Friday, March 15, 2019

Forex Strategy That Works In The 4 Hour Time Frame

Slowly but surely my capital every week increases. 

But that’s only possible through dedication and discipline in following my forex trading strategy that works in the 4 hour time frame.
 It’s better like that because I avoid over trading.

  Overtrading is one of the reasons why most of the traders fail.

My defense is my best offense in the market.

Trading only on a minimum of once a week not only keeps me away from overtrading, it also gives me control over my emotion towards the market.

Don’t be afraid of missing out opportunities because the market is not going anywhere.

Stick to your strategy and patiently wait for your trading set ups to arise before you take an entry

Just like what I’m doing, I patiently wait and wait and wait for my set ups to occur before I decide to join in.

Enough said, let’s go on now to my 1:3 risk-to-reward winning trade in NZDCHF.

Using the same forex trading strategy in the 4 hour time frame consistently

I just want to say that I am literally using the same strategy over and over again in the market. Same set up, same plan, same risk to reward ratio set up, everything the same. Only that it varies on the forex currency pair that I trade on.

 Plotting support or resistance key areas

This is the first thing that I always do with the charts in the 4 hour time frame. I plot key support and resistance and wait for the price to make a move on those areas. This support or resistance key areas may be a horizontal line or in this case in NZDCHF  a support trend line as shown below.

key support and resistance
click the image to zoom in

Japanese candle Stick Formations Setup

The second thing I do then is to look for or sometimes wait for Japanese candle stick set ups to form in this key support or resistance area that I plot.

Using my own strategy, I need to wait for a combination of engulfing candles and/or pin bars.

In short my set up candles are engulfing candles and pin bars, but note that I said also that this candle stick formations needs to be formed right at a KEY AREA.

I don’t just randomly trade engulfing candles and pin bars, it needs to be formed in a key area as well.

And if we look at the image below, there are three bullish engulfing candles formed right at the trend line support that I plotted.

bullish engulfing candles
click the image to zoom in

Planning for the risk-to-reward ratio

  • Entry Point - This combination of three engulfing candles that are formed right at the support is my final clue for an entry trade. Of course you can wait for a little bit of pullback but in my case here I put an entry immediately upon seeing this 3rd bullish engulfing formed.

  • Logical Stop Loss Point - My stop loss placement is right below those bullish engulfing candles and the support line. I needed to widen my stop loss so that I can give some space for the price to move in and out. Also, it is much safer down below that area because buyers are positioned there to reject the price.

  • Profit target placement- As you may see in the image below, there is a clear previous resistance that formed.Since this bullish trade set up looks so strong with the presence of the support trend line and 3 bullish engulfing candles, I will place my profit target right at the resistance zone.

The final trade set up would then look like this below.

final trade set up
click the image to zoom in

Forex psychological stage a.k.a the waiting stage

Entry point, stop loss and profit target all secured. I evaluated the trade set up and I perfectly followed my forex trading strategy 100%.

My plan and strategy is already fixed and constant. The only problem now is my own psychology and emotion towards my trade.

That is why I set my trade and walk away from it. Not only that I avoid stressing about it but also I kept myself from interfering from it.

I will have no regrets if this turns out to be a losing trade because I followed my plan, I followed my strategy, 
I followed my system. I also accepted the fact that my strategy is not a 100% win rate and so I will have losses.


when preparation meets opportunity
click the image to zoom in

Yes, my profit target was hit and I gained 3% profits.

After almost 3 trading days the price finally reached out for my profit target.

Every time I have a winning trade like this it makes me more confident and trusting more on my trading strategy.

I managed to make an actual video of this trade here in my YouTube Channel. If you like you can watch this live video right here :

You can subscribe to my channel and browse my videos and you will see how my strategy evolved  from just a simple set up to up until to what it is now.

More power to you!

