Forex | FX Operator | Currency Trading

This is my Setup for the 30min charts 

• We want to find the best EMA that could be a good SR of the price during trend and I find that EMA55 Close is the best line to represent the 30 min charts
• Since this a trend system, the rule is simple. You can trade against the trend but NEVER lose sight of it. To establish this, we already have the 55EMA Close in place which will determine the position that we will take. I will add a 60EMA Open to magnify the setup. So Rule2 now states that trade should be long as long as 55EMA is above 60EMA.
• Momentum is also important for me coz I cant catch a budding trend at all times and I want to also catch trend corrections to get on the short side of the trade, therefore, I will add an RSI(7) to gauge price action.
• On steep trends, 55EMA seems to lag and will not allow me to get good entry positions, I usually add a 21EMA Median to visualise quick scalp entries.
• Last but not least, PROFIT TAKING LEVELS, I would recommend using Envelopes of 55EMA at 0.21, 0.34, 0.55 and 0.89. Usually 0.55 would indicate extreme levels but there are times when price does push thru to 0.89 level especially during big news events.  Now that we have established the rules, let’s visualise how our charts are supposed to look like:
  
   
  Fig 1

I still use this system up till today but on a longer timeframe now, for my swing trades. I believe just by looking at the chart, one could probably determine how the system works.  

How to trade the SpeedFX

• Understanding Trend Strength
  A Trend is especially strong when they bounce off the 21EMA (Fig 2, B). Take the trades when price indicates so.
  
  When prices start cutting past the 21EMA, there will be 2 implications:
    i. Market entering consolidation mode before moving again (Fig 2, A)
    ii. Trend is exhausting and will change.
  
  I will usually take the first point as the default, I will only prepare for short setups when price starts to test 55EMA and cut it a few times. But as long as 55EMA is above 60EMA, I will always put more weight on long entries.
  
   
  Fig 2

Taking trades - How do we pull the trigger?          

Before I begin this, I would advise all traders who have not been inducted to HeikinAshi to vist FXtrader’s post on how to use HeikinAshi Candlesticks. 

 I will mix price action and also candlestick patterns esp the Doji when I take the trades. Remember I have a lot of trend indicators in this system, EMAs, Envelopes and Even the HA Bars! So if all is pointing up including the momentum, then please pull the trigger.

On using the RSI : Never take oversold or overbought signals. I usually just look dore price and indicator divergence that’s all.

Examples                                                                

• 3 Red Bars / 3 Green Bars
  
   
  
  
• Singe long candle with no shadows
  
   
  
  
• Doji, buy on second bar confirmation
  
   
  
  
• RSI divergence: I don’t take RSI divergence for short setups but as a first level indication that trend is coming to a consolidation phase. I always keep this notion in mind. Trend will change when it changes, just follow it.
  
   
  


Taking Profits  - Envelopes of Wealth
• Now this is where we will use the envelopes as our profit taking points
• The standard contract that I will trade is usually 2 contracts and this will fit perfectly to my trading criterions.
• Trading off 21EMA Bounce.
    - Take 1 lot of your profit at 0.34 and set trail stop to 10pips.
• Trading off 55EMA Bounce
    - Take 1 lot of your profit at 0.21 and set trail stop to 10 pips.
  
  









Setting Stops
Most of the time my stops will be place below  the low of the bounce

 

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