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Advanced forex, oil and crude oil system Educational puposes

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This is a signal approval form from a highly advanced trading system, that I use for trading.It may  help some new trader to learn from.I created it many years ago.This is for educational purposes.

 

Nowadays I don't trade this system , I trade options   on dax and Dow, I trade these instruments because they are highly volatile , I don't trade forex or oil.  The main problem with systems , is they rely on market timing, this is where most systems fail.In order to make systems work, one has to look at fundamental price drivers before using these analysis, without any fundamental price drivers , the prices will become choppy, since there no fundamental price drivers.The system can make make money ,if followed with fundamental price drivers.90 % of the time the market is choppy, this is where traders lose money, but with fundamental price drivers , this % reduces to less than 20%.

 

K I S S  method is keep it very simple

 

https://community.ig.com/t5/General-Trading-Strategy/K-I-S-S-Keep-your-trading-so-simple-profitable/m-p/21225#M1333

 

Here are glimpses of live trades using this system.

 

https://community.ig.com/t5/Foreign-Exchange-FX/Weekly-option-trade-USDJPY/m-p/21847#M2852

 

https://community.ig.com/t5/Foreign-Exchange-FX/Euryen-EURJPY/m-p/20059#M2564

 

 

 

 

SIGNAL APPROVAL FORM  the system

 

  • This form applies to discretionary trades and non-system trades,  trend retracement systems.

 

  • ALL COMPULSORY FILTERS HAVE TO BE MET (see exceptions rules: 3.1, 3.15 and 4.1) WHEN PROCCESSING THIS SIGNAL, REMOVE ALL THOUGHTS, OPINIONS, BIASES FROM OUR MIND AND CLEANSE IT, LEAVE IT FREE TO PROCESS THE SYSTEM TRADES. Trades are not valid if any of the compulsory filters are not met.

 

  • Our main pairs are Eur/Usd and Gbp/Usd and Ftse/Dax; please give priority on watching them first, for new trade opportunities. Do not waste time on useless low probability setups, non-system trades and your own learned trading system.

 

  • In strong classic trend breakout patterns, where trends are already established, on 15/30 min time frames or trend lines are established on 15/30 minutes. This applies to macbos trendline system and trend retracement system, macbos and trend retracement are classic trending systems.

 

  • It is not necessary to look for higher probability, these classic patterns are already high probability, but there are also many false trend breakouts and illusions of trends, so verify these for false moves and weak trends.
  • It is also not necessary to use this sheet or look for strong momentum, second breaks and correlated instruments strength (if the trend breakout is related only to this instrument), so verify these for false moves and weak trends.

 

  • Where strong classic trends have broken out, we ignore resistances (if we are buying) and supports (if we are selling) as they get broken, except:
  • The trades can be selling at support areas or buying at resistance areas and not have at least 15 pips to next support/resistance.
  • The trades can be selling at bottom of channel areas or buying at the top of channel areas, and do not have at least 15 pips to next channel lines. Trends become invalid and low probability  , if longs are resistances and shorts are at supports  , or in ranging markets.
  • Look for trends, trend retracements, good clean set ups in range and predictive chart patterns

 

  • High probability check list applies to all systems Compulsory filter
  • .Use this check list before placing any trades on any system e  hp 10/20 , trend retracement , macbos  , classic trend breakout  and 2br/2bs.       After checking system for set up, if they are valid set ups  , then do high probability checks and low probability    checks  , if they are passed then suggest signal. If high probability filters are not passed, then do not suggest trades. If high probability filters are not passed, then do not suggest trades. These h p checks are integral part of the system and are compulsory. . Trades are not valid if approximately 80 % of the high probability filters are not met.

 

 

  • Keep out of ranging market Compulsory filter Draw ranging market boxes. Macbos or Trend retracement is not valid system trade  in a ranging market

 

TRADING RULES

  1. General rules

 

  • Forex Factory calendar – Compulsory filter

Look every morning before trading starts at daily schedule of news.

 

http://www.forexfactory.com/calendar.php

 

 

  • News – Compulsory filter for all systems
  • Don’t take any new trade 2 hours before MAJOR news (i.e. NFP, FED, ECB, BOE, BOJ, bank rates), and close all existing trades 15 min before. Enter 5 minutes after these, but let market settle and show clear set up.
  • Don’t take any new trade 30 min our before high impact news, but don’t close existing trades. You can open trades immediately within 5 minutes.
  • Do not trade until major Central bank conferences (ECB, BOE, BOJ and FED) are over.
  • Only high impact news to be considered, the ones that are marked with red on calendar.
  • Do not do any trades until the major central bank press conference is over, never put on trades during major central bank conferences.
  • Thin down (reduce) positions near the news time to avoid slippage.

