Strategy Videos - Introduction
Welcome to my strategy overview page.
On this page I have one objective, which is to show you some simple strategies that you can use to increase your Forex profits. All of the strategies I share with you here are in current use by active proprietary Forex traders working in multi-national banks.
One of the overriding problems I see with regard to people attempting to take money out of the Forex markets is that in their search for success, they over complicate things. They imagine that in order to be successful, a solution has to be found which is extremely complex.
This is not the reality of how things work, please remember that there are hundreds if not thousands of ways to make money in the Forex markets and to obtain an edge. Over complication is one of the principle reasons for failure, once you realize this and start looking for opportunities which are simple to implement and simple to understand then you’ll be astonished to see how quickly you can become profitable.
It is for this reason that I have created this page and to present some profitable yet easy to understand and execute strategies.
Take a look at the videos and if you like them , please do leave me some feedback, so that others can also enjoy them.
AVERAGE TRUE RANGE
The first strategy I would like to share with concerns using the ATR (Average True Range)
Without going into the full detail of defining what the ATR is, traders should understand that an ATR represents the average daily high to low swing of an individual currency pair.
For example, if the lowest price of the EURO/USD on a particular day is 1.10 and the highest price on the same day is 1.11, then the range for that day is 1 cent or 100 pips.
If you collect and plot data everyday using the above method, an ATR can be calculated by applying a moving average to those prices. A typical moving average will be a value of 14.
As people who have read my blog and website for any length of time will know, I don’t like lagging indicators. What I do use however, are tools like ATR which although they are based on figures to which we apply a moving average, they are important to me because I don’t use them as the only evidence of wanting to get into or out or trade.
Typically the ATR for a currency pair expands and contracts over time, that is to say that the figure could for the EURO/USD be on average around 80 pips for a certain period and then might expand to say 110 pips or even contract to 50 pips.
If you look at any daily chart you will see, simply by eyeballing it, that there are periods of higher daily volatility, at certain periods of the year when compared to others. This is a normal phenomenon and perfectly acceptable.
By applying an ATR to your charts you will be see the evidence of such fluctuation in volatility and hence ATR before your very eyes.
Here’s how the method works.
Having a value of the current ATR available to us, this method looks to find a turning point in the market which we can catch and profit from. The premise being that once the market has made its run for the day and extended to the typical ATR for the period concerned then we can look for a reversal.
Rather than blindly reversing into a market, just because it has made a move of a certain number of pips, which is a route to the poor house, we need to look for second and third confirmation parameters in order to confirm the ATR.
The two extra confirmation parameters we need are a support and resistance point and we need the right price action.
In the video below, you will see an example of this method and how I play it.
More Training and Resources
If you are really serious about becoming a better Forex trader then please think about my Forex Price Action course which includes everything you need to be able to understand Forex Price Action Trading. Once you have completed the course then you'll be ready for the 'Forex Bail In' method which I have developed for risk averse traders, who like the EUR/USD and GBP/USD markets.