Forex trading pair : usd cad
This is the 4 hour time frame, as we can see in the chart – there is a highlighted box and a highlighted oval shape.
The highlighted box represents the consolidation the market is in. If you have been following my blog, you would know that this is where i love to trade and is my daily money machine.
However i do not just buy and sell blindly at the top / bottom of the box. That is risky.
I play a safer way which is called confluence.
As seen in the highlighted oval shape. That area is touched / bounced off by the 365 moving average.
You have now learnt that that area is a strong one where price would usually react to it.
That area is also a price pivot area where you can see price paying respect to the area largely.
So now we have 3 reasons to enter:
1) It is at the top of the box / mini swing high
2) It is at the price pivot zone
3) It is at the 365 moving average
But i want more reasons to enter – I want a safer trade!
So i zoom down to the 1 hour time frame to see if i can find anything:
Wow! In the same highlighted oval, you can see that price is also touching the 150 moving average. So that is now a very good confluence to the above 3 reasons! 2 Strong moving average at the same time, even though it is on the different time frame.
Price will almost surely go down. There i took a sell trade right at the top with a stop loss + 10 pips above.
And if we waited for that bar to close. It formed a pin bar! Now that is CONFIRMED going down. No doubt about it.
Therefore if you missed to enter at the top of the pin, we could have also enter at the break of the pin.
And where is my take profit area?
The base of the box of course! marked by the tick drawn in the chart.
A simple easy trade. 88 PIPS! Although you may think it is only 88 pips, but don’t forget that my stop loss is only 10 pips, therefore you have gotten a large number of contracts placed on the trade.
Thats a pretty decent money!
After i took profit, Price is at the bottom of the box.
I took another easy buy trade at the base of the box
1) ( mini swing low)
2) that area is also a price pivot zone.
If you waited further, price formed a pin bar in the 1 hour chart and continue to form another pin bar in the 4 hour chart.
So No doubt about it, i took a buy trade and place my target profit area at the most commonsense area – which any one would have guessed! –
The 365 moving average!
Yet another 88 Pips! All within 3 bars in the 4 hour time frame!
Is that Good or is that Great! =)
If all the above strategies interest you, the stuffs i teach in my course is even better!
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