 

  • Overnight range
  • Draw overnight range box first thing in the morning before beginning of trading.
  • from 10:30 pm GMT to 06:00 am GMT for Forex.
  • 10:00 pm to 08:00 am GMT for DAX.
  • 10:00 pm to 08:00 am GMT for
  • 00:01 am to 8:00 am GMT for

 

  • Trading opening time – Compulsory filter
  • New trades opening time: 08:30 to 13:00 GMT and 13:30 to 19:00 GMT
  • DAX opens at 07:15 and FTSE opens at 08:00 GMT. Do no not trade for first 30 minutes until FTSE opens and market settles.
  • S&P opens at 14:30 GMT. Do no not trade for the first 30 minutes, until markets settle.
  • Do not put on trades, you have no interest in managing with less than half an hour to go until the end of session.
  • Monday mornings: After 10 am U K time (Indices can be traded from 10:00 am to 13:00), but for indices and oil after 15:00 hours when U S session opens. No trading on indices from 13:00 to 15:00.

 

  • Trading closing time
  • Close everything on Friday at 18:00 GMT and delete all pending orders.
  • Close all open positions at 19:00 every day and delete all pending orders , unless orders are allowed to be kept open overnight.
  • If position is open overnight, leave stop of 30 and target of 30.
  • Close all open trades on indices and Oil at 18:30 every evening except Friday.

 

  • Defining a trend

Point is that every trader should choose 1 time frame (maximum 2), for their trend definition. This trend definition must always be 2-3, time frames higher than the one of entry. Example: entering on 15 or 30 min charts, use 4 hour for trend definition.

  • In a down trend the buy is 10 pips above the high of last two peaks.
  • In a uptrend the buy is 10 pips above the high of last peaks with full candle close.
  • In an uptrend sell is 10 pips below the low of last two troughs.
  • In an down trend sell is 10 pips below the low of last troughs , with full candle close.
  • Break of 2 sets of major supports or resistances (with a minimum 50 pip distance between the two ) constitutes a trend.
  • Sloping trend and channels must be evident on 4 hour charts  (not only on 15 min or 30 min)
  • Corrections to the trend /channel lines are not down trends in an up trend , and vice versa.

 

  • First and Second break – Compulsory filter
  • When there is more than half of 30 min candle (15 MIN FOR EXPERIENCED TRADERS) ,real body closed outside of overnight range box – First break
  • If price retraces after first break and then 30 min candle ( 15 MIN FOR EXPERIENCED TRADERS) full body closes above overnight range or box range – Second break
  • Our system trades the second break (we avoid the first break, although we can miss many good entries). We do not trade the first breakout of a ranging market, except when trends breakout on the same day. When two consolidation rectangles or triangles (including the first one i.e. overnight ranging) are broken, second break is not required. The second break is not required when two sets of major supports or resistances are broken, or a trend has broken out on the same day. There must be a clean break out with whole candles including wicks and body.
  • A FIRST BREAK IN TRENDS IS COMPULSORY , IF FIRST BREAK IN TREND IS USED , WHOLE BODE (OF AT LEAST 20 PIPS )MUST BE OUTSIDE OVERNIGHT RANGE

 

  • Order opening
  • As soon as set up is developing and at least 15 minutes before the close of bar, get tickets ready for entry of trades.
  • If you do not keep tickets ready, you will miss trades.
  • Write on Skype (in high probability signals ready for execution) 15 minutes in advance. Trade will be valid if price closes full bar above the high of previous candle close for longs or full bar below the low of the previous candle close.

 

  • Entry options

Once a trade set up has been identified as a high probability set up, look for the earliest entry on any of the 16 set up entry options and take the first one. Do not enter late!

 

  • Chasing
  • Price must not be more than 40 pips away from lwma 18 on 15 minutes, if set up is missed on system second is allowed, but do not chase further late set ups.
  • If set up to sell a particular instrument (currency or indices) is missed or closed at a profit, do not re-enter on correlated instrument late or after closing first.
  • When price is more than 40 pips away from lwma 18 on 15 min or top of up channel for longs or bottom of down channel for shorts  – this is chasing

 

  • Maximum number of trades – Compulsory filter
  • Maximum allowed is 2 trades per currency (euro as example) i.e. egbp, e yen and e usd longs, open only two out of three longs nett
  • You can have three longs on euro and one short = 2 nett longs
  • Maximum number of open directional trades is three
  • Against the U S dollar or any other currency, we can have either two shorts net or two longs nett.
  • We can have long euro usd and long gbp usd (nett 2 longs), or long euro usd and short usd yen, long gbp usd and short aud usd (this equals nett 2 longs).
  • When we have two potential trades, we do not need to put on only the strongest looking pair, we can put on the first signal available
  • We can put on two trades with two pairs.

