The first key to making 120 pips in one day is realizing that you might not be able to make 120 pips every day.

I know this seems obvious but it is a very important concept to understand.
It’s possible that if your trading plan requires you to make a set number of pips every day, you could find yourself forcing a trade when there really isn’t one which could cause you to give back any previous gains you have made.

It is better to begin your trading day with an open mind and accept what ever the market is doing. This includes understanding that there are times when the market is inside of consolidation. When this happens there will be fewer trading opportunities that are successful. During times of consolidation many trading systems will generate an entry signal but they end up going nowhere and the trades get stopped out.

On the other hand, it is also important to be able to identify when the market is breaking out of consolidation and there may be a trending day.

Trending days or breakouts of consolidation are usually due to the release of economic data. Sometimes even statements from a Fed official or government agency might do the trick. Whichever the case is, most likely the consolidation just before the breakout is due to anticipation of the news or some event that can cause a change in the valuation of the currency pair you are trading.

These two concepts are very important and will make a big impact in your trading success if you understand them. These two concepts are also directly related to how often you will be able to make 120 pips in one day. So having a solid understanding of economic data and how it affects the currency pair you are trading is vital to your success. It is also confirmation for many of the technical trades you may find.


Now onto the technical side.

It has been said that one of the easiest trades to identify is a break out of consolidation. This is most likely due to the tight range that is easy to identify on your charts. If a breakout of consolidation leads to a trending day, it could set up the opportunity to make 120 pips in one day.
(This of course would be easier if you are trading more than one currency pair)

The challenge with trading breakouts of consolidation is trying to avoid false moves or head fakes as they are sometimes called. There are methods that can help you identify a possible head fake. One of the first methods I use is watching my indicators. If I see some divergence between price and the indicator, I will usually treat the moves out of consolidation with caution.

A very important tip that I think may really change your trading method for the better is something I learned very early on in my trading career. I only analyze closed candles.
For example, if I see price moving outside of consolidation I will usually wait until that candle closes before I make my decision to enter or not enter a trade. I will not usually enter as the high or low of consolidation is taken out by price without the closed candle. I will only do that if I have solid confirmation and a technical trade that has developed before the breakout of consolidation.

This principle of waiting for the candle to close before I analyze it is something I have applied to my trading for many years with great success. It works no matter which time frame you are trading with. Give it a try and see how it works. You will notice that if you try it for a while, it may keep you out of many bad trading decisions.

The three key concepts so far are:
1. Learn to identify the difference between consolidation and a trending day.
2. Learn to identify divergences between price and the indicators you use.
3. Wait for a candle to close before doing your analysis.


Now some technical details.

Using my original explanation of consolidation will probably be one of the easiest ways to explain this method. Consolidation for most people is one of the easiest price patterns to identify. However when the markets become quite choppy it can cause quite a bit of confusion for the inexperienced.

Another tip that may help you is get to know the normal consolidation range for the currency pair you are trading. Most traders understand that each currency pair has a different tradable range. What I am referring to is the normal or average high and low for the day in a given period.

For example GBP/USD can move a great deal farther than the EUR/USD when it is trending.
Just the same, when GBP/USD is inside of consolidation , the consolidation range is usually a little wider than EUR/USD.

You may want to take some time and do a little back testing. Back test your favorite currency pair and identify consolidation ranges just before big breakouts and trending days. Once you identified the consolidation range measure the high and the low of that consolidation range. What you’re looking for is enough back testing to create an average consolidation range for that pair.

Having the average consolidation range data will help you confirm when you find consolidation in a live market.


How to trade it.

All of these tips can be helpful but what traders really need to know is where to enter the trade.
It’s like the old saying goes “knowledge is only potential power, it is useless unless you apply it.”

My favorite way to trade a break out of consolidation is to start off with identifying market sentiment and being well aware of any economic data that may be released after I enter the trade. I prefer to have economic data already released and out-of-the-way before I enter a trade.

I also wait for a candle to close outside of the consolidation range. In addition, I use my indicators for confirmation and I do not want to see any divergence between price and the indicator.

Once I have a candle that closed outside of the range with confirmation I feel it is safe to enter however before I place my trade I need to identify a stop loss level. A typical stop loss level incorporates support or resistance. If I do not want to risk more than 40 or 50 pips as a stop loss level I may need to be patient and allow price to move outside of the consolidation range and wait for a pullback. This pullback would appear to be testing the high or low of the breakout range of consolidation.

