Thursday, April 16, 2015

A Good Way to Trade My Signals

Some of those who’ve been following my signals might wonder how they can best trade those signals. It might be recommended that certain pairs, like EUR pairs or NZD pairs, be bought or sold on a particular day. Normally, you’re not expected to follow the signals blindly. You need to use your technical analysis to know when to enter, since you may want to trade a pair only after your entry criteria have been met.

I’d like to remind you of the principle behind the strategy I use to send the signals (although this has been explained in one of the past articles in the year 2014). I look for the strongest or the weakest currency among the majors, selling the weakest major against other majors; and buying the strongest major against other majors.  

Let us check what happened to EUR pairs within April 6 – 10, 2015. We can see that EUR was weak and therefore, most EUR pairs were weak. Some money could’ve been made if EUR was sold against most other popular currencies. Within April 6 – 10, 2015 as well, we can also see that AUD was strong. Some gains could’ve been harnessed by buying AUD against most other majors and selling other majors against it.

It also means that we take advantage of some correlated pairs like AUDJPY and NZDJPY (or EURUSD and GBPUSD), because correlated pairs sometimes move almost in unison. That doesn’t mean that correlated instruments move in the same direction always. The first one may trend in a direction before the other one does so. EURUSD may first trend upwards before GBPUSD does so. At times, the former may move south, while the latter remains trendless or move north.

You can check some of my past signals to see how they were sent. Now, when you’re advised to buy or sell a pair, you’d do well when you buy or sell it after the direction is confirmed by your trading methodology.  For example, a combination of the Average Directional Movement Index (ADX) and the Moving Average Convergence Divergence (MACD) in an hourly chart or a 4-hour chart would enable a trader to confirm a bullish or a bearish bias in the near-term. When the ADX 14 and the MACD give a bullish signal simultaneously in one of the recommended time horizons, the winning probability is increased if it’s used to trade my signals. Please check online resources to understand how these helpful indicators work.

Another trader may prefer to use a moving average crossover system, say, Exponential Moving Averages 11 and 56 (EMAs 11 and 56), with the Relative Strength Index (RSI) period 14 level 50. When the EMA 11 crosses the EMA 56 to the downside and the RSI period 14 crosses the level 50 to the downside, that’s a “sell” signal. Reverse the logic for a “buy” signal. The EMAs 11 and 56 and the RSI period 14 level 50 are powerful, especially when they give the same signal simultaneously in an hourly chart and 4-hour chart.

When I say, “Buy USDCAD or sell NZDCHF,” the signal would be taken logically as soon as the forecasted direction matches your trading system. Otherwise, the signal might be ignored after 2 days or so. This doesn’t mean that you can’t win if you simply click “buy” or “sell” but it means your odds of winning are enhanced when you trade the signals using other entry conditions.

A speculator who believes in supply and demand levels (resistance and support levels) might want to buy USDCAD only after it’s bounced off an important demand level and started to rally. A fan of Fibonacci extensions and retracements might also want to sell NZDCHF only after the signal meets some Fibonacci conditions. What is your own favorite trading system? Whether you use Elliot Wave or Parabolic SAR, whether you use Bollinger Bands or Volumes or Trendlines or you combine other two indicators, you’ll find it more useful if you also employ them with my signals. Whether you use a discretionary or systematic trading system, you’ll find it helpful when it’s used with my signals in mind.

Please, remember that trading signals are provided for information purposes only and shouldn’t be construed as trading advice.

This article is ended by the quote below:

“Appreciate the process of trading. Don't focus on the prize. Don't worry about past mistakes, and avoid worrying about the future until it happens. By appreciating an ongoing trade moment by moment, you'll not only have more fun, you'll end up more profitable in the long run.” – Joe Ross

What Super Traders Don’t Want You To Know: Super Traders

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