I will be using mostly technical analysis to determine my trade ideas. The currency pair I will be mainly focusing on is the NZDUSD &/or XAGUSD.
I will first determine the overall trend of the market by using my weekly and monthly charts for directional bias. My H1, H4 & Daily charts will be used to confirm if I will be following the overall trend of the market based on weekly &/or monthly bias or whether I will be taking a counter trend approach.
I will be looking for high probability trades, where often times my risk:reward ratio is at least 2:1, by patterns....such as H & S (Inverted); double & triple tops and bottoms; ascending & descending triangles; pennant; channels; and range plays......breakout and momentum trades. I will also be looking at price action at significant resistance and support levels, and a retest of those broken levels to enter and exit trades.
The technical tools that I will be using to help me to enter and exit trades include: Fibonaccii Levels, Zig-Zag and Stochastic (14, 3, 3) on the H1, H4 & Daily. I will be using the Zig-Zag for resistance and support. Also a retest of a broken levels based on zig-zag pattern. Stochastics will be used to assist me in taking a trade based on oversold and overbought criteria, depending on my bias. The Fibonacci Levels will be considered if lined up with a zig-zag resistance or support and a retest of broken resistance and support. If bias is bullish/bearish....38.2; 50 or 61.8 depending on which level lines up with zig-zag support/resistance or retest of these broken resistance/support levels.
I will be risking 0.02-0.05 lots on a single trade idea. I will be looking for trade opportunities between Monday-Tuesday and close position by Friday. Depending on market sentiment I will make an executive decision if I hold the trade over the weekend.
My trade ideas will mainly be based on price action @ significant support & resistance levels, and a retest of these broken levels, determined by zig-zag and fibonacci confirmation.
I will outline the set-up in a trade idea for the wk of Sept. 26-30, 2011.
I will be sticking to this plan to the "T"! Let's see how much pips this plan yields me!!
Happy trading and have a great weekend!
On Friday September 30th, 2011 at 10:24PM by Pipster4lyphe - Like - 0 People
On Sunday October 2nd, 2011 at 05:21PM by krissylinne - Like - 0 People
Looks like you got it all planned out, Pipster4lyphe! If I may ask though, how do you use the zig-zag indicator? I'm familiar with Stochastic and the other patterns and indicators that you mentioned except for the zigzag. Overall though, I really like the idea of looking at longer time frames for direction and identifying opportunities in the shorter time frames. How about making swing trades on Wednesdays and Thursdays too? I bet it will work well with midweek reversals. :)
On Sunday October 2nd, 2011 at 05:47PM by Brad - Like - 0 People
It sounds as though, first, you have a solid risk management plan, which is the most important aspect of trading from my perspective. Using longer term charts and also looking at shorter term charts is something that I also do. For instance, NzdUsd has been in a somewhat long term up trend on the weekly chart. I figure that it will eventually re-enter that uptrend momentum. Even though that is the case, I still tend to want to follow the current daily momentum which is down, until the market really shows it's hand and continues that longer term upward momentum. Using price action, support and resistance, and chart patterns can make for good trading. I am not sure with those tools why you need such a reliance on indicators. Why use the stochastic for over bought and over sold? Why use the zig zag? Anyway, just my thoughts.
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