Forex Trading Strategy: Your Recipe for Success

this is number two event in a two part series hosted by Nick McDonald tonight’s session forex trading strategy your recipe for success will be presented and hosted by Nick MacDonald in just a minute, but before we get started just a couple of things I want to get out of the white hair first of all, if you’re new to the TradeStation presentation technology that we’re using here keep in mind that, if you have any trouble during this presentation you can refresh your browser or logout and log back in sometimes that will help with video or sound problems in addition in the bottom right hand corner you’ll find a Documents folder and in that Documents folder are links to things like our on-demand webcasts which I’ll push into the chat area now of this is archives of all the events that we do here at TradeStation, so anything that we’ve ever done a TradeStation in the form of an online event or webinar you can pretty much watch that event on-demand from that location on our website in addition on our website is the go live webcast schedule we have dozens and dozens events each month covering a wide range of trading and market topics, so definitely take a look and visit that site often and sign up for those events that you’re interested in the following presentation is for educational purposes only all symbols and trading ideas discussed by the instructor are for demonstration and educational purposes and, there are not recommendations active trading is not for everyone, please be sure to read the disclosure information and the PDF handout which I’m also now pushing into the chat you can also find additional important disclosures on the TradeStation website at, so without further ado, let’s turn this over to Nick McDonald nick is a longtime friend and developer of TradeStation he is not just a Forex trader, but someone who trades all markets he’s from New Zealand he I believe he’s in New Zealand tonight, so, I’m not sure what time it is there, but I’m sure it’s not a great time for Nick to be up, but we welcome him and thank him for taking the time to share his knowledge of the markets with us, so Nick it’s all yours thank you Mike hi everybody markets 8:30 a.m. for me in New Zealand, so we’re this Thursday morning it’ll be a Wednesday evening for most of you Thursday morning for me here it ends it and I’m actually going to be joining you guys over in the US and a couple of weeks time, so looking forward to that been on the right time zone a nice warm with it one sit down here right now, but getting straight to the presentation thank you all for joining us thanks Mike for the intro thank you the translation for having me today we’re looking at forex trading strategy specifically and I often refer to a strategy as like a recipe it’s very different to the ingredients that make up the recipe of the ingredients of technical analysis we need the recipe is like the strategy, so there will be the topic for today we’ve got lots to get through, so I will get straight into it I just want you to, please have a quick read of us another risk one just really letting you know I provide education only I do not provide advice of any kind, but I won’t tell you what you should do, but what I will be doing is showing you how I trade forex markets, please have a read just give you a few seconds to read that note here is where our full terms and conditions can be found on our website trade with precision comm board slash terms and moving straight into the presentation, but a little bit about TradeStation as well and as Mike said I’ve been using TradeStation for a long time I don’t just trade Forex, but it’s one of my key markets one of my main markets I also chose futures and I also trade a little bit of stocks not, so much lately to be honest though historically I have, so certainly futures and Forex my main markets, but just on the Forex side I mean TradeStation charting is outstanding for things like one it’s, so easy to go and scan the markets, so one of the key reasons I first switched to TradeStation many years ago, but also the fact you’ve got, so much back data to be able to go back and back test improve strategies and also just to be able to see major support and resistance levels, because for me supportive resistance is a big part of my trading and when you know, so many packages provide say six months worth of data and you can’t actually even see supportive assistance with six months worth of data, and then they might think they’re really good, if they give you five years with the data, but still when I’m looking at support and resistance levels from back in there and they’re you know 90s when I’m looking at Forex with TradeStation and we’ve got that much information, so it’s very useful in that respect for the data it’s just a great scan until I’ll show you some tips towards the very end as to how I use it to scare in the markets you’ve got a great selection of currency pairs and just super tight spreads now on the execution side as well with you know with the trade station the new transition Forex product, so a company I am honored to work with and the product that I use myself as well a little bit about my company about trade with precision just in case you