 

  • System 50/50
  • Can be used when the signals don’t feel right. If the order is placed as high probability order, it must not be closed and it can be placed under system 50/50.

 

  • Never add to a losing position! Unless it is allowed by system rules.

 

 

 

 

 

 

 

 

  1. Trading instruments

The system set ups must valid on the instrument as high probability example :on ftse it has to be valid on ftse  (not s and p , dax , dow , nasdaq )

 

       

  • Trading EURO or USD – Compulsory filter
  • Have you checked dollar correlated pairs to trade USD or EURO or any other currencies?
  • If USD/JPY, USD/CHF and USD/CAD (all are USD pairs) are rising and EUR/USD and GBP/USD are falling  DOLLAR IS GETTING STRONGER.
  • If USD pairs are falling and EUR/USD and GBP/USD rising  DOLLAR IS GETTING WEAKER.
  • TO TRADE ALL PAIRS LOOK at USD and EURO against all currencies.
  • Do not open new EUR/USD position after 90 pips made in one day.

 

  • Trading Cable (Cable is GBP/USD) – Compulsory filter
  • Have you checked cable and correlated pairs?
  • Trade only when all currency pairs are being sold off or bought against US Dollar (i.e.: EUR/USD, USD/JPY, AUS/USD and USD/CAD).
  • To trade Cable long GBP/USD and EUR/USD both must be trending up; for shorts they must be trending down.
  • Trending definition: prices must be above mas for longs or below mas for shorts on 30 MIN (with slope, channel and trend line).
  • For Cable it being in synch with EUR/USD is very important. Other pairs like: USD/CAD and USD/JPY are not that important. Only look at EUR/USD correlation.
  • Rules 3.1, 3.15 and 4.1 will invalidate the compulsory filter (rule 3.12), if both Cable and EUR/USD get strong or weak simultaneously.
  • Do not open new position after 110 pips made in one day.
  • Always use EUR/USD supports and resistances (including trend lines , channels s/r) when trading Cable. Cable is linked to the direction of Euro; this is because UK economy and EU economy are closely connected. If putting on a cable trade, look at EUR/USD charts and bear in mind Cable is a noisy pair.

 

  • Trading EUR/GBP – Compulsory filter
  • Long positions – must have EUR/USD trending higher and GBP/USD must be trending lower.
  • Short positions – must have EUR/USD trending lower and GBP/USD must be trending higher.
  • EUR/GBP is a noisy pair with low volatility and trends. 20 pips move on EUR/GBP is noise because Cable is noisy.
  • Trade mainly systems hp10/20, macbos, trend retracement, classic trend breakout or double break rule.
  • Trending definition: prices must be above mas for longs or below mas for shorts on 30 MIN (with slope, channel and trend line).
  • Do not open new position after 60 pips made in one day.
  • Always use eur usd and Gbp usd  supports , resistances , trend lines and channels   to trade  eur gbp.
  • 80 % of the compulsory filters must be valid on both gbp usd and eur usd.

 

  • Trading EUR/JPY (the following two lines apply on to EUR/JPY) – Compulsory filter
  • Long positions – must have EUR/USD trending higher and USD/JPY must be trending higher.
  • Short positions – must have EUR/USD trending lower and USD/JPY must be trending lower.
  • ABOVE 2 LINES DOES NOT APPLY TO TRADING USD/JPY or EUR/USD.
  • Trending definition: prices must be above mas for longs or below mas for shorts on 30 MIN (with slope, channel and trend line).
  • Do not open new EUR/JPY position after 110 pips made in one day.
  • Do not open new USD/JPY position after 80 pips made in one day.
  • 80 % of the compulsory filters must be valid on both usd yen and eur usd.
  • Always use eur usd and usd yen  supports , resistances , trend lines and channels   to trade eur yen.

 

  • Trading AUD/USD and NZD/USD Compulsory filter
  • Trade with momentum and strong trends only. They are not suitable for mixed and weak trends.
  • They also do not have probability analysis advantages like EUR/JPY, DAX (FTSE) and GBP/USD / EUR/USD correlation.
  • Also spreads are wider on kiwi (NZD/USD), so kiwi is not suited to all dollar sell offs or buy ups, use lower spread pairs which are alternatives to USD.
  • Trending definition: prices must be above mas for longs or below mas for shorts on 30 MIN (with slope, channel and trend line).
  • Do not trade them for dollar strength or weakness due to wide spreads on kiwi.  Compulsory filter
  • Look at Dollar index, GBP/USD, EUR/USD and USD/JPY – if these are weak, do not buy; if others are strong do not sell.
  • Do not open new AUD/USD position after 80 pips made in one day.
  • Do not open new NZD/USD position after 80 pips made in one day.
  • Higher probability is gained when AUD/USD and NZD/USD are aligned and Euro currencies are flat or aligned.

