This technique requires identifying a candle pattern that I call a tech one trade.
Specifically, this candle pattern is either an engulfing candle pattern or Morningstar/evening star pattern.
A special tip it may help you is to wait for the candle pattern to close and complete itself.
Do not assume that it will make a candle pattern until the candle has closed.

I use the CCI indicator and macd histogram however it may be used with other technical indicators, you may need to do some testing if you use something other than the two I listed.

The setup requires there to be some form of consolidation with a clear support and resistance identifiable on the 30 minute chart.
It begins with the candle that closes above or below the range of consolidation, specifically, support or resistance.

once the candle has closed outside of the consolidation range in price has moved perhaps 30 or 40 pips, if this activity is not something you prefer to trade fearing possible false moves outside of consolidation, you can wait for price to retrace giving you a second entry opportunity and also additional confirmation.
trading like this will take a great deal of fortitude however patients makes the trader.

The retracement will usually occur or pull back to another level of support or resistance depending on which direction prices headed.
Retracements using Fibonacci tools such as the 382, and 618 levels are quite reliable.
Often times you will notice Price retraces to an old support or resistance level, typically the high or low in which created a consolidation range to begin with.

All of these are forms of confirmation and waiting for the retracement to occur allows additional time for a trader to gauge and identify market sentiment and price direction on an intraday basis.

Please see the first chart picture of the breakout candle and the retracement.

Once the retracement to a support or resistance level has occurred I wait for the tech one candle pattern to develop. In this example using the GBP/USD 30 minute chart it was a bullish engulfing candle.
This example shows several forms of support as confirmation.
The 20 psychological level,
the daily fulcrum,
and also the 618 retracement level.
These are just a few forms of confirmation you should be aware of when using this technique.

The entry is on the close of the completed tech one candle pattern,
again a tech one candle pattern is an engulfing candle or Morningstar/evening star pattern.
The stop is placed several pips below the price swing that creates the candle pattern.

Depending on price activity at the time and also considering the actual time, targets are approximately 15 to 40 pips from entry.
You may also consider using Fibonacci extension targets based on the most recent price going on the time frame you are trading from.


thanks for reading
good luck
LC

thanks for share your system here, how long have you been using this system ?

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Forex Indicators Collection

I trade two basic techniques, one is a break out of consolidation and the other is entering on a pullback when price is trending .

My techniques can be used on almost any timeframe however I prefer the one hour and four hour charts using the daily chart for overall trend direction and the 30 minute chart to minimize the stoploss levels and pinpoint specific entries.

Just a short time ago, from the time of this writing, April 13, 2009, 1 p.m. New York time.
I have a confirmed bullish breakout candle on the four hour chart for the EUR/JPY.
Specifically, the move is a potential bullish breakout with a potential profit target of 136.00 and above.

The stoploss levels however would be quite large trading off of the daily or four hour chart so I prefer to wait and watch the 30 minute and one hour charts.
What I am looking for is a pullback to a support level, perhaps a psychological level, a fulcrum point or a Fibonacci retracement, and even a combination of these.

Once I have identified the retracement I look for a bullish candle pattern such as engulfing or morning star pattern at this support level. It will take a great deal of patience and discipline but I am specifically looking for a closed completed bullish candle pattern on the 30 minutes or one hour chart. I stress the fact that I only analyze closed completed candles as this eliminates jumping in to soon in anticipation of a substantial move. Waiting for the candles to close is an additional form of confirmation.

As time continues I will post another candle pattern when it develops on the 30 minute or one hour chart to signal a possible entry for this pair. I stress waiting for the pullback and looking for the bullish candle pattern before entering. This will allow for much more confirmation.


This same breakout technique is the one I used today on the EUR/USD which was a bullish trending move, April 13, 2009. The reason I look at the 30 minute chart is to minimize stoploss levels based on the most recent/significant price swing on that timeframe after I have an entry point.
My entry is on the closed completed candle pattern.