Thursday, March 7, 2019

2 Biggest Misconception About Forex Trading As A Career

People are drawn towards forex trading because of the idea of a promising career where you could acquire big amounts of money with minimal work involve.
 When I say minimal work involve I am talking about staying at home and sitting in front of your computer watching charts.
I know we all dream that kind of job where in we feel free, not pressured, no boss to report to, can spend more time with family and best of all a job that makes us financially free in our entire lives.
Becoming a professional forex trader is one of the few career paths we could choose to achieve this goal in life. But I’m telling you now that it’s not gonna be an easy path as what you have heard and watched in YouTube.
Here are two misconceptions about trading the currency market which I think attracted people and made them willing to gamble money in the market.


1. The thought that forex trading is the answer to all financial problems we are facing.

If you search forex trading in YouTube you could see some traders posting big gains from trading forex instantly.
Gaining BIG MONEY ALMOST INSTANTLY sparks our interests about it and activates the optimistic side of our brain thinking if that guy could do it why can’t we?
But you know in forex trading you will need to have money to earn more money.

Trading the financial market is the biggest online casino in the world.

In short, trading is gambling. The thought that you have financial problems should be enough reason why you should not engage in trading. Because as what the famous saying says about gambling,
 “The House Always Wins”.
If you are facing financial problems and barely just have enough money to live day by day then you should not engage in trading. Don’t think that this will be the solution to your problem, because it’s not gonna happen. Instead, it will just ruin you more and will lead you to a more depressing life.
Don’t use your life savings in trading the market because you will not be able to handle the stress and emotion that goes with it.
I’m not discouraging you to trade forex but it’s just really is the reality. If you really want to try trading, then you need to allocate a certain amount of money that you are comfortable losing.
That’s right, it’s not a quick rich scheme. If somebody is posting such big gains in just a matter of days in the internet that looks too good to be true then it may be not true.
Don’t be blinded by the potential gains you could earn, you have to think about the risk as well.
Success in forex trading takes time as well. It takes years to be profitable in this field.
Just like all the other careers in the world, it takes time to become a pro.
So don’t think that this career shift would suddenly end your financial problems.

2. The thought that its easy to become profitable in forex trading

Forex trading is simple, but it’s not easy.
It’s simple in a sense that all you have to do to earn money from it is to buy and sell the currency market. 
It’s easy because everyone can trade without any educational background. It’s easy because it feels just like playing a regular pc game when you are looking at the charts.
And because of these reasons we tend to underestimate it which makes us vulnerable in the market.

Forex trading is a psychological game

When you already started trading the market you probably think that it’s the market that you need to beat. 
But the truth is that it’s YOU, yourself that you need to conquer.
In this game you will need to handle your emotions well.
You will need to understand that this is a numbers game as well.
Every trade you take in the market has a random outcome. That means you will have a series of winning trades and losing trades.
When you are having a winning trade then that’s good, but when you are in the time of experiencing a series of losing trade then will you be able to handle the frustration and stress?
Would you still stick to your strategy? Would you still stick with your game plan?
It is reported that 90% to 95% of all traders in the entire world fails.
Only the remaining 5 % – 10% remaining are the ones who are profitable. Why is that?
Clearly it’s all because of the discipline factor of every trader. If only intelligence were the basis of trading then there would be plenty people making money from the market. But this is not the case.
Most failed because of greed and fear of the market. This then leads to anger and depression.
Taking a trade in these emotional states is very risky because most of the times we can’t think logically when we are more driven by these negative emotions.
These are the two thoughts that I think is the biggest misconceptions about the forex market.
I hope you learned something about this article and if you wish to learn about my profitable forex trading strategy in the 4 hour time frame you can just visit my YouTube Channel and watch my live trade videos.

Monday, March 4, 2019

My Forex Win Trade : CADJPY In The 4 Hour TIme Frame

It’s been a long time since I’ve posted my last winning trade. I’ve managed to record this fresh trade in the CADJPY forex pair this time and I want to share it with you.
With the help of my profitable forex trading strategy in the 4 hour time frame, I was able to find trade set up like this at least once a week.
It may sound boring to you to only have one trade set up a week but I’m here to tell that you don’t need to join every bit of the market’s movement to become profitable. Instead you chose your trade wisely and trade only when the state of the market greatly favors your bias.