 

  • Trading DAX and FTSE  Compulsory filter
  • They have to trend/move in the same direction in order to place an order. Look also at DOW and S&P; they have to move as well in the same direction. This does not mean set ups have to be valid on the other instruments; it means they just have to move in same direction. (S&P/Dow is more important than FTSE)
  • If FTSE and DAX are not moving together, then either FTSE or DAX orders are valid, only if S&P and DOW are moving together.
  • DAX opens at 07:15 and FTSE opens at 08:00 GMT. Do no not trade for first 30 minutes until FTSE opens and markets settle.
  • S&P opens at 14:30 GMT, so do not place new orders between approximately 12:30 and 15:00, until direction is clear.
  • If there is no news, do not open new trades on indices 1 hour before USA opens.
  • Trending definition: prices must be above lwma 18 for longs or below mas for shorts on 30 MIN (with slope, channel and trend line).
  • Rules 3.1, 3.15 and 4.1 will invalidate the compulsory filter (rule 3.12). It applies if DAX, FTSE, S&P and DOW are trending in the same direction.
  • Do not open new DAX position after 110 pips made in one day.
  • Do not open new FTSE position after 75 pips made in one day.
  • Always use s and p   supports , resistances , trend lines and channels   to trade  ftse /dax /djia
  • The system set ups must valid on the instrument as high probability example :on ftse it has to be valid on ftse (not s and p , dax , dow , nasdaq

 

 

  • Trading Oil  Compulsory filter
  • Trade only with momentum and strong trends only. Oil is not suitable for mixed and weak trends. Is trade valid?
  • Trade only in US session, after 13:30 GMT
  • Oil is a commodity that often rises when USD falls and vice versa. Look at USD index.
  • Also spreads are wider on Oil, so Oil is not suited to all Dollar sell offs or buy ups. Use lower spread pairs which are alternatives to USD.
  • Trending definition: prices must be above mas for longs or below mas for shorts on 30 MIN (with slope, channel and trend line).
  • Do not trade Oil Dollar strength or weakness due to wide spreads on Dollar.
  • Look at Dollar index and GBP/USD, EUR/USD and USD/JPY – if these are weak do not buy; if others are strong do not sell.
  • Do not open new Oil position after 150 pips made in one day.

 

  • Trading crosses
  • The correlator indicator and the charts will indicate strongest and weakest currencies; discretionary trades can be placed based on this information.
  • There are no compulsory filters involved here , but use discretion to look for higher probability.
  • Crosses involved in this rule are: EUR/NZD, EUR/AUD and EUR/CAD; GBP/JPY, GBP/CAD, GBP/AUD and GBP/NZD; AUD/JPY, and NZD/JPY.
  • Example 1: If you see the dollar weak against the JPY and AUD is also weak sell the AUD/JPY.
  • Example 2: If EUR/USD and USD/JPY are both rising, buy EUR/JPY.
  • Example 3: GBP/USD is rising and USD/JPY is rising (along with EUR/USD falling) buy GBP/JPY.
  • These are trades to be put under 60/45 – they can be quite volatile.

 

 

 

  1. Systems trading rules

 

  • Ranging market  Compulsory filter (Keep out of ranging markets)
  • Is market in a range? Is there a valid very high probability trade in this range?
  • Draw ranging market boxes and trend/channel lines on 30 min/1 hour/4 hour charts over last few days.
  • Draw ranging boxes and trend/channel lines on 4 hour charts over last sixty days.
  • 2 * daily range or  200 pips  , whichever is lower , adds to trend definition   (if the close is not  above major support for shorts   or below major resistance  for longs   )  on 4 hour charts
  • Trend breakout of a major 4 hour ranging market   , price has to clear  the lowest supports by 50 pips  or clear the highest resistance by 50 pips .
  • Trend must make a new high above   2  *  daily range or  200 pips  , whichever is lower  , and high  must be above highest  resistances  or low  below  major support zones . within  10 days
  • If support = resistance (within 10 pips on 4 hour charts within last 60 days ) , there are two touches at resistance and two touches at supports  ,draw a rectangular ranging box  on 30 min charts
  • Fundamental interest rates expectations announcements  can  invalidate  ranging market filters   , and make trades high probability in a ranging market .
  • Previous high in an uptrend is not a resistance. Unless it was a support and become a resistance. Previous low in a down trend

Is not support, unless it was a resistance which has now become support.

