Forex Swing Trade in 20 Minutes – Time Frames and Trending Strategy

Traders Corey Mitchell here with VantagePoint trading Forex swing trading in 20 minutes today, I’m going to talk about how you can do it in 20 minutes a week or 20 minutes a day depending on how much time you have you don’t really need much more time than that to implement these strategies, we are going to talk about timeframes to use as well as a trending strategy a quick review from the first video I talked about how to set up your charts that they’re all ready to go I talked about which pairs to trade depending on how comfortable you are I gave you a smaller list, if you’re starting out or a longer list, if you’re more experienced and they’re all just set up along the bottom chart, so I have mine all set up to a daily chart, because right now I’m using this time frame combination I’m looking at daily charts and for our charts, so how this works is all my charts are set up to daily charts, so I can flip quickly flip through them see, if I see any trade setups on the daily chart that align with the strategy this trending strategy that, I’m going to talk about in a bit, if I see a potential trade setup then, I’m going to drop down to the 4-hour chart up here on Metatrader it’s right there, so I’m on the daily right now you drop down to an h4 or 4-hour then on that chart since you have a little bit better view of the price action a little bit more detail it’s on that 4-hour chart where you’re going to put out your entries your stop losses and your targets another possible combination actually, let’s skip back for a second the daily 4-hour chart you really only need to check your charts once a week when you’re looking at a daily chart not a ton is going to change over a couple days, so you may get another trade setup, but likely not, so typically I’ll just check this once a week check my charts on a Monday Tuesday Wednesday night check my charts put out my trades, if I see any and that’s it, so typically, I’m going to come up with about one to three, maybe a few more trades a week depending how active the market is, but quite often it’s going to be one two three trades a week on an active week it may be one two five trades a week those trades are typically going to last several days to several weeks simply, because they’re based on this longer term timeframe the daily, if you want more trades instead you can start on the for hourly chart, so instead of having is all set to daily set them all to 4-hour and that’s going to be your big timeframe that’s going to be the one that you first look at and see, if you see a potential trade setup, if you see a potential trade setup then you’re going to drop down to the hourly chart, so, let’s just drop to a 4-hour here, so, if you were to see a trade on the 4-hour chart then you would drop down to the hourly and look for your specific trade signal, so, I’m going to go through my charts today on the daily chart, but you’re looking for the same pattern whether you’re looking at the daily for our combination or the for our hourly it’s all the same patterns that play out the only difference is with the 4-hour an hourly you’re going to get a one to five trades per day, so just a lot more whereas this we’re only getting one two three or five per week, so as you can see this time frame a lot more trades you’re going to be going through your trades every night or whenever you have time, but ideally every night, if you want to be more active and your trades are going to last also less time they’re going to last, maybe several hours to several days, so quite a difference between the two timeframes choose this one, if you want to be less active you’re newer to trading, maybe you just want to take a few trades starting out this one’s going to be the one that you’re going to want to use or, if you only have one night a week to trade and you’re not sure which night that is as I said you can put them out any night really and this one you can trade, if you want to be more active one note I will put out trades on the daily and four-hour up till about Wednesday night or Thursday afternoon I will not put out trades Thursday night or on Friday simply, because you’re almost right at the weekend anyway, so you may as well probably not a ton is going to change before the weekend, so you may as well wait till after the weekend and avoid the risk of putting out a trade on Friday, and then the market having a big move what we call a gap against you, so there’s that added risk of just holding through a weekend I don’t mind holding through weekends especially, if I’m using the daily chart on the 4-hour and hourly combination since your trades are shorter term your stop losses are going to be closer to the current price usually I prefer not to hold through a weekend, so I’ll typically also stop putting out trades by Thursday afternoon preferably Wednesday night, so you’ll trade this one I trade either Monday Tuesday or Wednesday the daily four-hour the four-hour one hour combination I’ll start putting out trades Sunday night any time through Monday Tuesday or Wednesday and by Thursday morning I’m really slowing down on putting out these trades and by Thursday afternoon I won’t put out any more then, if you do, if you did want to trade on Friday that’s more of a day trading day, but even not really typically volumes are volatilities a little lower unless you have a big news event like non-farm payrolls which comes on on Friday, so that would be a day trading day, but typically, if your swing trading just leave Friday alone just a trade or swing trade earlier in the week and leave Friday alone, so that’s a little bit of a tangent there, but a few extra tips to help you out with actually putting out some good trades, so now that we have that cup, let’s look at an actual strategy that we can use, so we’ve talked about these time frames now how do we use them, so this one, I’m going to talk about today is a trending strategy it’s a very simple strategy and the entry point is what I