Once I have this pullback which appears to retest the breakout range, I then look for a candle pattern such as an evening star or morningstar depending on the direction of the trade. When I have this candle pattern that’s my entry. As far as targets I would look for Fibonacci extensions or support and resistance. I also prefer to take trades that have targets equal to the stop loss level I use or double.

This method requires practice and patience. Many traders become quite excited when price begins to break out of consolidation ranges. Many times they jump in too soon and price falls back in the consolidation. By waiting for the pullback and using the method I described, I will have plenty of time to confirm market sentiment, any news that has been released and I also minimize my stop loss level.

I tried to present this information in a clear manner. I do realize that trying to learn a trading method by reading a description on a webpage can be a little difficult. But I feel this is a valuable trading technique and sets up almost every day on just about every currency pair. The techniques and strategies are also applicable to different types of trading methods. Once these concepts are understood it opens up many new opportunities for you.




Thank you for reading,
Good luck,
L.C.

And.... good MONEY MANAGEMENT

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Forex Fundamental | Forex Signal | Forex Guide

i went into this web, and suddenly found out someone introduced me eko cohyono indicator created by indonesian engineer. and i studied for a while and immediately tried to use those indicator. and i made about 200 pips. that was great and it was 90% accurate. traders especially beginners should try that one. hehehe..

How do you tell something is in consolidation ahead of time? I never know until after the fact? I also do not use any indicators to trade....

Hey Bro,where is the link to the eko cohyono indicator???

how long you trade use that indicator so you can say that was 90% accurate?

__________________
Forex Fundamental | Forex Signal | Forex Guide

http://www.forex-tsd.com/attachments...cahyono-mm.mq4

Only good for now and again strong trend trades

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Rule number one, it’s okay if you do not make 100 pips everyday.
This is the first rule because if you apply too much pressure on yourself chances are you will make mistakes and lose money rather than make 100 pips.

Rule number two, only trade when you see your specific trade set up. Anything else, leave it alone.
How many times have we all been in this situation? We see price moving and even though it may not be a trade we understand we try it and it fails. This is a very frustrating situation and you will only put yourself in a position where you have to work harder to replace your losses.

Rule number three, when you see your trade develop, look for confirmation and then do not hesitate, simply take the trade and set in your stop loss and your profit target. Then leave it alone. This is easier said than done.
The confirmation I speak of is of course several different things.
My first tip is I wait for a candle to close before making any kind of analysis. I do not assume anything.
Waiting for a candle to close means whatever timeframe you are using, wait for that pattern to complete and the candle to close. Whether you are using a five minute chart or a 30 minute chart. If you see a potential set up wait until it is complete before making your analysis. Try not to jump in a trade just because you see price moving.

The other confirmation is to look at where the US dollar is relative to the trade you are considering taking. You may also want to consider looking at equities and commodities markets and without going into greater detail there is much more confirmation but this is a good start and will give you a general feel for where the market is headed.

Rule number four, take your profits. This isn’t always easy to do either. Often times when we see a trade working in our favor we want to believe that price will go farther so we let the trade go far beyond our initial plan and at times a trade can end up turning into a losing one. By taking your profits and following your plan, this will help you prevent a winning trade turning into a losing trade.

If price continues to rally or run to another level, simply watch the trade after you have taken your profits and learn from the activity you see. Try to determine why price that particular time continued much further and if you can move your profit targets to another level. The important key to remember in doing something like this is study and testing.

It is much better for you to analyze the markets while you are comfortably following your trading plan. This is because you will see what is actually taking place in the markets and you will absorb much more information, as opposed to being in a bad trade, breaking your rules and hoping to see what you wish will happen rather than what is actually happening.

My final piece of advice, learn at least two different strategies. One strategy for trading inside of consolidation and scalping profits and another strategy for when price breaks out of consolidation and the markets are trending. This will allow you more opportunities resulting in 100 pips per day or more. Also apply the same techniques to at least two or three major currency pairs. It is possible to create a workspace on your charts to view the time frames necessary on at least three or four pair using one computer screen.

If you would like a picture of my single monitor chart setup to view how I trade multiple currencies with one monitor, please instant message me and I will send you a picture.

Thank you for reading,
good luck,
LC

sorry wrong post

Thank you LC100 for your well thought out compositions.

I especially appreciate your comment about waiting for the candle to close, because I keep guessing it. I'll try to be more patient.