I am a swing trader and I take advantage of major moves in the market and generally follow where the trend goes. I only take good quality set ups which means if the set up does not satisfy all my criteria, I happily see it off even when it turns out that I was right in the first place. Taking good quality AAA set ups is a sign of a consistently profitable trader.
I would like to share one of the Trend Trading Strategies that I personally use to profit from the financial markets. I wouldn't get into the technical aspect of each tool I use, but will dive straight into how I use these tools to trade.
Let's get going! Here are the indicators, timeframes, technical analysis platform and market structures I look for when I trade using this strategy.
I use TradingView to analyze my charts. I use this to look at different instruments (Forex, Commodities, Indices, Stocks, Cyrptocurrencies and more.
The main indicators I use are as follows:
Heiken Ashi candles for the Daily timeframe. Traditional Japanese candlesticks for H4 timeframe.
200 EMA (default) for both H4 and Daily timeframes
VuManChu Swingfree indicator by Jazal
Wavetrend Cross Lazy Bear by lonestar108
Only take Long when the price is above the 200 EMA in both H4 and Daily timeframe
Check market structure using Daily timeframe (Heiken Ashi candles). Look for trending structures. Two higher highs / two higher lows for Long set ups. Two lower highs / two lower lows for Short set ups.
Wait for the VuManChu indicator in H4 to give a BUY or SELL signal. Enter Long when price makes a higher low in Daily timeframe. Enter a Short when price makes a higher low in Daily timeframe.
Look at the Wavetrend indicator for added confirmation. Gold cross below the zero line for Long. Death cross above the zero line for Short.
Place Stop Loss using the previous swing high or swing low.
I generally enter two positions. 1% for each position (total of 2% for the entire trade)
Take Profit 1 - 1:1 RR
Take Profit 2 - 1:2 RR or trail profit continuously (Or until the next opposite BUY/SELL signal appears on VuManChu in H4)
As soon as Take Profit 1 is booked, move the Stop Loss to Break Even
Let the market do its job until it hits Take Profit 2. Another technique is to trail the profit by moving the stop loss after every pullback based on the H4 timeframe.
It is important to do your own back testing to figure out the best timeframe appropriate for your trading style. This can be traded using lower timeframe with a combination of H4-H1 or H1-M15. Do remember as you go down the timeframes, the more noise and false signals appear as well.
Higher Timeframe Trading
You will definitely get lesser opportunities to trade using the higher timeframes. You would have to make a decision between trading more often or trading less with a much higher percentage of winning. Higher timeframes are also immune to the effects of fundamental news and you wouldn't be required to sit in front of your charts all day long, rather just need to occasionally check your charts 2 to 3 times a day.
Ultimately, it is your decision how you would want to trade this strategy. I hope you find this useful and bring you lots of profits in the markets.
This article does not constitute financial advice. Trading has risks involved. Only trade with money that you are willing to lose.