This trading strategy is ideal for traders who work full time but want to build a lucrative career as traders in the Forex or other markets, without having to sacrifice time from their work or other activities.
It is a system that uses several well-known and widely used technical indicators, the RSI, the moving averages and the ATR, to generate market entry and exit signals. These indicators are found in all graphical analysis packages on the market.
In a previous article we explained some basic day trading strategies for Forex and other markets, mainly based on price action.
Continuing with the series on daytrading strategies based exclusively on Price Action (the most common price patterns), we are now going to present another series of strategies based on classic price patterns of technical analysis.
You can access the first article in the series at the following link: The Best Forex Daytrading Strategies I
In this article, we present a complete collection of ideas to build daytrading strategies based exclusively on price action that can be useful to trade in Forex, although they can also be adapted to other markets. By the way, I have been told that these strategies were used on a trading desk of a well-known US investment bank. Although logically I have not been able to corroborate this, the truth is that these trading ideas are at the least original since they combine different patterns in an unusual way. Having said that, we will now study these strategies in detail.
For years, the interest of numerous market scholars has focused on W.D. Gann, the architect of very successful market predictions. Eager for knowledge, a plethora of speculators have tried to find out how Gann was able to obtain such a level of precision, making such wise market predictions. For example, in number two of the fifth volume of the magazine Ticker and Investment Digest (December 1909), it is mentioned that Gann carried out 286 trades in the presence of William E. Gilley, of which 264 were successful. Therefore, his win ratio reached a spectacular 92%. In that 25-day period covered by the article, Gann was able to double his starting capital ten times.
Among Gann’s many speculative techniques, perhaps the most famous is the one known as the Square of Nine, one of his most mysterious calculations and trading systems.
Description of Hull moving average (HMA), a little-known type of moving average that almost eliminates lag in relation to price action compared to traditional moving averages.
A moving average over the price of a financial asset, such as a stock or currency pair, is a high-value trend indicator. It is possibly the most famous and widely used trading indicator of all.
Typically, the three most commonly used classic moving averages are as follows: simple, exponential, and weighted.
But today we are going to explain a little-known moving average, which is considered by many to be one of the best that exists.
It is the Hull moving average.
In this article, we are going to explain a simple trading system with Heikin Ashi charts to eliminate “market noise” so that we have a clearer picture of price action and especially trends. In this case, the methodology makes use of several modified indicators for Metatrader 4 based on Heikin Ashi candlesticks, which we include below for free download. Therefore, this system can only be used on this trading platform. One of its advantages is that it includes an alert indicator that shows us precisely when we must enter the market.
Basically, it is a trend-following system that seeks to enter the market during price corrections, in such a way that it gives us the possibility to open new positions at better prices. Its rules are quite clear and include rules for placing the stop loss and take profit target (based on another custom indicator).
As always, it is recommended to test this system in a demo account before using it to trade with real money.
The Non-farm payrolls (NFP) indicator is the report on total salaried workers in the United States except agricultural jobs, government workers, nonprofit workers, and private domestic workers. Today it is a key economic indicator for the United States.
The publication of the NFP report causes very wide movements in the Forex market, which are among the largest movements produced by the publication of economic news. This is why many analysts, investors, speculators, and investment funds try to anticipate the result of the NFP and the movement it will cause. Due to this great expectation before the publication of this economic indicator, the market can react with wide movements even when there is no deviation between the forecast and the final result of the NFP.
In this article, we are going to discuss some trading aspects related to this economic indicator, especially to avoid the exposure to excessive risks due to the high volatility that the release of the NFP can cause.
The trading system for MT4 that we are going to present below aims to enter market trends shortly after they begin. Therefore, it is not a counter-trend system, but rather a trend-following system that uses a series of technical indicators to detect changes in market direction as soon as possible.
It is a system based on a series of well-known technical indicators such as the JCCI and moving averages, although there are also modified indicators that were designed for Metatrader 4. Therefore, this methodology can only be applied to this trading platform.
Together, all these tools are designed to analyze the market trend and determine when a change is likely to occur. However, given that the trend changes are not easy to predict and before one occurs there may be false signals, especially in range markets, it is recommended that the trader always apply risk control and monetary management measures that decrease the impact of losing trades.
As always, it is recommended to test this system in a demo account before using it to trade with real money.
The trading system that we are going to present below is a market reversal strategy that uses several modified technical indicators developed for the Metatrader 4 platform. Due to this, this system can only be used on this trading platform. This methodology can be used to trade in most markets, including Forex.
This strategy aims to identify the areas in which the price is likely to change its trend. The modified indicators are based on the well-known Parabolic SAR and Zigzag and a modified moving average is known as the VAR Moving Average, which is used to indicate whether the trend of an asset is reversing. As a filter, we use the RSI indicator.
Because it is a trading system based solely on technical indicators, it has mechanical entry and exit rules and it is quite simple to apply. Therefore, it does not require much interpretation.
As always, it is recommended to test this reversal trading system with a demo account before using it to trade with real money.
The sequential methodology of Tom DeMark or TD Sequential is a well-known indicator among traders that operate based on the techniques of this author, which has become known in recent years. In fact, this indicator is a mixture of a bit of everything, so it will be liked by both systematic traders and lovers of technical analysis, including those who like wave counts.
To calculate the TD Sequential, three phases are required: