Relaxed Profitable trading using daily timeframes
I apologise for not having posted anything recently, this is because I have been learning to trade a much more profitable method, taking far less of my time and producing much better profits.
I now trade using the daily and weekly charts for major price movements. This is such a relaxed way to trade, you already have all the old major levels of support and resistance drawn on your charts, a few hours work a week amending daily charts and the same at the weekend studying the weekly charts is all the work you need to do.
The added bonus for me is that I don’t get anxious about missing trades like I used to on the lower timeframes. In addition I am often taking cheeky trades using the lower timeframes and using the directional bias / knowledge gleaned from daily tf analysis, win win.
Here is a very basic example of how a chart may look, I didn’t take this eur/cad long trade but my notes were made and left on my chart on the 18th of october. This note for example “18th 1.5449 long to 1.6000″ means the price was at 1.5449 at the close of that weekly bar and I assessed it would go to next resistance / significant number 1.6000 at least.
The long tailed weekly candle resembles a hammer with the long tail signaling that sellers moved in but buyers entered the market to push the close of the bar back up to old support of 15360. At this point I would move to the daily chart to look for candlestick price action to indicate a long trade.
To confirm a possible long trade I needed a close above the high of the red candle marked with the red x, this makes that a confirmed low at support and validates the ascending trendline. Notice also that the huge green candle of the 15th is a buob and bueb, bullish outside bar and bullish engulfing bar. This indicated that buyers had moved in in strength at old confirmed support. As often happens with these larger daily candles you get a 50% ish retrace, patience and discipline would get you in with a safe and profitable trade at 1.5360 stop below 1.5200 target 700 pips away at old major res 1.6100.
Notice also that after that buob/bueb of the 15th we had two indescision bars, the green doji 16th and the red inside bar of the 17th a close below would have invalidated the long, a close above would be a signal that buyers had won the battle and the price would continue up.
The hourly chart below clearly shows how 1.5360 was a significant level of old support August 24th , became new resistance and then support again.
There is no easy way to learn to trade forex, no substitute for 1000′s of hours of studying price action at old levels of support and resistance. The only holy grail of trading is your eyes and Price Action at Support and Resistance. Learn it and prosper. Good Luck.
One last note, have a look at how clearly resistance became support at 1.5360 on the four hour timeframe. Notice also how the salmon 20 ema crossing up through the pale blue 50 sma helped confirm the safe long entry. This happens alot, they are a very important moving average crossover to observe. See the earlier crossovers at point 1 and 2, remember these red supp/res levels are on the charts well before the price gets there, all you need to do is watch and learn how to interpret the price action at these levels to trade them profitably.
Hindsight is a brilliant thing I know but with practice and study confidence grows. It may take you a year or five years to crack it. Winners never quit. The charts don’t lie, these patterns have been occuring and working like clockwork for hundreds of years. That’s more than enough data to give me the confidence to realise I was on the right track.
I am not trying to teach you how to trade the daily timeframe rather I am trying to alert you to what I believe to be the best and least stressful way to trade.
You can learn how to trade classic support and resistance with price action at support and resistance FOR FREE by searching for all the forex forums online.
I personally learned how to trade across all time frames with the help of the fantastic team at the www.fx500club.com They have a live forex chat room and share their charts so that you can watch them find potential trades in real time.
They also have a school for learning how to trade longer term charts at www.fxmonkeyschool.com.
The fx500club and fxmonkeyschool, forex trading school don’t just trade charts and indicators alone, they teach us to use correlation of the whole market before entering a trade. It truly is the best place to learn how to trade forex properly, safely and profitably. It’s all about the pips and about protecting your capital.
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Always Remember.
Keep your risk as a percentage of your capital low (1%), equals stress free trading.
Always work out potential losses before potential profits.
We are paid to take risks, if you aren’t in a trade you cannot win a trade!!
Buy off support and sell off resistance.
Bank partial profits early and move your stop loss to break even as soon as you can.
Click Here to get a FREE days entry into the fx500 club live trading room