One good metaphor of this is to trade like a sniper and not a machine gunner.

Don’t waste your bullets in every move of the market. Because the truth is that you only have limited bullets, reserved that shots for deserving targets or shall I say deserving trade set ups.
Enough said, let’s go on now to my successful trade.
I have been eyeing the CADJPY pair when I saw that the price broke out from a clear resistance. Based on experience I know that broken resistance will act as a support when retested.
When the retest happened, it created the candle stick formations that serve as my signal to go in for a trade.
As you can see in the image below, no doubt it’s an uptrend in the 4 hour time frame because of the higher highs and higher lows formation.
Notice here that the price hit the resistance thrice before it finally broke out as indicated with the black arrow. I waited for the retest and saw that the support was holding as shown with green circle.
resistance becomes support
click the image to zoom in

What I like about the retest in the support zone is that a BULLISH ENGULFING CANDLE was formed on it as encircled in the image below. That to me signifies that there are buyers in that area. 

bullish engulfing candle at support
click image to zoom in

I was still hesitant to take the trade because that for me is not enough for a trade entry. I need to follow my candle stick formation set up which is the combination of ENGULFINGS AND PIN BARS.
So I patiently waited and finally this BULLISH PIN BAR was formed yet again in that support area.
bullish pinbar at support
click the image to zoom in

The formation of this bullish pin bar should have been my trigger for a trade entry. Unfortunately, I was not around when it formed and it was already too late for me to join the trade when I saw it.

I don’t want to chase the price so I waited for the price to pullback. When I look at the daily chart, I noticed that there are two engulfing candles formed right at the resistance that I plotted in the 4 hour time frame.
double bullish engulfing in daily chart
click the image to zoom in

This to me adds up another confirmation that there is a big probability that the price would go up. I’m really eager now to take an entry, so what I did was I put a buy order at the 50% retracement of the last daily candle.
The price pulled back the next day and triggered my entry point. The trade set up then looks like this in the 4 hour time frame.
trade set up from retracement
click the image to zoom in

Using the Fibonacci Retracement Tool I measured the last daily candle and put my entry point in the 50% Fibonacci retracement.
I then set my stop loss below the bullish pin bar formation.
The most logical placement of my profit target would be the next known resistance in the daily time frame which is this zone as shown below.
profit target placement
click the image to zoom in

Since our trade was already set, what we need to do now is to stay away from our computer and do something else. Looking at the chart regularly will only make us interfere with our trade.

Approximately 24 hours had passed and our profit target was hit!

I was really tempted to close my trade early because I noticed that there is an incoming big news in Canada about their GDP.  Since we are trading the CADJPY forex pair the outcome of this news would affect our trade.
Luckily, the profit target was hit as shown in the image below. Just before the CAD news came out which is negative news for the CAD currency which then eventually made the price bearish.
profit target hit daily chart
click the image to zoom in

profit target hit in 4 hour time frame
click the image to zoom in

Noticed that the profit target was just barely hit by the price before it burst downwards.
I am really happy about the outcome of this trade even though I’ve only managed to bank 2% ROI. I could have made a 1:3 risk to reward ratio if I managed to put on an entry immediately after that bullish pin bar was formed. This would be a lesson learned for me to be on watch always when this 4 hour candles formed.
Anyways, I managed to make an actual video of this trade. You can watch it here in my YouTube Channel, just follow this link :
I hope you learned something from this long post.


