to do that in a Risk/Reward Ratio, it could be 1 to1 or better, then you take it on.
You got to get this in your heart otherwise you are not going to make it.
3 Simple moving average Fractal forex system
This forex chart and this MP3, you got to have it in your heart, not in your head, in your heart. If you look at the purple rectangle on the forex chart, the price break through the 89SMA blue line. Point 1, 2, 3 and 4 are just there to let you know that you can establish your forex market breathing or channel or whatever you want to call it so that you can know in what or between which boundaries does the forex market moves.
But the main thing is to remember when the price break through the 89 SMA, up or down, it doesn’t matter, as it will come back to the 21 EMA which it did and then it went up to the red number 3 on the trend line, then it came back to that red circle 21 EMA.
All those red circles are all high probabilities forex trades. They are all of the 21 EMA because we are in an up-trend; except for 4, 5 and 6. 4 is from the 89 SMA as well as the 365 EMA. It gave a nice morning star there. It was highly oversold on the MACD, below the 45 line, horizontal line and that was a high probability trade. So, the forex market moves away from the 89 SMA, pull back to the 21 EMA, then it move away, pull back to the 21 EMA, moves away, pull back to the 21 EMA.
The only time you do counter- trades, counter -trend trades is when your Risk/Reward Ratio (R/R Ratio) down to the 21 EMA and your stop loss is 1 to 1. But remember, sometime, it only come back to the 8 EMA. You need to keep that in mind as it is a high risk forex trade unless, if you see just right of number red 3 on top, you will see a lot of bars finding resistance there. If you do a trade somewhere around there, you will be probably very safe to come down to the 21 EMA. That’s how you do it.
The blue circle on top is a counter- trend trade. If you look at the 2nd blue one, you will see that the price come below the 21 EMA and the rule says that; at the end of a run, if it will push below the 21 EMA, it tend to pull back to it, sometime it goes a bit through it and then it come down to the 89 SMA. It’s exactly what happens there.
If you look at the bottom window on the MACD, the pink circles 1, 2 and 3, look at that noise there. You cannot trade the MACD like that, you gone be killed, there is no way you can do it. You have to stick with the motion of the market, around the 21 EMA, around your support and resistance lines, that’s the way to do your deals and it is very important to know that. You have to stick to that, there is no other way you are going to survive by taking every forex signals.
I still hear people on skype and talking about MACD being busy forming a round top and then there is still a 2 or 3 hours to go. You cannot do that, I mean, you can do it but it is not the way your focus should be. Your focus should be around the price movement, where it is in relation to the moving averages, where it is in relation to your forex trend lines, where is the movement in relation to your support and resistance lines. That is the way your focus should be. That is: when the MACD gives the forex signals, all that homework as been done already.
If I am sitting there in front of a 4 hours candle, if I got time to sit there for 4 straight hours, I am analyzing the forex market. I go to a monthly chart and draw my trend lines, then I go to the weekly’s one, do some in between minor trend lines or support and resistance lines. Then I go to the daily and then go to the 4 hours. Eventually, up and down according to the motion and the rules: what do I anticipate this price is going to do? Is the current movement within the rules? Is it within the system or not? If it is not, I just close it and I walk away. I don’t even think of forex trading. I do rather 4 or 5 good trades a month then do 10 of which only 4 was good and come breakeven at the end of the day. So, it is not about taking every forex signals.
Also, another thing that I want to emphasize is not to jump around between 10 currencies. Because you can get a wrong one at forex currency number one, then you jump to forex currency number 3 and get another wrong one and then you jump to currency number 8 and get another wrong one, where if you stick at currency number 1, the next forex signal would have been a good one and maybe the one after that as well. So, instead of having 3 wrong ones in 3 different currencies, you could have 1 wrong and 2 right in the same forex currency.
So be very careful no to jump around according to MACD forex signals. You’ve got to look at each pace, motion in relation to the moving averages and in relation to your support and resistance lines. Then, look at forex market emotions as I said in that summary.