like about this I think a lot of people can utilize this sort of entry that I’m talking about, what I call a consolidation entry for, maybe some of the other strategies that you’re using as well, so even, if you opted not to trade this strategy still will probably help you out, so what I like to look for is simply a solid trend one that we can draw a trendline on and there’s some fairly rhythmic movement of course when we first draw a trendline that would have been the first point we could have drawn this trendline we have these two little Peaks here the price falls off comes back, and then starts to fall away again that would have been the first point where we could have drawn this trendline once we saw this price make a lower low, because that’s the definition of a trend we have a high a lower high a low, and then a lower low, so that’s a trend right there, so at this point we could have drawn this trendline it extends out to the right and gives us, maybe a bit of an idea of where the price could pull back to, so, let’s look at some potential trades all I’m looking for is the price to pull back toward this trendline, and then give me a specific signal which is that consolidation which, I’m going to talk about in a second, so on the daily chart here, if I was watching this in real time I would say alright this is interesting that price is pulling back toward my trendline it’s not exactly at the trend line which is OK with me it can overshoot it a bit or it can stay under it it’s more just is it in that vicinity we can also see the price here is very close to where this sort of top occurred, so while it could get up to this level there’s not a lot of room for it to move above unless it decides to go right above that level, so to me this has retraced quite a bit of that prior down move it’s popped back up its come into the top here, so this is this to me is a good trade it’s close enough to that trendline, so I’d say, all right that’s interesting I do nothing on this timeframe though the daily chart is just for seeing I guess what sort of trades look interesting there close to my trendline then we drop down to the 4-hour, let’s just find that trade again, so this is what we were talking about as you can see the four hour gives you a much more detailed view you’d have to really zoom out to see what we were seeing before, but this is where we do our trendline from these highs to this one, and then now we’re seeing that trade that’s coming up in approaching the trendline, but not quite there, so what we’re going to look for is as this approaches the trendline we’re going to look for what I call a four bar consolidation, so we’re on a 4-hour chart, so four bars that move sideways, so this is an up bar this is not a sideways bar unless this bar came all the way and retraced it showing that the price was moving mostly sideways, but instead it moves up we have a tiny little bar then this bar moves pretty much sideways to it not a lot of progress is made in either direction it moves up this one moves down not a lot of progress made to the downs or in any direction here over these three bars we’re just moving sideways then this bar drops away, but we only move sideways for three bars before we had a solid move to the downside, so this is not a valid setup we want to see four bars moving sideways you can get into three, but I’d say that’s quite a bit more of an advanced trade I I prefer looking at four here we have an up move then this one kind of stalls out this one moves, if you look at the whole context of this we’re pretty much moving sideways while this bar moves up this one moves down this one moves up this one moves down and this one just kind of flatlines and covers the whole range, so as soon as we have four bars moving sideways we can draw you don’t have to draw the circle on it, but around the square on it, but when you’re starting out it may be a good idea just that you can really see, if it’s a consolidation and a consolidation is just sideways movement, so what we’re going to look for is remember where we want to go short we got this from the overall daily chart we had a descending trendline the price is trending lower, so we want to be going short there’s nothing, if we drop down to the 4-hour chart and we see something that makes us want to go long or buy it does not matter we want to be selling this entering into a trade expecting this price to go lower, because our daily chart is telling us this trend is down, so that is the bias you keep in mind when you drop to the for hourly don’t get confused by anything that’s happening on the four hours oh look at this it’s going up nope remember you got the trade idea from the daily chart and all you’re doing is following through on the 4-hour chart to put out your entries and stop-loss orders, so based on the daily chart we want to be selling, so as soon as the price drops one pip below this low of this bar here, because that is the low point of these four bars five bar consolidation, so you can see there the low is 136 55 7, so you would be putting your entry point one pip below that one 36 54 7, so entry point right down here and you would have got triggered in on your sell on this down bar here then you’re going to place a stop loss 5 pips plus your spread above the high of the consolidation, so there we can see the high 137 43 9 my spread is about one tip on this pair, so five pips plus my spread, let’s say about six pips, so you would just put your stop-loss six pips above this high now in terms of a profit target I would say almost always go three to one, so whatever your risk is on that trade between your entry point and your stop-loss which in this case is almost exactly a hundred pips whatever your risk is on the trade in this case 100 pips multiply it by three and that’s where your profit target is going to go the distance from your entry point, so we’re risking a hundred pips we’re going to put a target 300 pips away from our entry point that middle number there says three three six two you move