 

Brick wall zone .Where prices have touched a support area  of approximately  50 pips  and  bounced off it  , draw a brick wall zone  on your charts , in purple  on 30 min charts.

 

  • Draw overnight ranging boxes
  • If the prices are in a ranging market – do not trade, unless setup is very high probability.
  • Price must be above lwmas, up slope, up channel, up trendlines and stochastic up on one hour for longs (opposite for shorts).
  • Cable and EUR/USD are the most profitable pairs to trade. DAX is more profitable index to trade with FTSE aligned (S&P/DOW is more important than FTSE), when they both show strength in same direction (both strong and rising or both weak and falling.
  • In ranging markets it is not necessary to use all compulsory filters with very high probability price action setup.
  • If they are both either strong or weak with very high probability price action set up , compulsory filters 3.12, 3.13 and 3.10 can be eliminated from analysis.
  • If there are high probability predictive chart set ups in ranging markets, compulsory filters can be voided.
  • Long positions: In major EXTREME down trends, all compulsory filters are valid.
  • Short positions: In major EXTREME up trends, all compulsory filters are valid.
  • Macbos or Trend retracement is not valid system trade  in a ranging market

 

  • First and second breaks in ranging markets
  • Check if move is first or second break in ranging market. For additional description of first and second break see rule 1.7.
  • If first break – No trading!
  • We only trade second break, except in classic breakout patterns with high probability and correlated currency strength checks.
  • A FIRST BREAK IN TRENDS IS COMPULSORY , IF FIRST BREAK IN TREND IS USED , WHOLE BODE (OF AT LEAST 20 PIPS )MUST BE OUTSIDE OVERNIGHT RANGE

 

  • Inside range entries
  • These are only valid in trends with slope and when prices are above lwmas on 30 min.
  • They are valid in ranging markets, when there are predictive chart patterns or high probability setups.

 

  • Prices above/below lwmas on 30 minutes charts  Compulsory filter
  • Price has to be full/whole bar, including wick, above lwmas 18 and 30 on 30 min charts for longs.
  • Price has to be full/whole bar, including wick, below lwmas 18 and 30on 30 min charts for
  • Lwma 8 and 120 are not compulsory and have low importance.

 

  • Prices above/below lwmas on tick charts  Compulsory filter
  • Price has to be above lwmas on tick charts for long or below lwmas on tick charts for
  • An up channel on 5 minute or on 200 tick chart must be in place, in last 60 minutes before long (buy) entry.
  • A down channel must be in place on 5 minute or 200 tick charts, in last 60 minutes before short entry.
  • After a price move of 40 pips plus or a single move, a new tick chart channel must be formed, enter after formation.

 

  • 120 lwma on 30 min is a good trend indicator and dynamic support or resistance indicator
  • For long positions price should be above 120 lwma on 30 min chart.
  • For short positions price should be below 120 lwma on 30 min chart.

 

  • Distance of price from moving averages (chasing trades)
  • If price are more than 40 pips away from 18 lwma on 15 min. chart wait for price to retrace.
  • Look for an up channel or down channel on tick charts after retracement.
  • When price is more than 40 pips away from lwma 18 on 15 min or top of up channel for longs or bottom of down channel for shorts – this is chasing.
  • This rule does not apply to system 60/45 .5 or system 1 v2.

 

  • Resistances Compulsory filter
  • For long positions price has to sit (close) above resistance with full 30 min candle or at least with more than half of 30 min. candle real body closed above resistance.
  • Have you seen resistance become support on several points?
  • Don’t open long position if major resistance level price is less than 20 pips away from current price.
  • Is there newly formed resistance or down channel/slope on tick charts? Close long open position if formed!
  • Do not buy against newly formed resistance. Close open position if formed!
  • Do not buy below resistances ,tops of channels or below moving averages

 

  • Supports Compulsory filter
  • For short positions price has to sit (close) below support with full 30 min candle or at least with more than half of 30 min. candle real body closed below support.
  • Have you seen support become resistance on several points?
  • Don’t open short position if major support level price is less than 20 pips away from current price.
  • Is there newly formed support or up channel/slope on tick charts? Close open short position if formed!
  • Do not sell against newly formed support. Close open position if formed!

