Traders secret library F9D1
By // Samuel Adegoke
– Forex, GBP/JPY, and EUR/GBP
Charts – Daily, 4 hours, 1 hour, 15 minute
Charting Software – Any
Indicators – 5 EMA, 10 EMA, 14 EMA, 21 EMA, 50 EMA
Pre-Trading System Actions :
The concept of this trading system is based on Exponential Moving Averages (EMA), Chart Analysis/ Reading and Patience. My trading system could work perfectly well on all the currency pairs, but I focused mainly on GBP/JPY and EUR/GBP. When planning my trade in the Pre-Trading System Actions, I put them on paper. I also consider the following steps:
- I determine my lot size – it all depends on what my equity is at that time.
- Write out my take profit on paper, this is something around 50 to 70 pips.
- One currency pair at a time i.e. either GBP/JPY or EUR/GBP.
- I start by looking at the 15mins, 1hr, 4hrs and Daily timeframes for these pairs.
These are the recommended time frames I use in my trading system. On my trading terminal, I concentrate only on the above-specified currency pairs, it becomes mandatory to open all the time frames on the specified currency pairs and that’s where my success lies.
Take a look at the following charts below on the different time frames. This is how I open them and I insert my exponential moving averages, before going to place any trade order.
How to identify the Entry Point :
Whenever the 5, 10 and 14 EMA’s cross the 21 EMA upward it is a good signal to go long on the 1-hour time frame. I usually aim for between 40 and 60 pips. The same rule applies to short orders.
How to identify the Exit Point :
If after 4 hours, and all I could gather is just 20 to 30 pips, what I do next is to place my cursor on the last two candlesticks, i.e. candlesticks that were formed 2 hours behind the candle that is currently open.
I check the open value of these candlesticks and the open value of the present candlestick and if the difference is 5 to 10 pips, I know that it is time to exit the trade and wait for another opportunity.