don’t know I said I’ll be brief on this now we’ve been educating traders since 2006 it was actually my broker in London who first invited me along to speak for them and soon after that I started working with TradeStation who was another one of my brokerage companies, and then I kind of started you know the company was kind of born from requests just for me to come and educate clients company grew by word of mouth and the strong corporate partnerships that we have, so we have many partnerships with exchanges and brokers around the world not just in America, but around the world and we get good word of mouth from a quant, because we feel good job by them a good service I mean our job is to help you become better traders we can do that then we know you’ll tell your friends about us we provide long term and handheld education programs today of course I’m just here to speak to you for one hour, but we also have an offer at the end for anybody who might be interested for a more long-term handheld education program our specialty is not forex or futures, so like I said I trade both of those, but our specialty as a company is trading strategy for any market any time cram the strategy I teach today I’m bound to get the question does this work on future, so probably still get it even though I’ve just answered it now, but yes it does I mean, I’m going to relate this to the forex market today and show you a strategy which is great before its markets, but my specialty like I say any market any time phone it’s not just an intraday strategy it’s not just the swing strategy it’s not just before it’s not just for futures it’s for looking at a chart and deciding what to do next, but today of course we’ll be focusing on specifically trading us on the forex market we have a team of professional traders around the world it’s not just me one of the things since we’re here on a Forex webinar that you might be interested in is we have a market commentary with another commentary newsletter a video newsletter comes out for free every Monday, so there’s a currency one and an equities one, but it comes out every Monday been doing that for a few years now and goes down through here well that’s completely free trade with precision comm and you’ll see a pop up come up you can just fill in your details or, if you missed the pop up then you can just click on free newsletter and register for that, so that I’ll just give you an outlook for the week I don’t I don’t do what you read in the paper and review what happened last week, because that’s old news I might spend 20 seconds on that, but I review I mean I look forward and say what I think will happen this week where I believe the markets will be trading for the week ahead just a few I said we educate some of the you know well we’ve got a strong corporate partnerships this is some other kind of companies we work with of course TradeStation now many of the trading exchanges which you’ll recognize, and then some other companies there which are more kind of global well and the rest of the world, for example, CMC Markets and its capital being UK British companies straight to our agenda for today, so I want to just spend a little bit of time on eight critical forex trading errors the reason I’m doing that I want to get it out of the way ahead of the strategy because, so many people think it’s just about strategy and I want to show that’s one of the most stakes people make, so I want to show people some of the mistakes that traders make and specifically of course here forex traders make I want to show you what the Forex professional secrets trading success is and I don’t use the word secret lightly in fact they use it a little bit tongue-in-cheek I think in this profession too many people you know claim there to be secrets and you’ll see when I get to that, but actually they’re not secrets at all just people don’t believe them, so, I’m going to tell you what you know what I believe the secret is not that it’s you know a mystery, but it’s that the new traders refuse to believe it I want to look at modern technical analysis and how you know this is precision technical analysis the way I use it not the way it’s taught in the textbook Forex price action mastery, so this is going into real detail on the price charts how do we decide even which chance to trade, so we’re looking at things like optimal chart structure just eyeballing the chart and deciding is this a chart we even want to look further round we’ll look for certain moving average patterns will look at certain candle patterns in combination with the moving averages and the chat structure and we’ll combine these things together to get a strategy which is our precision moving average strategy for today then we’ll have some next steps as well for anyone who’s interested in taking things further I just want to check something, because at this stage I’m used to having already had about 30 questions and I can just see one person there having said hi no, let’s check everybody’s their can type something the question box for me just, so I can make sure that you’re all here we go thanks Christopher there we go everybody’s there normally before we even start we’ve had a hundred people say hello from Texas and hello from Kentucky and all that kind of stuff here we go now we’ve got those coming through – – Houston – Richmond perfect, so everybody can hear me everybody’s are there we have got an audience that is good tonight, so it’s true I’ll keep going now, so eight critical forex trading errors these are things we want to avoid in order to be successful by the way Mike just said this is a quiet group no longer any more quiet, please ask questions as you want to, if the questions are on topic I will answer those questions as I go, if the questions are off topic I’ll just keep them to the Eun, so also I just have to know I usually remember to do this little pre warning I am prone to speaking for longer than I should, so I’ll crack on again now, but forgive me, if we go a little bit longer tonight chances are I might finish 10 minutes over the schedule or something like that, but I got quite a few slides to get through there we can see we’ve got 54 slides, so continuing straight into it, so first critical forex trading error one is focusing on traditional chart patterns rather than trends what do I mean by this I mean and I did this myself, so nobody taking offense to this, because I’ve done this and I’ve seen since then thousands of my students do it and almost everybody that comes to us who considers themselves an intermediate-to-advanced Schrader, but they’re not yet, making money and what they’re doing is focusing on things like hidden shoulders patterns and double bottoms doji’s and candles and shoot it up though geez hammers shooting stars those kind of things and they’re focusing on traditional charting and actually I mean, if we take away the candle patterns will come to those later, but, if we focus on things like the double bottoms they’re hidden shoulders the triple bottoms the cup and handles the pinions the flags all of that stuff you know what every single pattern every single one the whole chart pattern encyclopedia can be covered by what is the trend yeah people skip over what is the trend they memorize higher highs and higher lows from an uptrend and lower highs and lower lows with downtrend then they go on to all this other stuff and they wonder why Fibonacci never makes sense, because of Fibonacci retracement is a retracement up a trend and they don’t know what the trend is they may wonder why I can’t find these textbook patterns, because they don’t really appear textbook each time they just return the changes that looks different each time, but, if you understand the trend you can see a reversal happening and it doesn’t really matter what you call it you can call it whatever you want really it’s a change of trend I don’t believe in names for things, but people get, so focused on names and that’s like been focused on ingredients it’s like trying to bake a chocolate cake can be really focused on sugar and sugar only and forgetting all the other ingredients, so what we want to do is we want to focus on the most important aspect and the most important aspect of trading is the trend it doesn’t mean you have to trade with the trend means you have to know the trend inside out and know what a strong one looks like know what a weak one looks like never want us reversing no when there is no trend and, if you do that forget the names of any pattern there’s not a single one of the medes every single one of them are summarized there by understanding for trend Colonel critical error number two lack of a proven strategy now even people that have a strategy I mean I’ve seen I think people with a strategy of read the paper to pick up the Wall Street Journal or the Financial Times or look at Bloomberg com read some news make a decision place a trade even, if that was your strategy it’s not a proven strategy it’s actually a kind of an irrational subjective type strategy, but equally it doesn’t have a precision entry point and that’s what technical analysis does it gives us the opportunity to really time our entry to with absolute precision and the strategy which I teach you today will have a precise entry point right down to the pep no subjectivity about it, if this pattern sets up you will buy right here to that pep there’s no, maybe a little bit higher or, maybe a little bit lower or, maybe I’ll watch and see what happens people that watch and see what happens they’re amateurs watching seeing what happens in price moves and you go damn oh I knew I should have got them too late we need to know precisely where to get in and predict what will happen next and be happy, if it goes on hence our target would be equally happy, if it hits a stop loss, because I’ve stopped worked we’re right one of my students gave me that phrase my stop worked be quite happy to be stomped out precision entry precision stop precision target third critical area not knowing of not knowing I should say not knowing where to place stops will take profits, so the first part was the entry the precise entry point part of the strategy also there was placing stops and taking profits and even, if you do have a precision entry point then, if you don’t know where to get out ie where you were wrong or where to take profits with consistency, if you don’t have a consistent approach to taking profits you won’t get consistent results and the thing I find although ultimately every traders end goal is to make money you know what I think is even more important consistency and actually most people are, so unconcerned and the reason are consistent is, because they don’t have consistent rules they apply different rules all the time and it’s mostly based on emotions and is, so often based on the results of the last two or three trades whether they will risk a little bit more money or trade a little bit more aggressively all based on history or based on the memory of the last few trades as compared to a precise strategy fourth critical error they’re looking for the holy grail of forex trading I meet these people at the traders expose all the time, so you guys some of you might have seen me at the New York explore the Vegas Expo we get people coming around and you know what most popular question is when they come to our booth do you guys have a trading room or do you sell some kind of black box and our answer is we’re not tipping service know what I mean in some ways we do we’ve got a video newsletter where we put out our trades hunts, but it’s not a trading room as such and we don’t do tipping service, but the thing is they’re saying people are walking around those experts time and time again and one year they find something new they’re guns being fired grand or ten grand on this product, but the next year they’re looking again, because that didn’t work looking something else they’re always excited about some new products, but they’re looking for the Holy Grail like there’s going to be this black box system while this trading room where you can just sit and follow someone else’s trades and make your living trading the markets after on this challenge out there thousands of people all around the world all every time I speak I say this find me someone anywhere in the world anywhere it makes their living follow me someone else’s signals makes their living not just done it for the last couple of weeks a couple of months we’ll find those people everywhere someone who makes their living following someone else’s signals from a black box or from a trading noon, because you’ll find hundreds of thousands of people subscribed to them finally someone has been subscribed for many years makes their living doing it that doesn’t exist, but there’s many traders making their living from the markets you know why what the Holy Grail is you the trader get good at trading that’s the secret get good at trading that’s the Holy Grail unfortunately it’s harder than just going to spend in a few grand it’s going to be a case of you’ve got to put some air for them another era is thinking that trading is about picking winning trades thinking that’s about hitting the home run trading is about good risk management it’s about good discipline it’s about having a strategy and executing a strategy flawlessly it’s not about being right I cannot be right all the time you cannot be right all the time it is impossible in the markets, but the thing we can do right the thing we can control its executing a strategy correctly each time six critical error focusing only on one Forex pair across I mean this is a common one I only trade euro dollar I only trade cable I only trade dollar yen why why do you only trade there even why do you only trade all three want to trade some other stuff right now do you know what the best trend in peer in fact, I’m going to ask you guys what is the this is a Forex session right, so what is the best trending for expir notice I mean peer, so that could be a peer or cross it could be any two counties with each other and in fact they had a big reversal today or overnight for me, but what has been the best trending peer in the last couple of weeks, so we got your $1.00 I’m reading your answers here your a dollar is a dollar what’s wrong come on guys have a crack what has been this is the for accession you guys must know Kiwi euro no by the way those aren’t bad answers, because the Aussie and the key we’ve both been training pretty well the euro has been going down, but not as strongly versus euro dollar things like you’re a CAD euros II have been much stronger not dollar Swiss far from Dallas worse definitely not cable cables been about the worst oz he in we’re getting closer the loonie we are getting much closer combining the answer of ozzie guillen in the loonie, and then we might get the right answer cad yen Canadian dollar versus the Japanese yen has been by far the best trend encounter you know as I said last night in the last kind of six hours it’s reversed sorry when I say last night last night for me and my time zone today for you guys in America it’s reversed today the train has had a big fall off, but some of our best trading opportunities for me and my team in the last two three weeks have been on CAD yen as the trend has just been, so strong what would you want to just trade euro dollar as you heard there was been doing nothing for the last couple of weeks the euros been trending, but the euros weak and, so as the US dollar, so you’ve got to weak currencies versus each other what happens nothing, because they’re both weak need to trade a strong one versus a weak one we’ve had a really strong Canadian dollar bet a really weak Japanese yen CAD UN’s been a great trend those are answered Ozzie and kiwi they’re both not too far up at either, because the Aussie and kiwi have both been very strong just not as strong as kabuna, so we need to be able to find the best currency here’s to trade don’t get fixed on trading just the majors or just you know the ones that you know that you might know it doesn’t really matter, if you trade a chart it doesn’t matter and tradestation tight spreads blast them all 34 or 34 I mean I probably think I trade something like 26 of those 34 that are available with trade station I’ll show you them a little bit I’ll show you them I think I do lack of emotional control and discipline as well this is a yeah it’s a big one it’s it’s probably 95 percent trading as mine said I could do I could talk about this for about three hours, but I bet Knox I’ll keep on going, but it’s not just about strategy believe me it’s about having the discipline to stick their strategy it’s about controlling your emotions and focusing on good trading as the bid to drop and loss and the most critical one not implementing a risk management plan not accepting risk and not having a plan to avoid and reduce risk though these are crucial successful trading is all about risk management, so, let’s get to these secrets a little bit tongue-in-cheek, but, let’s look at what his secrets are what’s the first secret risk and money management ensures survival we hear of all these traders blowing up, and then we’ve him and hear of them blown up you know banks, because people took on too much risk that’s it not even necessary, because they took bad trades, because people took on too much risk traders that blow up property developers that wipe out businesses that go bankrupt they take on too much risk no, I’m not all businesses do buy some businesses probably just got a bad product some businesses just go wrong, but traders, if you blow out you have almost certainly not managed your risk accordingly, if we can just survive would give ourselves a chance to get good second secrets trade success is the emotional control sign I did have it in the eights in the eighth critical areas, but this is what creates this teaching strategy and teaching a trend I’ve got a three year old child who I’ve taught to recognize a trend he can tell me whether something has going up or down that is not difficult he can pick the best trends he can pick the ones that are sideways and he loves it he’s three years old strategy is not difficult, but you know what I counted your three-year-old is the emotional control side and this is the part especially for adults that we do find, so difficult, because we’re so attached for money and the ego being right and wrong and it’s controlling these emotions which ultimately create our success, so even though today we’re going to be focused on strategy we and not, so much mindset I wanted to get these things out upfront just quickly just to let you know how an audit may up, if we’re focusing on risk management right the question I get asked all the time is well make you say risk one percent of my capital per trade how can I get rich doing that one percent of my capital and it’s a question we get us all the time I know I’m speaking to amateurs when I get that question, but think about who there who’s one of the richest men in America I think number three richest men on planet earth is Warren Buffett Warren Buffett 25% per year for about 60 years ultimately give or take that says what he’s done 25% per year and one of the richest men on the earth for doing it yet, I see trailers all the time come along and said nope, I’m not going to risk 1% I don’t want to risk 1% to make one person I want to make 25% per trade 25% per week minimum 25% per month I say hold on a second Buffett does 25% per year it’s one of the richest men on earth it does it with consistency you’re trying to make 25% on a trade, and then wondering why you’re wiping out and losing your account we need to get rich slowly you can get rich in the markets, but you get rich slowly with well with a good strategy well-thought-out trades and very low risk per trade giving yourself a chance to get good remember that phrase I love it get rich slowly best part about getting rich slowly you still get rich amateurs focus on reward trying to get rich quick professionals focus on risk management some of our most popular questions are things like where do I take my profit why would I get out there when I could have they didn’t made more hindsight trading going on now white a profit at one-to-one wouldn’t BIC trade with the three two one when they’re looking at the hindsight I don’t know I wouldn’t have got out there I would have got out there we all would in hindsight the problem is we have to do this in real time when we get questions like these we don’t know we are talking to amateurs, if you want to take a giant step I can’t stress this enough a huge step towards professional trading focus on risk reduction good risk management and try to stop focusing on making money, because professionals they make money as a byproduct of the good trading images are, so focused on trying to make money they lose money then they get set focused on losing money they get all emotional and they get into this you know what’s known