a decimal point one to the left, so that means the price moved three hundred thirty six point two pips from the entry point to here, so, if we would have placed our target at 300 pips we would have been filled right in this area gotten out of our trade for a nice profit, so three to one is a good ratio to use when you’re starting out that’s probably the simplest approach to take to a profit target three to one you can use two to one as well, if you want your trades to last a little bit shorter you’re not going to make as much on each trade, but your trades are going to last aren’t going to last as long, so you would have been out of your trade right when the price hit a 200 pip move which is right about in that area, so you would have been out here as opposed to down here, so a little less profit, but you’re out of the trades sooner, so that’s one potential trade now we can see remember on the daily chart we’re still looking for a Down move even though we can see there is a bit of a trend going up here on the short-term on the daily chart all we’ve done is move back toward that upper trend line which based on the descending based on the descending trendline and the overall downtrend we are looking for a short not along, so we’ll just look at this example as well, so here are nice movement sideways here we have an up bar this a wide-ranging bar, but then right beside it we have a strong down bar then sideways movement sideways movement sideways movement, so we can see overall the price has really failed to make progress depending on how you interpreted this you could even view that as the sideways movement, so this the down bar followed by these three sideways bars and a little bit bigger bar overall we’re still moving sideways though just to show you which ones I’m looking at, so just those bars here from this black one three ones in the middle to that black one that’s the consolidation, so as soon as the price drops below the low of that consolidation we’re going to go short one pip below the low stop-loss goes 5 pips plus whatever your spread is above the high, so in this case we’d be looking this bar I would use this bar simply, because it popped up to a slightly higher high, so we’d go 6 pips in my case depending on what your spread is you might want it a bit higher 6 pips above this high, so basically right at the top of that box there, so now we can look at what our risk would have been here we’re looking at about fifty four pips of risk fifty-five pips of risk, let’s round it off to 55 just for simplicity, if from the entry point sorry which is just one pit below the low there yeah fifty-five pips of risk, so, if we went with a three to one target sometimes you might have to pull out your calculator 55 times three we’re looking at a hundred and sixty-five pip target what a, maybe just barely got you out there, but, if it didn’t you definitely would have been out on this big move to the downside the other option as we mentioned, if you went two to one on this one you you’re risking fifty five pips you’d put a target two hundred and ten pips below your entry point and you would have been out on this down move right in this area, so two to one we’ll get you out quicker you probably will have a few more winning trades, but your winning trades aren’t going to be as big, so three to one two to one in a later video, I’m going to show you how to fine-tune your profit targets, so that instead of just using a ratio which I do recommend when you’re starting out, because it gets me in the habit of always making more on your winners then you lose on your losers in a later video, I’m going to show you how to fine-tune that, so that you’re actually extracting as much as you can out of the market based on its tendencies instead of just using a ratio, so the same concept would apply, if you were going long on this chart we don’t exactly have any long trades at the moment, because based on our daily chart this has just been a relentless gravy train of opportunities to sell I should point out that once you have a few other Peaks you’ve made a few trades adjust your trendline to accommodate those last few trades, so even though it cuts off a little bit that’s, because this is a more reliable trendline it’s connecting more Peaks, so this opportunity here we could have will have been looking at this one here as well then the price makes a very abrupt move to the downside it starts to accelerate more to the downside, so once we have this peak then this peak then we could have drawn this new trend line which would have showed us potential opportunities here and here here and here this was a brexit vote out of the UK, so not really something we probably would have been involved with here at least not with this strategy and now we’re watching for potential opportunities along this trendline here, so that’s the basic strategy, if you were to be going long, let’s just go back to this channel here, so this was quite a while ago, but we had this nice movement to the upside here moving within a well-defined channel we have higher highs higher lows overall price moving higher based on this, so nice trades to get into there, so we drop down to the four-hour this is when we would have drawn our trend line connecting this low to that low, and then we would have looked for opportunities as the price pulls back toward this trendline here we don’t really have a four-bar slowdown, so we wouldn’t be looking at an opportunity there here we also have several bars that move sideways, but then we make a little move lower, so not an ideal opportunity there either unless you view this whole thing as a consolidation which you could do each trader is going to interpret a little bit different when they view they’ll view what a consolidation is different and that’s, because what’s ultimately going to happen is I don’t ideally want everyone exactly in the same trade this mean it’s good, if we see the market in a slightly different way, so that we’re going to be in different trades we’re not going