Do not sell above support, bottoms of channels  or above moving averages

 

  • Up and down trend lines/slope in last 24 hours on 1 hour chart  Compulsory filter
  • An uptrend lines in last 24 hours on 1 hour charts has to be in place for
  • An up slope in last 24 hours on 1 hour charts has to be in place for
  • A down trend lines in last 24 hours on 1 hour charts has to be in place for
  • A down slope in last 24 hours on 1 hour charts has to be in place for
  • We are not looking at 3 to 5 bars or a few bars, but looking at overall trend direction and continuation.
  • This filter applies to high probability price action or trend retracement intraday.
  • Rules 3.1, 3.15 and 4.1 will invalidate this compulsory filter, if both Cable and EUR/USD or DAX/FTSE (S&P/DOW is more important than FTSE) gets weak simultaneously.
  • Monitor both gbp usd and euro usd level and prices for invalidity of filter. This applies only to Cable and EUR/USD or DAX/FTSE (S&P/DOW is more important than FTSE)

 

  • Slope and channel lines on tick (200 tick charts )or 5 minutes charts  Compulsory filter
  • There has to be an up slope or channel lines on tick charts or 5 min charts for
  • There has to be a down slope or channel lines on tick charts or 5 min charts for
  • A channel must be in place on 5 minute charts or 200 tick charts in last 60 minutes. Up channels are required for longs. Down channels are required for shorts.

 

  • Up and down channels  Compulsory filter
  • Is there an up channel for longs or down channel for shorts on 48 hour, plus time frame on hourly charts?
  • This filter applies to high probability price action or macbos.
  • Rules 3.1, 3.15 and 4.1 will invalidate this compulsory filter, if both Cable and EUR/USD gets strong simultaneously.
  • Rules 3.1, 3.15 and 4.1 will invalidate this compulsory filter; same applies if DAX, FTSE, S&P and DOW are trending in same direction.
  • Monitor both GBP/USD and EUR/USD or DAX/FTSE (S&P /DOW) levels and prices for invalidity of filter. Applies only to Cable and EUR/USD.

 

  • Stochastic on 30 minutes charts  Compulsory filter
  • Stochastics has to be turned on up towards 60 (ideally above) on 30 min chart for longs.
  • Stochastics has to be turned on down towards 40 (ideally below) on 30 min chart for shorts.
  • Stochastic setup on 30 min chart is: 28, 6 ,10.
  • We use stochastics as filter to keep out of ranging markets (not for overbought or trend indicator).
  • Rules 3.1, 3.15 and 4.1 will invalidate this compulsory filter, if Cable andEUR/USD or DAX/FTSE (S&P/DOW is more important than FTSE) gets strong or weak simultaneously.
  • Monitor both GBP/USD and EUR/USD levels and prices for invalidity of filter. This applies only to Cable and EUR/USD or DAX/FTSE (S&P/DOW is more important than FTSE).

 

  • Daily price range  Compulsory filter
  • Always check if price exceeded the daily range.
  • 120 pips is the maximum for most instruments, but this limit can be exceeded in extreme circumstances backed by fundamentals.
  • For detailed instructions about daily ranges for each instrument look under point Trading instruments.
  • Do not trade when price exceed the daily range, except in extreme fundamental driver trends.
  • Daily range is calculated from lowest to highest price, certain instrument has made in trading day.
  • In calculating daily ranges spike ranges on false moves can be deducted.

 

  • Multi system entries for trending systems 20 supply line, system 31 macbos and system 35
  • Eur/Usd and Gbp/Usd or DAX/FTSE (S&P/Dow is more important than FTSE), it applies to these pairs, if they are both strong or weak,
  • And markets are trending or very high probability price action set ups exist, compulsory filters 3.10, 3.12, 3.13, 3.14 and 3.2 can be eliminated from analysis.
  • It is also not necessary to look at resistances, if price sitting above support of mas and trend lines
  • It is also not necessary to look at support, if price sitting below support of mas and trend lines
  • When we enter a long trade we ignore resistances, as long as we are sitting on support of mas, trend lines and support
  • When we enter a short trade we ignore support, as long as we are sitting below resistance of mas, trend lines and support
  • Look at support and resistance on macro view.
  • All support and resistance gets broken against the trend direction.
  • Long positions: In major extreme down trends on daily charts, all compulsory filters are valid.
  • Short positions: In major extreme up trends on daily charts, all compulsory filters are valid.
  • We ignore targets and LONGER PERIOD ABOVE 48 HOURS CHANNEL FILTERS for trending systems and multi systems.

 

  • When markets are trending and making higher highs or lower lows in strong trends on various time frames, entries are more important. We do not know the potential targets.
  • We ignore targets for trending systems and multi systems. We ignore supports for short trades and resistances for long trades.
  • In ranging and weak trends, make sure the trades are not selling at support areas or buying at resistance areas. There has to be at least 15 pips to next support/resistance.
  • In ranging and weak trends, make sure the trades are not selling at bottom of channel areas or buying at the top of channel areas. There has to be at least 15 pips to next channel lines.