I am also including a chart on the EUR/USD trade that took place today.

Thanks for reading
Good luck
LC

Thank you prasxz...

I have been consistently using this method for over 5 years.

It has worked through the changes in the market this past year,
as with any method... I have to stay aware of the market changes as they occur and make the necessary adjustments.

L.C.

This post is an extension of my previous 30 minute scalping technique.

Below you will see a comparison between two charts,
one worked better than the other and for several reasons.
The first one is GBP/USD 30minute chart.

The first thing to notice is that the white line is the 20 day EMA. On this timeframe it shows that the trend remains intact and it is only a pullback. What I am looking for is what I call a tech one candle pattern and more specifically it must be a closed candle pattern. I do not want to assume anything when trading so I absolutely have to wait for the candle to close.

When the candle finally closed and completed the pattern, there was a bullish engulfing tech one candle pattern. This is my entry.

Now, notice the EUR/USD 30 minute chart.
There are several things that are a bit uncertain on this chart. First of all price is well below the 20 day EMA which could provide a little bit of resistance or perhaps a smaller/slower move.

When we are scalping we are usually looking for quick short profits in a relatively short period of time.

It is possible that the EUR/USD trade will work however we are trading against the trend and it is very different from GBP/USD. My point here is that as traders we should only look for specific patterns or locations to enter a trade we feel will provide the greatest opportunity to succeed. There really is no point in testing the market with real money, we can save that for our demo accounts.

So while the EUR/USD worked, the safest trade was GBP/USD and we need to be aware of all the technical information available in the chart.
The comparison here is just to show that one looked a lot better than the other and when you’re in a trade there is no reason to panic or be afraid. We want to take trades we can be comfortably sure will usually result in a profitable outcome.

By only taking trades that we are comfortable with and we understand, we are more likely to observe the market and what price is doing in a more educational and responsible way.
When we enter a trade we are not sure of in the first place, what sets in is panic and uncertainty, and it makes it very difficult to be aware of what is actually happening in price. Often times when we are in a bad trade which we were aware was a bad trade to begin with, we start to see things in a way that represents what we want to have happen rather than what is actually happening.

This is another tip for the 30 minute scalping technique which can result in 15 to 20 pips each time you use this trade in the correct locations. It is available on almost all currency pairs several times per day.

Stops are equivalent to targets.

Thank you for reading,
good luck.
LC

A larger time frame can be considered any time frame larger than the one you are looking at to identify a trade entry.

There are valid trading techniques and methods for almost any time frame however it is always important to be aware of what is actually taking place on the larger time frames such as the four hour and daily charts.

Support and resistance are key levels we must always be aware of even if we trade on a five or 10 minute chart.
Often times day traders will use a smaller timeframe to identify entries and profit targets and their focus becomes myopic and they no longer look at the larger four hour and daily charts.

I would like to discuss an example of using the four hour and daily charts to determine whether or not the market is trending or inside of consolidation which often times can be found using the larger time frames.

This example is a recent example from the time of this writing.
I am using GBP/USD.
The first chart shows consolidation on the 30 minute chart.

Knowing where support and resistance is on the daily or four hour chart isn’t always possible to see using the 30 minute chart. Always giving the larger time frames a quick look before making a trading decision will work in your favor.

I considered entering a trade on this pair during this 30 minute consolidation when it appeared price may be making a move, however looking at the daily chart shows a significant old resistance level that is now possibly acting as a support level, if only temporary. This daily support level was not noticeable on the 30 minute chart by itself.

Identifying this support level on the daily chart keeps me from making a trade decision to quick without looking for confirmation. I may need to wait for some significant economic data that will make some kind of an adjustment and re-evaluation of this currency pair or it may simply take time before sentiment wins over in one direction or another.

At this point, I will isolate the consolidation area on the 30 minute chart and when I see a breakout candle, again I will look at the four hour or daily chart. Hopefully at the time of the breakout candle on the 30 minute chart I will see some kind of candle pattern on the four hour or daily. This could either confirm the bounce off of this possible support area on the daily chart or indicate that price will be moving lower and breaking through the support level.