to be all hitting the same exact price levels here also potentially one moving sideways here this one, if you would have gone long here you would have ended up buying here and you would have been stopped out on this little move lower, but then we do have this while we do have a bit of downside and upside movement overall we do have some pretty good sideways movement, if you look at the overall context of this we’re moving in an overall sideways movement which is basically what we really want to see around that trendline, so here overall sideways movement again here overall sideways movement again, but we are stopped out on a big move here, so, if you would have gone long anywhere in here you likely would have been stopped out here we have a three bar slowdown we have a sell-off then one two three bars, and then we start to move to the upside a bit, so that’s one of those marginal ones where I said you can use three bars, but really you should be looking for four, but as you can see is just that pause that lets you know this trend lines still being respected, and then we had a nice move to the upside just based on the overall trend, so, if you would have gone long, let’s just go over one of these, let’s say you viewed this as a big sideways consolidation which it was you would have been going along one hip above this high stop-loss would go five pips below this low you don’t need to worry about the spread in this case that’s only when you’re going short just give the trade a bit of extra room above the high simply, because what happens is that charts are always based on the bid price, so at this bid price high the offer is actually two pips higher, so that’s why we put the extra bit of room when we’re going short on our stop-loss above a high when we’re going long the bid price here is the bid price, so the low is the actual low that you would have seen on your screen at that time, so five pips below the low here and you’d be looking at about a hundred and six pips of risk, maybe a little bit more based on putting it five pips below, so, let’s round it off to a hundred and ten to two one target would have been you’re risking 110 pips, so 210 pips would have gotten you out right about there, so you would have had a target there three two one would have been 110 you would have been looking at a three hundred and thirty pip target and it would have been very close whether you would have got out of that trade or not moved about three hundred and thirty-one pips, so you may have not gotten out with three to one target, so like I said two to one you might have a bit higher ratio or sort of higher win rate, but with three to one you’re going to get out of those trades with a bigger profit, so I leave that up to you for right now whether you want to use a two to one or three two one and as I addressed in a later video, I’m going to show you how to fine tune those profit targets a little bit more a quick little hint though is based on what I’ve drawn here while we drew a trendline along the bottom to help us out with our entry points we can also draw them along highs to help us give an indication of where the price could hit some resistance, so in this case a two-to-one might have been better in this area simply, because at 3 to 1 we’re starting to really get up into that upper range that we’ve been seeing where the highs have ghibli tended to reverse, so two-to-one in this case a little bit better just based on that, because we’re really looking for, maybe a little bit too much with 3 to 1 in this case just, because it’s right up at that resistance level, so that is the basic trending strategy all we’re looking for is a solid trend higher highs higher lows in the case of an uptrend lower highs lower lows in the case of a downtrend draw a trendline we’re looking for the price to approach that trendline it can overshoot it a little bit or be a little bit inside of it it doesn’t need to be exactly on the trendline and as I showed over time you’re going to want to address those trend lines to accommodate the price action which has unfolded then we’re going to wait for that consolidation preferably for bars as you get more advanced you can look for opportunities on 2 or 3 bars, but for it when you’re starting out I would I would say stick to 4 bars just that you’re making sure the price really pauses moves with sideways shows it’s respect for that trend line, and then trade the breakout of that consolidation put a stop loss 5 pips outside the consolidation and you’re entering as soon as the price moves one pip outside the consolidation on your entry point then stick a target out there whatever your risk was say it’s 50 pips stick a target at a hundred pips that way you’re always making more on your winners than your losers fifty and a hundred that’d be a two to one ratio a lot of times you can go with a three-to-one ratio, so that’d be you’re risking 50 pips you’re trying to make 150, so that’s how you would trade this the setup should all look the same whether you’re looking at a daily chart or a 4-hour chart remember the time frames daily and four hour or four hour and hourly the daily four-hour is going to give you fewer trades you only have to look at your charts once a week you’re only looking at about 20 minutes a week of time investment for our hourly you can put out trades every night you’re looking at about 20 minutes a day in terms of time investment there and you’re going to get a lot more trades, so no right or wrong here I use both just depending on how busy I am and it’s summer out here right now, so I’m trying to be outside a lot more, so I’m using the daily four-hour combination right now that’s where I’m looking for trades, so get used to those practice those pick your timeframes get in there start looking for those trend lines trends consolidations practice in a demo account setting your stop losses targets and in the next video we’re going to go over another strategy, so until then happy trading.

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