has been stuck in a rut whereby it’s just not going for them and it’s very hard to get out of that especially without the skills to do, so focus on risk management you’re going to make your trading life a whole lot easier, so, if there’s enough of background on now spent 15 minutes or thank you, so little, maybe it’s been a little bit longer, but, let’s get straight into the chart inside, so firstly modern technical analysis technicals missus trading strategy remember technicals are like the ingredients there is more cons than pros in the traditional sense and largely, because I mean this has happened to me like I said when I learned head and shoulders and I learned double bottoms and I learned pennants and flags and all that kind of stuff don’t learn doji’s hammer shooting stars and all these different patterns, and then what people do and what I did as well I go out and I try and trade double bottoms doesn’t work, so I try and trade MACD crossover doesn’t work, so you try and trade you flags and pennants and doji’s and all this kind of stuff and nothing works and ultimately I only realized this it seems, so logical now, but only realized after I got the experience myself, but I was trying to bake a chocolate cake with a cup of sugar and it wasn’t working, so I was trying to bake a chocolate cake with a cup of flour and it wasn’t working, so it’s trying to bake a chocolate cake with eggs and it doesn’t work and of course in you know with baking a cake we’re smart enough to know that that’s not the way it works me that will need the ingredients to be combined and we need the recipe of how to how to combine them, but in training people don’t tend to teach strategy they tend to teach ingredients and call it strategy, so I think strategy is a Mis misused term, because I’ve seen people say this is much energy by when the index markets get down by when your a dollar breaks a pivot that’s all just one ingredient that’s all trying to bake a chocolate cake with a cup of sugar and it’s a fast-track to losing money, so what do we need we need the recipe combining things together it’s essential the trading success we can buy on multiple technical papers together and turn these ingredients into the recipe, so these are things that won’t serve you like a textbook might lead you to believe these things are all ingredients and actually it’s all kind of ancient historical traditional technical analysis I don’t use any of it apart from telling you why I don’t like it you’re never going to hear me talk about this stuff ever again, because it’s all a load of rubbish it won’t help you make any money what do we need to know again we need to know and focus on what truly matters other balls or beers in charge is it who won each candle the boys will sell us and not just the only are they is there an uptrend downtrend on no trend, so either the buyers willing to sell us win it or no one want in we can also look at the context of each candle and say who won the candle wise or the sellers or nobody there’s only three answers how many candle patterns are there out there hundreds, but actually there’s any three bullish bearish indecisive buyers one sell us one nobody want just like what the trend is either an uptrend a downtrend on no trend every single pattern there is in the whole history of technical analysis is covered, but you can answer what’s on the screen right there every single one all that matters the most important stuff yet, people are all focused on names and new books and new techniques and it’s all stuff that’s not going to help you we need to use it leading indicators that predict what the market will do next not lag I’ll show you what I mean by this a little bit later on, but this often raises a few questions about all what is a leading indicator a leading indicator and my definition simply tells you what Christ should do or is likely to do before prices moved a lagging indicator tells you what Christ should do new price has already moved to create that very signal, so, for example, when a MACD or a moving average crosses over that crosses when price has already moved and it’s too late the price move was already occurred that’s a lagging signal, but a signal lacks a convergence and divergence between price and indicators gives you an indication of what Christ should do before it does it that is a leading indicator and we want to combine our technical knowledge together and have a precision entry a precision stop loss and a precision target this is what creates a trading strategy question the miss price action the only leading indicator no I use indicators as well I use Mac deianeira cipher I look for convergence and divergence between pricing yeah that’s true Bonacci is another one I mean there’s other ones, but you’ve still got to be able to answer these questions here first, because they are always in the context of the trend I’m looking for convergence of the trend divergence of the trend fibonacci retracement of the trend everything comes back to trend I need to know who’s in control first, so what really matters the basics matter the trend matters I’ve had people come along to me right and I’m talking, because I know some of you here will be going hard on that I’ve been trading for a couple of