Sunday, October 14, 2012

Earning Money Either Ways With or Without WR

Before I proceed to share how you could make money when a currency pair is moving, I would like to make a disclaimer:

This method although sounds logical, may not work for you if it does not suit your trading personality. It has resulted in a couple of winning trades with only one loss so far. This is NOT a holy grail and you should only add this trigger into your arsenal of triggers if you are comfortable with it. (perhaps do some paper trading/ back testing)

This was what happened on friday. I took this trade and was in a short position. Notice the current red box. What happens if price did the following (see below)?           
If price close above, this would be a WR of two days low, indicating a long trigger. This is what you know. But here's how to trade this IF price does not do that.
Here's the rationale behind this trade idea. Price has broken two day long and shows a strong bear. Price attempts to retest previous support turned resistance and resistance holds. Therefore, price would likely go down resulting in what you will call a bearish expansion :) good to receive the alert that there's a bearish expansion in audchf (which I did). SL would be above the blue line since if price manages to close above, it would indicate its a WR.

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