I have been studying the forex market for about a year. Early on my trade and study, I will be waiting in front of the monitor up to a 6-8 continuous hours stretch. I found it was a chore and it get into my nerve staring at the screen waiting for the market to give me a proper signal all day.
I finally devised or more aptly found a trading system that is inline with my trading habit. The system has been demo trade and also live trade for the last three months and along the way I have made minor adjustments for the system. I have introduced the system to a few friends but due to different temperament, trading habit and experience of my friends the system did not work too well for them. As it is known that winning the forex market depends 70% on the trader, the other 30% is the system. The system was developed so as I will be on my desk staring the monitor at maximum of less than 4 hours at one stretch. Due to my time zone, I choice to trade on USDJPY. I trade for 2 sessions. The first session will be the Asian session that I will start analyzing at about 23:30 GMT or 7.30 am, Malaysian Time. I will end my trading at about 11:00 am Malaysian Time or 3:00GMT (12:00 Tokyo Time). The US session will be my second trading time. I will start at 8 pm Malaysian Time or 8 am New York time (12:00 GMT). I will end my trading at 16:00 GMT, almost at London session closing. My target is to gain a 30 pips per session or 60 pips per day. When I have my 30 pips I quit although I might have more than 30 pips if I stayed longer at the market.
In my previous postings I have outline the system. Let us see through the system application on Friday the 13…suspiciously not a good day as believed by the Americans.
On the 15 min chart, USDJPY has been down trending from point B. At 24:00 GMT, support at 50% retracement of A-B could be a reversal point. Sentiment that carried over from previous US session indicated a further downtrend but historically during the Asian session the market will act differently from US session. I am expecting an uptrend and this will be reinforced by an expected bullish Nikkei on account of bullish Wall Street. Looking at the trusted lag indicator confirmed my conviction on the reversal as the blue lag has moved over 15 and the red lag is waiting to move from it bearish level zero.
My trade is as per chart below.
At 1:23 (0:23GMT) a green arrow indicated a B&S buy signal. I ignored the signal since it was not accompanied by LCD buy signal. At the previous bottom there was tweezer candles. I was expecting price to touch 60 period ema (light blue), corrected down and than moved further upward. This is based on the blue lag movement. The blue lag will move to 100 and than reversed down to go to zero. I will enter the market when the blue lag reverse and red lag move over 15. A red arrow i.e BS sell signal with sell signal of LCD at 1:28 is ignored as the risk to reward ratio is not favorable since the 20 period sma (i.e. the middle lane of BB) act as resistance is nearby. The subsequent B&S and LCD buy signal (aqua triangle) initiated by first entry for the day. USDJPY broke the 97.38 (the red horizontal line) i.e the top of a high closed doji (15 min chart) and my target is at the 200 period ema (the red line). Exited my position at the aqua triangle for 22 pips profit.
At 2:05 a sell with a red arrow is ignored as no signal from LCD. The second aqua triangle was my second long entry with a buy signal of B&S and LCD. The blue lag is moving above 15 and the 76.4% retracement level is expected to be penetrated. My first target at 100% retracement-97.71 and second target at 127% retracement-97.88. Within one hour trading, I have more than 30 pips profit.