years I know about trans isn’t going to help me this is not a session on trends by the way it’s a session on strategy, but, I’m going to tell you the trend is the most important thing, if you guys came to me and did every single course I’ve got paid for one-on-one mentoring with me everything you know what there’s not going to be any new secret the trend is still going to be the most important thing that will never ever change, if I ever say something different come and select me around the face please, because I would be wherever says anything different I’ll have got the stage like, so many other educators out there well they’re just trying to sell another book of another course the trend is the most important thing my objective is not to sell a book of the courses to help you become a better trader the basics make money don’t let anyone ever tell you otherwise I’ve had people come and pay me really good money to sit down and learn this stuff and they always say Nick I know the trend and oh the trend and I say prove it just show me then just, let’s go through a few charts you show me and I all they do is prove that they don’t know the trend as well as they need to we need to master the basics, if you up listening to this then almost certainly you’re not making as much money from trading as you would like to and, if you’re expecting you know, because some kind of fancy was bang proprietary indicator then you come to the wrong place literally you can go waste your time and your money someplace else, because that’s not what I teach I teach what matters to succeed and it’s this basics mastery of the basics doing them extremely well I love this quote from Bruce Lee I fear not the man has practiced 10,000 kicks once, but I fear the man has practiced one kick 10,000 times Michael an example of a leading indicator is, for example, convergence between price indicators convergence between price and indicators will tell you that price is likely to continue divergence will tell you a price is likely to change direction I do not consider volume now it down Harold, so what does price action we’re going to look at price action mastery here note that way at mastery this is key what is price action well it’s just this much simple data no moving averages no indicators no nothing just pure price action price is always King indicators themselves are based on price, so you don’t even have an indicator without Lacrosse anyone that says just look at the indicator again it’s just rubbish, because the indicator can’t be more important than price crisis King there is no indicator without it what the indicator should do remember it’s sticking with the cake analogy the indicators like the icing on the cake we make our decision from price and we should look at indicators to confirm that decision not the other way around not completely ignore the price and make a decision based on the indicator make a decision on price, and then confirm that the indicators back that up that will just give us a higher degree of probability, so what does price action mastery well it’s an understanding of the off price to a point that you don’t even really need indicators, if you open structure we’re going to cover this trading with the trend we’re going to cover this try support and resistance moving average patterns and zones will be a big part of today’s sessions candles, and then multiple time frames these are all price action now some people might say hold on moving averages why have you got move here, but just their moving averages our price regardless of what you want to call them a car could have could have called them price average price average just an average of price therefore to me they are still priced are the only thing that comes under my term of price actually mastery and I’ll always use them in combination with Christ never on their own I’ll never buy or sell, because a moving average crosses over from one another, but I’ll use the moving averages in combination with price to make my decision around the zones where should be buying selling just checking the questions there no cross sections the same across all time frames, so first part of our optimal Forex chart structure we want to have nice clean smooth flowing trending charts now that makes probably virtually no sense until I’ll show you what I mean on the chart, so we’ll show you in a second what we’re trying to do is we’re going to stack the probabilities in our favor and the first step they’re just eyeballing the chart taking a look at it and deciding is this the kind of chart we want to be trading to do that we want to know the charts we need to avoid, so anything without a clear trend anything with lots of gaps anything that has really big candles and erratic movements and big tails and wicks there’s anything that Subway’s are range bound or erratic you want to avoid just have a look at some something that vest right this is what’s this dollar sing US dollar versus Singapore dollar it’s a two-minute chance it’s a pretty low timeframe just to illustrate a point well this is just a gapi chart Forex chance shouldn’t really gap and I shouldn’t really spike not like other markets do, so, if you’re a stock trader you’ll think of that child looks pretty normal there’s a