No matter the outcome, what is very important is always to remember using the larger time frames as an additional source of confirmation for your Forex trading strategies.


Thanks for reading
Good luck
L.C.

Whether we can admit it or not,
Patience will make or break your Forex trading strategies. Especially a scalping Forex scalping strategies.

There are times when there simply isn’t a trade to be made. And even if we need the money, we might lose more than we could make if we don’t find the strength to restain ourselves and our thoughts.

Today I was watching the EUR/USD. (april 21st 2009).
For the most part, the EUR/USD remained inside consolidation with nothing more than perhaps a small scalping opportunity. If you are not in at the right time, you might as well forget it because the stop loss on days like this ends up being more than any potential profits.

My first suggestion, learn how to correctly identify consolidation.
Not just on large time frames, but on the time frame you are trading and looking for your entry.

Once you can correctly identify consolidation, knowing when you should stay out of the market and refrain from trading becomes a lot easier. Again, there are simply days when we shouldn’t be trading and your Forex trading strategies should include methods for identifying what state the market is currently in.
Is the market trending or inside of consolidation and what time frame are you using to identify the state of the market? These are serious questions you should ask yourself before ever considering any trade.

A tip I can share with you and one that has probably kept me in the game a lot longer than most,
“Only analyze closed candles, regardless of what time frame you are looking at. Never assume that a candle will close in a certain way. Just wait till the candle closes before making your decision.”

A second tip is to obviously spend as much time as you possibly can learning how to identify consolidation.
Watch and learn everything about it. Watch it during holidays, watch it during news events, watch it when certain markets are closed. Remember learning to successfully trade the forex will take time and you will need as much experience as you can possibly get. It’s the only way!


Thanks for reading,
Good luck
L.C.

The principles to this 30 minutes scalping strategy can be applied on almost any time frame however please make adjustments for stop loss levels and profit targets.

This trading strategy takes place approximately 3 to four times in a 24 hour period between the three major currency pairs.

I like to use this strategy on a 30 minute chart however I know that some successfully apply it on smaller time frames. When choosing to look for a different time frame you must do some testing to determine your comfort level for profit targets and stop loss. Each one of us prefers to use a different type of stop loss and it may change the outcome of this strategy but I will attempt to explain my stop loss strategies with this 30 minute technique.

How to set up your charts:
I typically use the CCI and the MACD histogram. I also apply the -DMI and the +DMI to my charts and when I am looking to scalp I often times will rely on the DMI.

In the price pain window I use a 20 day EMA. Generally I will go long when price is above the 20 day EMA and short when it is below. These are just some basic outline principles and can be adjusted according to market conditions such as consolidation.

I also use the fulcrum based on each day price activity. A general method of using the fulcrum is to go long when price is above the fulcrum and short when the low.
please remember these are just outline rules to apply some structure, don’t forget to do some testing.

The set up:
The entry occurs when I have a completed candle pattern such as a morning star, evening star or engulfing candle pattern. I must stress that I only analyze a trade when I have a closed completed candle on whatever timeframe I am using.

For example,
If price is inside of consolidation, I will look for one of these candle patterns to occur at support or resistance on the 30 minute chart and I prefer price to be below or above the 20 day EMA according to the rules I mentioned above. Now in reality it isn’t always going to look like that when price is inside of consolidation. The 20 day EMA will often times move in a semi-straight-line through consolidation making it difficult to get a reading.

If this is the case I will only take one of these candle patterns when price has hit support or resistance that I can identify during the consolidation stage.
If there is one of these candle patterns in the middle of this consolidation, I leave it alone as it may be a false move.

The other location I find an entry to use the scalping method is when price has actually broken outside of a consolidation range. What I am specifically looking for is a confirmed closed breakout candle. Afterwards I watch for the retracement to either support or resistance depending on which direction price has broken out. Once price has returned to a support or resistance, again I look for that candle pattern in the direction of the confirmed breakout.