Number red 5, you will see there is a morning star, if you look at 6, there is also a morning star. If you look at number 4 there is also a morning star. That is how you determine the emotions of the forex market, there is emotions involved in those candles. They tell me that those things have got high probabilities of moving in the right direction. That’s how I do it.
Get your focus on the rules, write it down, make yourself a little copy of this forex chart and write on it or next to it and try to see and look where the forex market is satisfying this type of motion. That is where your high probabilities forex trades are because, then, the Tsunami is over, it means the playing ground is over, this thing got direction now, there is a certain motion, there is a certain rhythm in it and you are going to flow in that rhythm. When you go counter-trend trade, you know that you go against the rhythm and you got to make it very sure that there is enough forex pips available to do that in a Risk/Reward Ratio, it could be 1 to1 or better, then you take it on.
You got to get this in your heart otherwise you are not going to make it.
3 Simple moving average Fractal forex system
Tuesday, October 7, 2008
How I use Murrey Math
How I use Murrey Math
When I first started working with Murrey Math, I treated all the lines as simple pivots - support/resistance areas which could be used to confirm forex buy and sell signals. I realised that some levels are often repeated across different timeframes, which I thought simply made them stronger pivots. Then over time I got to understand a little more about how the Murrey works and here are a few tips from what I have learned so far. Firstly a bit about the individual lines themselves:
Firstly there's the obvious - when the market is over-extended in either direction (i.e at the overshoot or extreme overshoot lines) there's a good chance of a move back the other way, especially if there is confirmation from other forex trading indicators.
Then there's the one we've mentioned - the two Murrey forex trading strategies:
Buy at 1/8 close at 4/8 or Buy at 0/8 close at 2/8
Sell at 7/8 close at 4/8 or Sell at 8/8 close at 6/8
I haven't tested these too much but from what I can tell a little discretion is involved - the strike rate is not high enough to be purely mechanical about it. Candlestick patterns or confirming pivots might be a good "filter". See http://www.graemenash.co.uk/forex/MM.doc for more info on the forex trading strategies.
The "Forex Trading Range" lines might seem a bit confusing at first, given that the forex market spends most of its time outside the forex trading range, but there's more to it than that - these lines are actually very important in determining the state or sentiment of the forex market. Basically, when the forex market is between the lines, it is in an undecided state (i.e a forex trading range). If it is above the 5/8 line then the forex market can be considered bullish, likewise below 3/8 we are in a bearish forex market. Hence 5/8 is a great support level for re-entering a long trend and 3/8 for short.
A break of these lines can be very important. For example- If the market has been above 5/8 for a period of time but breaks below, that is a sign of bullishness fading. A drop to 4/8 almost always follows, and at that point 5/8 becomes significant resistance, because a break back above it would represent a re-establishing of the bullish scenario which had just previously failed.
If the forex market does indeed re-test 5/8 and fail, that confirms that the bullish sentiment has pretty much gone and an attempt at a move to 3/8 can be expected. If the forex market then breaks below 3/8, it has definitively turned bearish - and 3/8 then becomes strong resistance as a break back above would represent another change in sentiment, this time back to indecision.
Note that sometimes the re-test doesn’t occur and the market will break one forex trading range line and head straight for the other!
People often ask what timeframe to use Murrey on - but I use it on almost all of them. I have 1m/5m/30m/1h/4h charts on-screen with murrey lines. When you understand more about the forex market context murrey can give you, it's useful to have them all up as it can give good clues about where the forex market is likely to head.
A good example would be a forex trade I did a while ago which used nothing but murrey lines to get me in. Now I'm doing this from memory so it may not be totally accurate, but will still give a good idea of what I'm on about (I hope!) :)
Cable had bounced strongly off the 0/8 line on the 4h chart, a move targeting 2/8 (according to the forex trading strategy above), which was at 1.8250.
When it started approaching that level, I looked at the 1h chart, which had broken above it's 3/8 line, suggesting a move to 4/8 was coming. 4/8 was also 1.8250.