Friday, March 1, 2019

Technical Analysis For Beginners Part 6: How To Use Fibonacci Retracement Tool Effectively

fibonacci retracement level

As you have noticed about the price movement of the currency market, it does not move in a straight line.
Instead the market goes in a wave pattern. The wave pattern is composed of an impulse and a correction move which happens endlessly and over and over again.
Eventually this correction move in the market can be sometimes predicted by the use of a retracement tool which is called the Fibonacci Retracement Tool.
This Italian mathematician discovered this Fibonacci sequence which he calls the golden ratio and considered to be the natural order of all things.
To make the long story short, traders understood that the Fibonacci levels can be applied in the forex market.
By the use of the Fibonacci Retracement Tool traders can now somewhat predict the movement of the market when the price retraces back before continuing its trend.
This price retracement in the market can sometimes be referred to as the pullback of prices. We can think of the wave impulse as inhaling and the retracement as exhaling of the market.
Let’s cut the chase and get to the point now.

How to use Fibonacci retracement in forex effectively?

Based on my own experience, Fibonacci retracement levels works effectively when applied in a clear trending market. There are traders who based their trading system on trend following and by the use of this Fibonacci levels they are able to ride the trend effectively.
In the examples below I will share with you how to use the Fibonacci levels as a way to make an entry to join a trending market. I will be using the 4 hour time frame since I based my strategy here and we will be focusing on the golden ratio which is the 0.618 Fibonacci level.

As what I have said before, we can only use the Fibonacci retracement tool effectively when it is applied in a clear trending market.
clear uptrend forex market
click the image to zoom in

How to use Fibonacci retracement levels in an up trending market?

The chart above is the CADJPY forex pair in the 4 hour time frame. Looking at the chart we could see a series of higher highs and higher lows which indicates that the market is moving in an up trending fashion.
Since this is an up trending market we are only be looking for a buying set up.
We need to look for a pattern where in there is an impulse move followed by a retracement move as what I have indicated with the ABC labels.
The A ---> B movement is what we call the IMPULSE MOVE.
The B ---> C movement is what we call the RETRACEMENT MOVE.
uptrend fibonacci retracement
click the image to zoom in
Now if we put on the Fibonacci retracement tool and zoom in, it would then look like this.

Note that I am assuming here that you already know how to position the Fibonacci retracement tool in the chart.
But for those who don’t know, just look for the Fibonacci retracement tool in your platform which looks like this symbol encircled with green in the image above. You then need to click first the start of the impulse which is the point A and then drag the mouse cursor over to point B to make the fib retracement position the same with the image that I used.
The price retraced back to the 0.618 Fibonacci level before it continued to go up. It’s like the market inhaled ( impulse move ) and exhaled ( retracement move ) for a bit before it burst upward and continue the trend.
By using the Fibonacci retracement tool we were able to predict where the market would end up retracing.
Noticed also that in the 0.618 fib level a small bullish pin bar was formed which gives us a signal and a set up to go long.
Another example below for a down trending market.
clear downtrend forex market
click the image to zoom in

How to use Fibonacci retracement levels in a downtrending market?

Again, our first step would be to look for a market that has a clear trend for us to be able to use the Fibonacci retracement tool effectively.
This forex pair is the CADCHF in the 4 hour time frame. We could say that it is an obvious down trending market, that’s why we will be only looking for a selling opportunity here.
The only part that needs focus and attention here is the part where you will be looking for the ABC pattern. Eventually, if you put more time on studying charts all of this will become much easier to find.
Assuming that we found this ABC pattern already, and we then position our Fibonacci retracement tool from point A to point B. The set up will then look like this below.

downtrend fibonacci retracement
click the image to zoom in

Look how powerful the 0.618 Fibonacci level is. The price tried to go up in that area but it was clearly rejected and formed a big bearish pin bar which for me is a strong indication that the down trend is going to continue which it actually did.
We could have entered this bearish set up right away after the formation of this red pin bar and locked in big rewards as we ride the trend downwards.
There is no doubt that there is some truth about the phrase “the trend is your friend”. It’s just a matter of strategy and techniques on how we can benefit from it.
Finally I was able to put out all my thoughts about this technical analysis for beginners article series. I hope that somehow you guys learned something from it.
I know there are still a lot to be learned about forex trading but it’s okay because we are gonna be taking it slow but steady.
Forex trading is a marathon and not a sprint, so let’s make sure that we have enough gas for the finish line.
See you in my next post!