 

  • Trade setup failure
  • At what point will the trade set up fail?
  • A set up becomes invalid, if for more than 120 minutes it remains within 10 pips.
  • If price has gone above resistance with full bar, but closes below resistance, the setup has failed. Opposite for supports.
  • Set up breaks down and closes more than 20 pips against entry (30 pips for DAX, EUR/JPY, Cable and Oil).

 

3.18 interest rates expectations

  • Fundamental interest rates expectations announcements  can  invalidate  ranging market filters   , and make trades high probability in a ranging market .
  • Future interest rate expectations take precedence over the headline rate
  • If a country has a high interest rate, but no further increases are expected, the currency can still fall.
  • If a country has a low interest rate but is expected to raise interest rates over time, its currency can still rise

While it is easy for Forex traders to understand the logic of why investors move money from lower yielding currencies and assets to higher yielding assets and currencies. They may also believe that the simple mechanism of supply and demand is responsible for currency movement. However, this is only part of the story. The expectation of future interest rate increases or rate cuts is even more important than just the actual rates themselves.

 

 

 

  1. Pre-entry analysis procedure

 

Before putting any new order it is necessary to check many things in order to make quality analysis and find high probability entry points. Following procedure, in combination with above rules, will also help one to avoid picking wrong trades.

 

  • Cable and EUR/USD are the most profitable pairs to trade. DAX and FTSE (S&P/DOW is more important than FTSE) are the indices we trade. When they both show strength in same direction (both strong and rising or both weak and falling) it is not necessary to use all filters. This also applies in ranging markets.
  • If they are either strong or weak, with high probability price action or strong trends, compulsory filters 3.12, 3.13 and 3.10 can be eliminated from analysis.
  • If they are both strong at same time or weak at the same time, with high probability price action or strong trends, compulsory filters are invalid and overridden.
  • Long positions: In major extreme down trends on daily charts all compulsory filters are valid.
  • Short positions: In major extreme up trends on daily charts all compulsory filters are valid.

 

  • Range boxes
  • First thing in the morning, before trading, draw overnight range boxes. See rule 1.3 for more details.
  • It is also necessary to draw bigger multi day range boxes, if price is not trending.
  • This will help one to avoid ranging markets and bad entries.

 

  • Supports and resistances
  • Draw supports and resistances, both horizontal and diagonal (trend lines).
  • Major supports and resistances has to be drawn and bolded.

 

  • Channels
  • Draw channels if price is in trending mode.
  • Avoid putting long orders near the top of channel and short near bottom of channel.

 

  • Daily range
  • Check if price exceeded daily range.

 

  • Check the dollar index

 

  • Check the correlated indicator or look at context on correlated pairs to see strongest and weakest currency

 

  • Is this a single move up?
  • We do not trade single moves on hourly bars/charts.
  • Wait for a few bars on 30 min or a retracement and an up channel for longs or down channel for shorts, to form on 5 minute charts or 200 tick charts.

 

  • Is price sitting above diagonal support for longs or below diagonal resistance for shorts?

 

  • Have you missed any trend lines?
  • Have you missed any major support resistance lines?
  • Have you missed any range boxes?
  • Have you missed any channels?
  • Have you missed daily range levels?
  • Have you missed any other information from the charts?

 

  • Is the setup a fresh momentum trade or formed overnight?
  • Look on charts for a new fresh trend build up and check out first second breaks.

 

  • Is it a clear clean entry?
  • A clean clear entry is a non-choppy entry; it can be in a ranging market.
  • Clean clear entry is where there are more bars in same direction, rather than one or two bars up or one or two bars down i.e. 50/50 undecided .look at 1 hr , 4 hr and daily candles   and count pips down  and pips up .
  • If one 4 hour bar is up  and another is down   , OR PRICE MOVES 80 PIPS DOWN AND 80 PIPS UP  , NET TREND OR MOVEMENT IS ZERO.
  • USE A FILTER OF 10 TO 20 PIPS TO FILTER OUT NOISE
  • It can be below resistance for longs and vice versa for shorts
  • In clean entries, wick and body of candlesticks must be fully above lwma 18 for long and below lwma 18 for shorts on 30 minutes

 

  • Is there a trend retracement entry, macbos, hp10 20 or classic trend breakout?
  • If set up is developing keep an eye in advance

 

  • What system should be used hp10/20, macbos, trend retracement, classic breakout or 60/45?
  • Use the first system to give the earliest high probability entry. Do not delay entry. Enter at close of bar on 15 min or 30 min.
  • Do not hesitate if there is a clear clean setup. Give clear instructions and not ask questions in real time, for instructions which are already given.