When it got to there, I dropped down to the 5min chart to "zoom in" on the action a bit more, and saw that cable had broken above 3/8, retested and bounced off, targeting at least 5/8, which was also 1.8250 - it then broke this and went to 6/8 at 1.8265
By this time the upward move was running out of steam - the 4h and 1h targets had been hit, and the 5min had made a sizeable up-move and overshot the target by one level, suggesting it may need to pause and retrace a little.
When the price hit that 6/8 at 1.8265 I dropped down to the 1min chart to try to pick the exact entry for the reversal, and I saw that the 7/8 (stall and reverse) line was at 1.8272. In the context of what the other timeframes were saying, it seemed highly likely that if the forex market hit this level it would bounce straight away.
The forex market went up to 1.8272 exactly then bounced off, giving me a +50 trade!
So that's how I use murrey math - to give context on what the market is doing and where it might go. I think it's important to have all the timeframes up as once you get used to it they give great info, and sometimes when they all say the same thing you don't need much else!
** As I write this I've just closed a cable short (from 1.7792 - 0945am UK time, closed 1.7777 at 0957), which was signalled well enough by divergences, price channels, moving averages etc.
But a great confirmation for me was the fact that when I entered the forex trade, the 5min forex chart had risen up to test the 3/8 line at 1.7792 - as I said earlier if market is below this it represents strong resistance because it means a change in sentiment. Simultaneously, the 1min chart was on +1/8 (extreme overshoot), which meant there was not much room above and a bounce off was likely.
For the exit there were again good divergence/boll/price channel/pivot forex signals and the confirmation for me was the 1min chart sitting just above the 5/8 line at 1.7769 - strong support because it would have meant a change from bullish to undecided sentiment. I took the exit there because in my view the forex market was short-term bullish, having risen 80 points in an hour, so that level was likely to hold as support.
** update again – I then reversed to long (at 1.7776 – 10am) with the target for the trade at 1.8222, which has just been hit, because:
The 1min bullish scenario was intact after that 5/8 line held
If price broke above the 5min 3/8 the target would be 4/8 at 1.8222
Right down at the bottom (1.7723) cable had bounced off 1/8 a move which targets… 4/8!
When I first started working with Murrey Math, I treated all the lines as simple pivots - support/resistance areas which could be used to confirm forex buy and sell signals. I realised that some levels are often repeated across different timeframes, which I thought simply made them stronger pivots. Then over time I got to understand a little more about how the Murrey works and here are a few tips from what I have learned so far. Firstly a bit about the individual lines themselves:
Firstly there's the obvious - when the market is over-extended in either direction (i.e at the overshoot or extreme overshoot lines) there's a good chance of a move back the other way, especially if there is confirmation from other forex trading indicators.
Then there's the one we've mentioned - the two Murrey forex trading strategies:
Buy at 1/8 close at 4/8 or Buy at 0/8 close at 2/8
Sell at 7/8 close at 4/8 or Sell at 8/8 close at 6/8
I haven't tested these too much but from what I can tell a little discretion is involved - the strike rate is not high enough to be purely mechanical about it. Candlestick patterns or confirming pivots might be a good "filter". See http://www.graemenash.co.uk/forex/MM.doc for more info on the forex trading strategies.
The "Forex Trading Range" lines might seem a bit confusing at first, given that the forex market spends most of its time outside the forex trading range, but there's more to it than that - these lines are actually very important in determining the state or sentiment of the forex market. Basically, when the forex market is between the lines, it is in an undecided state (i.e a forex trading range). If it is above the 5/8 line then the forex market can be considered bullish, likewise below 3/8 we are in a bearish forex market. Hence 5/8 is a great support level for re-entering a long trend and 3/8 for short.
A break of these lines can be very important. For example- If the market has been above 5/8 for a period of time but breaks below, that is a sign of bullishness fading. A drop to 4/8 almost always follows, and at that point 5/8 becomes significant resistance, because a break back above it would represent a re-establishing of the bullish scenario which had just previously failed.
If the forex market does indeed re-test 5/8 and fail, that confirms that the bullish sentiment has pretty much gone and an attempt at a move to 3/8 can be expected. If the forex market then breaks below 3/8, it has definitively turned bearish - and 3/8 then becomes strong resistance as a break back above would represent another change in sentiment, this time back to indecision.
