Commodity Channel Index - CCI
tag Tags : Forex Chart CCI Commodity channel index
Tuesday, May 12, 2009
Forex Tips Strategy.
What do you need:
1. one hour or 30 minutes timeframe
2. 18-period EMA and 29-period EMA (draw them using red)
3. 5-period WMA and 12-period WMA (draw them using yellow)
18 and 29-period EMA are two red lines which form a tunnel, this helps you to predict the trend. 5 and 12-period WMA shows you when to enter the trend, and how strong the trend is on a short term.
When the red tunnel is narrow, or thew two lines form only one line, you should open a position according to the following rules:
1. Go long when the 5 and 12-period WMA are crossed, the red tunnel is up.
2. Go short when the 5 and 12-period WMA are crossed, the red tunnel is down.
Close your positions according to the following rules:
1. The price reached the high, and 5-period WMA goes under 12-period WMA. Close all your long positions.
2. The price reached the bottom, and 5-period WMA goes beyond 12-period WMA. Close all your short positions.
When the red tunnel is crossed, close all your positions, because a trend reversal is about to come.
1. one hour or 30 minutes timeframe
2. 18-period EMA and 29-period EMA (draw them using red)
3. 5-period WMA and 12-period WMA (draw them using yellow)
18 and 29-period EMA are two red lines which form a tunnel, this helps you to predict the trend. 5 and 12-period WMA shows you when to enter the trend, and how strong the trend is on a short term.
When the red tunnel is narrow, or thew two lines form only one line, you should open a position according to the following rules:
1. Go long when the 5 and 12-period WMA are crossed, the red tunnel is up.
2. Go short when the 5 and 12-period WMA are crossed, the red tunnel is down.
Close your positions according to the following rules:
1. The price reached the high, and 5-period WMA goes under 12-period WMA. Close all your long positions.
2. The price reached the bottom, and 5-period WMA goes beyond 12-period WMA. Close all your short positions.
When the red tunnel is crossed, close all your positions, because a trend reversal is about to come.
Forex Trading Strategy
Basically, getting into a market either long or short is based on the combined use of the daily trend line and the obtained forex killer signal. It's a basic swing strategy to exploit the current trend and further price breakout.
1) First, check the moving average of closing prices of all major currency pairs on a daily chart (i.e. by using 5, 10 or 20 Simple Moving Average trend lines), to find out the price is either trending up or down for the USD dollar.
2) Obtain price correlation among all major currency pairs to determine an overall bias to either go long or short on the USD dollar on the day. This is the first condition filter.
3) Then, generate forex killer signals for all major pairs using shorter time periods (e.g. H1, M30 or M15).
4) When the forex killer signals are in line with the daily trend bias, enter the market long or short accordingly depending on the currency pair you choose to trade.
5) Stops must be in place whenever a condition disappears. You may follow the stop levels as suggested by the forex killer software, or you can choose to optimise your own risk reward ratio.
6) This strategy produces some good results with 30 minutes and 1 hour closing prices, and with 40-60 pips return for a position.
In summary, this simple strategy allows you to see the market better as a whole and pay less attention to the out-of-sync currency pairs. I would recommend you to check out and familiarise with the forex killer signal software, and use it as an analytical tool to assist trading and improve winning chances.
1) First, check the moving average of closing prices of all major currency pairs on a daily chart (i.e. by using 5, 10 or 20 Simple Moving Average trend lines), to find out the price is either trending up or down for the USD dollar.
2) Obtain price correlation among all major currency pairs to determine an overall bias to either go long or short on the USD dollar on the day. This is the first condition filter.
3) Then, generate forex killer signals for all major pairs using shorter time periods (e.g. H1, M30 or M15).
4) When the forex killer signals are in line with the daily trend bias, enter the market long or short accordingly depending on the currency pair you choose to trade.
5) Stops must be in place whenever a condition disappears. You may follow the stop levels as suggested by the forex killer software, or you can choose to optimise your own risk reward ratio.
6) This strategy produces some good results with 30 minutes and 1 hour closing prices, and with 40-60 pips return for a position.
In summary, this simple strategy allows you to see the market better as a whole and pay less attention to the out-of-sync currency pairs. I would recommend you to check out and familiarise with the forex killer signal software, and use it as an analytical tool to assist trading and improve winning chances.
FOREX Indicator – Williams %R Oscillator
Overbought market conditions are found at the upper band (readings from 0 to -20) and oversold conditions at the lower band (readings from -80 to -100).
Interpretation
The interpretation is similar to the Stochastic Oscillator, except that Williams %R ranging scale is plotted using negative values from 0 to -100.
0 to -20 readings are considered overbought; -80 to -100 readings are considered oversold.
Formula
%R= -100x[(Highest High - Current Close)/( Highest High - Lowest Low)]
Popular trading signals from Williams%R
I. In trending markets
Take only signals from Williams%R in the main direction of the trend. If the main trend is up, take only oversold signals from Williams%R. Conversely, if the main trend is down, take only overbought signals from Williams%R
Some currency traders identify the currency pair's long-term trend and then use extreme readings for entry points. If the mid long-term trend is bearish for a currency pair, then overbought readings could mark potential entry points to go SHORT (again).
II. In ranging markets
Go long when Williams %R falls below the oversold level and rises back above
Go short when Williams %R rises above the overbought level and falls back below.
It is recommended to use Williams%R in conjunction with other technical analysis tools to make a complete forex trading system
Interpretation
The interpretation is similar to the Stochastic Oscillator, except that Williams %R ranging scale is plotted using negative values from 0 to -100.
0 to -20 readings are considered overbought; -80 to -100 readings are considered oversold.
Formula
%R= -100x[(Highest High - Current Close)/( Highest High - Lowest Low)]
Popular trading signals from Williams%R
I. In trending markets
Take only signals from Williams%R in the main direction of the trend. If the main trend is up, take only oversold signals from Williams%R. Conversely, if the main trend is down, take only overbought signals from Williams%R
Some currency traders identify the currency pair's long-term trend and then use extreme readings for entry points. If the mid long-term trend is bearish for a currency pair, then overbought readings could mark potential entry points to go SHORT (again).
II. In ranging markets
Go long when Williams %R falls below the oversold level and rises back above
Go short when Williams %R rises above the overbought level and falls back below.
It is recommended to use Williams%R in conjunction with other technical analysis tools to make a complete forex trading system
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