A lot of traders have been sharing the success they have been achieving using this strategy – well done for your discipline, patience and determination. I have found that a lot of people tend over think Forex and for some reason believe it is complex. The reality is that if you follow the rules you will succeed – it really is as simple as that. Everyone that has been practicing the exercise of lining up price has been seeing results. If you find that you are struggling then look at the formula and identify where you are falling short – pay attention to working on the weak areas and don’t quit until you get it. The daily ritual is the same.
1. Identify direction of price on the daily chart. I like to review all the USD and JPY pairs on a single screen – I call this scanning the USD and JPY pairs. This also helps me identify the strength or weakness of the quote currency.
2. Identify if price is moving in the same direction on the H4 chart. If it is then move to the H1 chart and do the same. If it is not, then make a note of what you are waiting for – this becomes your plan. It is easy to be patient when you know what you are waiting for. Start to make notes of how long it takes for price to fall into your trap. Set reminders on your phone so that you don’t forget to check the chart later in the day. Alternatively focus on fewer pairs – set a goal to get those right and then once you feel comfortable you can increase the number of plans you are waiting to execute.
3. Once you find that daily, H4 and H1 are moving in the same direction then you look to your M15 and M5 for overbought or oversold conditions, find support or resistance and then pull the trigger. Make a rule of only buying at support and selling at resistance – and as close to it as possible.
The most important thing right now is not making money – it is perfecting your technique on a demo account. The habits you are learning now will be applied when you are ready to go live. When you are live there is no more time for practice – it’s the real deal and if you aren’t prepared you will be punished by the market and we all know where that leads.
If you can change your focus from making money to only trading when all the conditions of your plan are met and knowing your technique inside out, you won’t be trading with a desperate mind. When a trader is in control of their behavior and emotions they will achieve success. Let go of the past – of all the loses and frustration you have suffered up until this point will not serve you. Today you have the opportunity to follow the rules and be in control. This day will pass – it’s your choice how you feel when it ends. You are either going to learn the same lesson you have already learned over and over again or you are going to do something different and take the first step towards achieving your goals. Why not just try it and see if it works – what have you got to lose?
USD Scan (Keep in mind there is a FOMC statement coming out later today)
EURUSD: Daily oversold. H4 moving down. I am going to wait for an overbought H1 before looking for resistance.
GBPUSD: Daily approaching oversold. I am going to wait for an overbought H4 and H1 before looking for resistance.
AUDUSD: Daily oversold. H4 moving down. Waiting for an overbought H1 before looking for resistance.
NZDUSD: Daily oversold. H4 moving down. Waiting for an overbought H1 before looking for resistance.
CADUSD: Daily at overbought. H4 approaching oversold. H1 moving up. Waiting for an overbought H1 before finding resistance.
JPY Scan (Keep in mind there is a BOJ meeting on 29 July)
EURJPY: Daily moving down. H4 moving up. Waiting for an overbought H4 and H1 before looking for resistance.
GBPJPY: Daily moving down. H4 moving up. Waiting for an overbought H4 and H1 before looking for resistance.
AUDJPY: Daily moving down. H4 moving up. Waiting for an overbought H4 and H1 before looking for resistance.
NZDJPY: Daily moving down. H4 moving up. Waiting for an overbought H4 and H1 before looking for resistance.
CADJPY: Daily moving down. H4 moving up. Waiting for an overbought H4 and H1 before looking for resistance.
Note: As you can see I am waiting for an overbought H4 on all the Yen pairs. This is my plan. I now open up a JPY Scan showing all the H4 charts on my computer and I wait patiently. I do not trade until the requirement of my plan is met. I don’t care what happens in the market. I do not react to price. I sit back and enjoy the wonderful feeling of not trading. When the requirements of my plan are met, I open each pair individually, look at the M15 and M5 charts, confirm they are overbought, identify resistance and pull the trigger. I place my stop loss above the next weekly pivot resistance while ensuring that I am using a lot size that ensures I am not exceeding 1% risk per trade.
REMEMBER: Read Kate’s post on fundamental news so you know what’s happening in the news http://forex.today/forex-major-currencies-outlook-july-27-2016/.
ALSO REMEMBER: Only open the trade if M15 and M5 are both either overbought or oversold and at resistance or support. If the higher time frames are moving down then you want an overbought M15 and M5. If the higher time frames are moving up then you want an oversold M15 and M5.
If you have not bought a ticket for the Wayne McDonell event taking place on 8 August in Johannesburg, South Africa and would like to spend a day with the master trader who developed this strategy and learn the other components of the strategy, please go to www.handsfullofrands.com and click on booking.
Best of pips to you!!