Note that sometimes the re-test doesn’t occur and the market will break one forex trading range line and head straight for the other!
People often ask what timeframe to use Murrey on - but I use it on almost all of them. I have 1m/5m/30m/1h/4h charts on-screen with murrey lines. When you understand more about the forex market context murrey can give you, it's useful to have them all up as it can give good clues about where the forex market is likely to head.
A good example would be a forex trade I did a while ago which used nothing but murrey lines to get me in. Now I'm doing this from memory so it may not be totally accurate, but will still give a good idea of what I'm on about (I hope!) :)
Cable had bounced strongly off the 0/8 line on the 4h chart, a move targeting 2/8 (according to the forex trading strategy above), which was at 1.8250.
When it started approaching that level, I looked at the 1h chart, which had broken above it's 3/8 line, suggesting a move to 4/8 was coming. 4/8 was also 1.8250.
When it got to there, I dropped down to the 5min chart to "zoom in" on the action a bit more, and saw that cable had broken above 3/8, retested and bounced off, targeting at least 5/8, which was also 1.8250 - it then broke this and went to 6/8 at 1.8265
By this time the upward move was running out of steam - the 4h and 1h targets had been hit, and the 5min had made a sizeable up-move and overshot the target by one level, suggesting it may need to pause and retrace a little.
When the price hit that 6/8 at 1.8265 I dropped down to the 1min chart to try to pick the exact entry for the reversal, and I saw that the 7/8 (stall and reverse) line was at 1.8272. In the context of what the other timeframes were saying, it seemed highly likely that if the forex market hit this level it would bounce straight away.
The forex market went up to 1.8272 exactly then bounced off, giving me a +50 trade!
So that's how I use murrey math - to give context on what the market is doing and where it might go. I think it's important to have all the timeframes up as once you get used to it they give great info, and sometimes when they all say the same thing you don't need much else!
** As I write this I've just closed a cable short (from 1.7792 - 0945am UK time, closed 1.7777 at 0957), which was signalled well enough by divergences, price channels, moving averages etc.
But a great confirmation for me was the fact that when I entered the forex trade, the 5min forex chart had risen up to test the 3/8 line at 1.7792 - as I said earlier if market is below this it represents strong resistance because it means a change in sentiment. Simultaneously, the 1min chart was on +1/8 (extreme overshoot), which meant there was not much room above and a bounce off was likely.
For the exit there were again good divergence/boll/price channel/pivot forex signals and the confirmation for me was the 1min chart sitting just above the 5/8 line at 1.7769 - strong support because it would have meant a change from bullish to undecided sentiment. I took the exit there because in my view the forex market was short-term bullish, having risen 80 points in an hour, so that level was likely to hold as support.
** update again – I then reversed to long (at 1.7776 – 10am) with the target for the trade at 1.8222, which has just been hit, because:
The 1min bullish scenario was intact after that 5/8 line held
If price broke above the 5min 3/8 the target would be 4/8 at 1.8222
Right down at the bottom (1.7723) cable had bounced off 1/8 a move which targets… 4/8!
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Monday, August 11, 2008
Free forex buy and sell indicator. Forex trading System (Metatrader4)
Hi fellow traders,
I'm using the Forex Moneymaker system for the last 9 months and following it religiously for the last 4 months. It's a trend following system.
The Key components are 4 Indicators.
Heikin-Ashi : Visual Confirmation of A Trend or Consolidation. Confirms also when market is in a Range.
Stochastic & EMA34 : Indicates market momentum.
Aroon: Confirms Trend.
ATR : Indicates current market volume.
I am getting around 30 to 150 pips daily on eur/usd, usd/chf and gbp/usd. I get about 1, 2 or 3 signals in a 24 Hour period.
this is not the best out there, But worked for me so far. For the last 1 month market is rangebound. But with this system I'am still getting about 30~100 pips daily on each of the eur/usd, usd/cnf & gbp/usd.
If you Need More Forex System
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