Using this retracement pullback method will also allow for additional forms of confirmation such as finding the support or resistance level with psychological levels, Fibonacci retracement levels and the fulcrum. Additionally old highs and lows will come into play often.


Profit targets:
I am basically looking for 15 to 25 pips as a profit target. This method can be used with only one lot as there is no scaling out of the trade. Comfortably I look for 15 to 20 pips on GBP/USD and approximately 15 pips on EUR/USD.

The stop loss levels are approximately one to one and equal to profit targets however on occasion it is not always possible to make that so and depending on market activity at the time retests are bound to happen. Specifically retests to support or resistance levels that often times will be very close to your stop loss.

If the stop loss levels such as support below the candle pattern that creates the entry is too large and unacceptable to you, pass on the trade and look for another opportunity.

Often times using the 30 minute and the 15 minute chart will provide numerous opportunities to keep stop loss levels within 15 to 25 pips.

That’s basically it.
The tip I would recommend always remembering is only analyze and wait until the candle has closed creating the pattern you’re looking for. Also don’t anticipate price will continue any farther than you planned. Simply take what you intended to from the beginning of your trade and follow your plan.

It is always when we change our plan that we tend to lose.

If you would like to see chart examples please instant message me and I will be happy to forward them or perhaps with enough interest I can post them here on this thread.

Thank you for reading,
good luck.
LC

I want to share with you a few tips about a trade technique I use.

The first thing I would like to say is that it isn’t always possible to make a trade when ever a pattern appears.

This is part of the reason automated trading systems don’t always work. It takes an experienced forex trader to stop and analyze the activity taking place in the market at the time a potential trade develops.

Sometimes the signals will be mixed. You might see a BUY order on your charts but the economic data and market expectations may be telling you a different story.

When I see conflicting signals between the fundamental and technical analysis, I will consider staying out of the trade even if it appears that there is a trade. I would rather watch how price reacts without risking my money than to test a theory or my ego, and lose money.

There will always be another trade and there are many to chose from.

The first thing any Forex trading strategy should include is a very specific plan that gives an exact entry and target with appropriate stop loss. But each time that pattern or trade sets up, you must confirm it with the economic data that is available or at the very least, market sentiment.

This is because not every trade will work and that’s were it takes trained human analysis.

The scalping trade I use is a specific candle pattern that is easy to use and identify. However it requires confirmation. The confirmation is what a automated trading system can not do and something that will take time to learn on your own, or you can speed up the process by finding an experienced professional to teach you to details and nuances that cant be over looked.

The scalping technique developed on both the EUR/USD and the GBP/USD. They both need confirmation and looking at the chart you can see that GBP/USD was clearly inside consolidation.

What is consolidation?
Well we all know for sure that it is not a trending environment with momentum behind any move. When price is inside of consolidation it will usually move around with no clear direction and trying to use certain trade techniques will usually result in a stop loss triggered.

So that’s our first lesson, don’t use this scalping method when price is inside consolidation.

Notice the difference between the EUR/USD and the GBP/USD.

I used the method on the EUR/USD because price had broken outside of the consolidation range and the GBP/USD had not. I watched the GBP/USD at the same time just to make sure my analysis was correct and if I would have tried the scalping technique on the GBP/USD, I would have been stopped out. And soon after price went to the anticipated target. This is an all to familiar situation for all of us. Getting stopped out yet price still goes to the target.

How do we eliminate the chances of that happening?
Looking for an opportunity for price to move in a predictable manner with momentum behind a move. The perfect example of this is the EUR/USD. This one was on its way with price breaking the consolidation and traders driving price when they saw the breakout occur.

So remember, you must know the difference between consolidation and a trending market. There are different trading strategies for each situation.

Thanks for reading,
Good luck
LC

Thanks!......................