 

  • Does analysis meet approximately 80 % rules for entry?
  • The 80 % uses Rules 3.1, 3.15 and 4.1 and all compulsory filters, and is applicable to all trades.
  • If yes, enter the trade at close of current 15 minute bar or 30 minute bar, according to system set up. Do not delay.

 

  • Is the trade valid and should it be put on?
  • If yes enter in high probability ready signals on Skype chat , 15 minutes or 30 minutes before
  • If you do not have a ready professional signal, don’t post anything on Skype because we get influenced with YOUR amateurish thoughts and trades

 

  • Enter trade on Skype with following CLEAR AND CONCISE instructions
  • We have a signal developing on lower times on eur usd, but wait until support becomes resistance, for a short entry.
  • At close of 15 minute bar, we have trend retracement set up forming, provided price closes above 1.3300.

 

  • 5 minutes before close of bar on 15 min or 30 minute, give clear concise signal Skype high probability ready signals chat 
  • At close of 5 minute bar, we have trend retracement setup forming, provided price closes above 1. 3300.
  • Get two tickets ready as per system rules, one with target of x and second with target of y.
  • Do not look for further confirmation on high probability price action setups.
  • You do not have to be right and do not delay entry; miss entry or mess up in trying to be right about correct entry.

 

 

 

 

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how to give a trade signal

 

How to use this system?

 

1)Look for  fundamental drivers  like interest rates expectations

 

2)Look at  correlated indices analysis because all indices are related,  if calling on ftse look at others like S and P, Nasdaq Dow and Dax 

 

3)Look at correlated pairs  like strength on eur /usd. usd jpy and also compare instrument strength like eurusd/eurgbp/eurjpy/eur cad  for eur strength, for usdjpy  see dollar USDJPY, cad CADJPY  , euro EURJPY and cable  GBPJPY. See link below to see how I trade Eurjpy

 

3)Do technical analysis simple K I S S  trend lines ,channels , supports/resistances.A simp

 

K I S S Keep your trading so simple 

 

https://community.ig.com/t5/General-Trading-Strategy/K-I-S-S-Keep-your-trading-so-simple-profitable/m-p/21225#M1333

 

4) Read price action confirmation like here

 

https://community.ig.com/t5/General-Trading-Strategy/How-do-professional-read-price-action/m-p/20085#M1197

 

https://community.ig.com/t5/Foreign-Exchange-FX/Weekly-trade-USD-JPY-long/m-p/21939#M2871

 

https://community.ig.com/t5/Foreign-Exchange-FX/USD-CAD-long-term-supports/m-p/21941#M2872

 

 

5)Give trade able option ideas like I have done  in some of the links below.

 

https://community.ig.com/t5/Foreign-Exchange-FX/Weekly-option-trade-USDJPY/m-p/21372#M2775

 

6)Suggest a stop loss and exit strategy

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Results of back tests of some of my systems

 

 In regards to the  analysis, no representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. IG  or original poster accepts no responsibility for any use that may be made of these comments and for any consequences that result.

 

DISCLAIMER: Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this.

 

performance forex.jpgperformance forex1.jpg

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Trades on Dow using  this system

 

s and p aligned.jpga

 

 

  • Trading dow  
  • They have to trend/move in the same direction in order to place an order. Look also at nasdaq and S&P; they have to move as well in the same direction. This does not mean set ups have to be valid on the other instruments; it means they just have to move in same direction. 
  • If nasdaq and s and p are not moving together, then either nasdaq or dow orders are valid, only if S&P and DOW are moving together.
  • DAX opens at 07:15 and FTSE opens at 08:00 GMT. Do no not trade for first 30 minutes until FTSE opens and markets settle.
  • S&P opens at 14:30 GMT, so do not place new orders between approximately 12:30 and 15:00, until direction is clear.
  • If there is no news, do not open new trades on indices 1 hour before USA opens.
  • Trending definition: prices must be above lwma 18 for longs or below mas for shorts on 30 MIN (with slope, channel and trend line).
  • Rules  will invalidate the compulsory filter . It applies if DAX, FTSE, S&P and DOW are trending in the same direction.
  • Do not open new Dow position after 300 made in one day.
  • Do not open new FTSE position after 75 pips made in one day.
  • Always use s and p   supports , resistances , trend lines and channels   to trade  djia
  • The system set ups must valid on the instrument as high probability example Smiley Surprisedn dow it has to be valid on dow (not s and p , dax ,  nasdaq

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