Forex trader believe me that is not good enough you don’t want to trade dollar sing on a two-minute chart you want to go and look for something else go and look at your $1.00 on a two-minute chart you’ll see a very different picture, so I by the way don’t trade two minute charts on Forex I’m just using that to show you don’t want to trade charts that have gaps never on the forex market do want rate gap e chance , because they just shouldn’t exist it shows a lack of liquidity we want to avoid chance without clear direction, so this when we look at this what is it this happens to be W in 60 minute it’s probably an old chance I don’t think well I can’t trade belly in, because this is just an old chart to illustrate a point where to next for dollar yen you know what some people think that someone like me professional trader can look at that chart and tell you where it’s going next, but you know the truth I haven’t got a clue with us going next, I’m not even going to waste one second of my time trying to figure it out, because there’s no clear momentum I don’t want to trade it, because I know I’m spoiled for choice there are, so many chance with Queen momentum, I’m going to go and try those, I’m going to go and trade the chance for there’s obvious direction where the tide is already flowing in my direction and I can just go and swim with that time, let’s go with the momentum go with the flow I don’t want to trade this, because there is no flow, so I’m just going to move on to the next chart, all right look in the question desired the one asking me all the questions, but I would not suggest a trade a sideways choppy market no, so what’s my structure look like just then nice clean blowing cha even at the top of this chart that didn’t have a little pullback hasn’t it, but pull backs are completely normal we’re looking for no gaps no erratic behavior just nice flowing charts obvious momentum and we’ve got a couple of areas on this chart I’ll probably just get the drawing tool out here just a couple of areas like this big, but on the left-hand side notice it’s quite hard to use this oops tells it, I’m not going to try and do that again some reason that science I was just trying to highlight these little bits here and I think it’s going to, let me anyway you guys can see the bits right the pits where prices trended in the right direction, I’m not sure where that hand is not working for me today, but just the bits where price is trending in an obvious direction all going up that is these nice pair though you can see my cursor, but these nice periods of nice obvious direction there’s just two periods of pullback in there which are completely normal as well, because that just means the higher time frame train is pulling back, so moving averages patterns and zones first step is just to select a chart with optimal child structure nice clean flowing charts trending in the right direction not gap in not erratic obvious momentum obvious momentum no gaps we want to look at moving average patterns and zones, so how were using the moving average and what are they well they’re just giving us an opportunity an opportunity to join the prevailing trend alright, so we’ve found a trend already we found out the more charts – like what’s on a screen here and we’re looking for the equal equilibrium zone though where we can be looking as zone knows the words own to buy or sell as price pulls back, so notice even here on this chart that’s on the screen notice how price at the moment, if you’re looking at the hard right edge of that chart crisis away from that moving average zone isn’t it and we’re looking for a pullback into that zone what that’s what we’ll call the buy zone notice that all the way up through here prices moved away from the tenant 20-period moving average and pulled back into it, so the 10 and 20 are the black and a blue line that’s the two fastest averages there now though, so price moves away pulls back his away falls back moves away pulls back constantly just pull him back into that moving average by zone, so moving averages are simply smoothing out the short-term fluctuations in price and showing us the real trend at a real buyer zone is the zone we want to be entering the trend not the point will enter by the way I don’t buy or sell based on an average remember it’s part of the strategy out of the ingredient we want to look for call backs into that zone, so we’ve got 200 period a 50 period, and then a 20 and 10 period moving average the buy or sell zone as I call it is the zone around the 10 and 20 period moving average, so some traders use the either support or resistance levels we don’t that’s lagging we certainly do not use them for things like moving average crossovers that is completely and utterly a lagging strategy when moving over just cross each other it’s, because price has moved we don’t care about that we don’t use that in any way shape or form what they are though is like dynamic trend lines there’s another thing that we don’t do is draw sloping lines in our chart the subjective, but that’s a conversation for another day, but what they show us they are our buy and sell zones our equilibrium point where we’re looking to join the trend.

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