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As I’ve traveled and given FX strategy presentations around the world, one question that frequently comes up from the audience is an inquiry about the strategy’s win and loss ratio. In essence, the listener is attempting to judge the quality of the strategy by its win ratio. (The win ratio is simply the number of winning trades divided by the total number of trades. For example, a trader who won on 15 of 20 trades would have a 75% win ratio.) ...
Pre-Trend Chart Patterns Every Trader Should Know: Part I Talking Points: Benefits of Pattern RecognitionThe First Pre-Trend Pattern: Zig-ZagSetting Stops & Profit Targets “…markets are chaotic in nature, but within this chaos are non-random patterns that repeat and are predictable” -Larry Pesavento, Some traders love to look for common price action patterns before entering in the direction of the overall trend to improve ...
Talking Points: Trend Strategies can use a 200-period MA filterRange Strategies can use the ADXAll other strategies can use the SSI filter Filtering a Trend Trading Strategy We’ve all heard the saying, “the trend is your friend” or “trade the path of least resistance.” These phrases are used by traders that want to trade in the same direction as the overall trend. But what if we have a difficult time locating the trend? What do we do if we ...
Talking Points: MVAs show the average price of a currency for a specific number of periodsAs price moves so will the indicator, giving clues about the current marketTraders can filter a trading decision based on the position of price relative to a MVA Simple Moving Averages (MVAs) are considered to be some of the most versatile and widely used indicators across markets and time frames. Typically, MVAs are used for filtering price action, as well as planning potential ...
Talking Points: Targeting X amount of pips per day is unrealistic.We should instead focus on diligently following our strategy.Trading with an edge using limited leverage should yield a profit over time. About once a week I receive an email from an aspiring Forex trader telling me that part of their trading plan is collecting a consistent 10-20 pips a day from the market. Or they might just ask me flat out for a strategy that only makes 10-20 pips a day. There is ...
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