This is useful especially for those who are new to forex trade. I stumbled on to end of day trading on my own and found it to work quite well. Thanks for your quick reply! Thanks for all of the great info! Chris, Been reading this article once again to re-iterate my basics. Thks and God bless u.
20 Pips Daily Candlestick Breakout Forex Strategy-A Solid Trading System To Have The 20 pips daily candlestick breakout forex trading strategy is a price action trading system where you only need to trade once a day using the daily candlestick and your profit target is set at 20 pips.
Peculiarities of the candlestick pattern analysis
Unlike what most traders think, daily time frame is not a long time frame. They think it is a long time frame because they are used to trade the very short time frames like 15min. Making some profit every now and then which is what day traders who trade the shorter time frames do, is very different from being a consistently professional trader. Every day when the daily candlestick is closed and the new one is opened, I refer to the daily chart and check the candlesticks.
I do not spend more than 30 minutes a day to analyze the market. I check the daily time frame of over 15 currency pairs, and usually I am lucky enough to locate some good signals trade setups every week, which is more than enough. Reading the candlestick signals needs a good knowledge and experience, but if you are not that experienced and knowledgeable yet, you can simplify the work and only focus on some special signals that are the strongest. This is what I do too. I look for the strongest signals and ignore the rest.
That is why my success rate is good. Thus, you can be a day trader, but unlike the other day traders who spend several hours in front of the computer every day looking at the 5min or 15min charts, you can spend only 30 minutes on your day trading job.
I do the same when the weekly and monthly candlesticks close and the new ones open. This helps me locate the trade setups on the weekly and monthly time frames too.
Candlestick and Bollinger Bands are all you need to have on your charts. And sometimes a strong candlestick signal on the daily chart indicates that the market will be bullish or bearish at least for the next a few or few days. My target order is usually limited to the next day movement.
This is my style. I know some traders disagree with me, but this method has been working for me for such a long time. The market had been bearish for several consecutive days and a downtrend is formed. Although candlestick 1 has a bullish body, its upper shadow tells me that bears took the control at the end of the day. Therefore, if the market forms a bearish candlestick the next day candlestick 2 , then it confirms that bears will have the control and the downtrend will be continued, or at least the market will be bearish for the next day.
After that, when I see the candlestick 1 and then 2 formed on the chart, I set a sell pending order a few pips below the low price of candlestick 2. The stop loss will be around the candlestick 2 open price and the target will be the same as the stop loss size.
This was the example of the signal that tells me about the next day market direction only. So my target will be limited to next day movement and nothing more than that. Here is another example on the same screenshot below. Candlestick 1 tests the the Bollinger Middle Band on a bear market. Its upper shadow tells me that bears are still strong and will not allow bulls to take the control.
However, I have to wait the for the next day candlestick to form. If the next candlestick forms with a bearish body, it means I was right and bears still have the control and most probably the next day candlestick will also be bearish.
As you see, the next day candlestick 2 closes with a strong bearish body. I set a sell pending order a few pips below the low price of the candlestick 2. The stop loss will be at the middle of the candlestick 2 body because it is a big candlestick with a big body and the target will be the same as the stop loss size. Please look at the the below screenshot. Candlestick 1 and 2 have formed a strong signal that tells me that the market will be bearish at least for the next a few days.
The reason is the candlestick 1 Bollinger Band breakout is strong, and then it is strongly confirmed by candlestick 2. After such a strong breakout that the candlestick 1 formed, candlestick 2 with its strong bearish body tells me that bears will take the price down. So, I set a sell pending order below the low price of candlestick 2. The stop loss will be at the middle of candlestick 2 body because it is a relatively big bearish candlestick , and the target will be x3 of the stop loss size a 30 pips stop loss and 90 pips target.
Candlestick 3 has broken out of the Bollinger Lower Band strongly too, but candlestick 4 is not as strong as I want. So I ignore the signal that candlestick 3 and 4 form. However, candlestick 5 is too strong to be ignored its Bollinger Lower Band breakout, its size and its bullish body.
So I go long. The stop loss will be around the candlestick 5 open price and the target will be x3 of the stop loss. While the market is still bullish, candlestick 6 forms a strong breakout. However, it has to be ignored for two reasons:.
First, the signal that candlestick 5 has formed was TOO strong and it could still move the price up. Second, candlestick 6 has to be confirmed by the next candlestick. Novice traders always ask what time frame is the best to trade. Most platforms support different time frames from 1min to monthly. Even some of them support exotic time frames like 10min or 2hrs.
I recommend you to read it carefully. In this article I am explaining more about my favorite time frames. My goal is to convince you to stop using the short time frames like 1min, 5min, and even 15min and 1hr, because it will result in nothing but loss. It takes 24 hours for each of the candlesticks to form. Therefore, each candlestick is the representative of the past 24 hours movements and events. This is a big advantage because the movements and events of the past 24 hours can have a strong impact on the movements of the next 24 hours at least.
And this is a good opportunity to take positions and make some money. Similarly, a 5min candlestick is the representative of the past 5min movements. And nobody knows what will happen during the next 5min. The patterns, support and resistance lines and levels are less reliable on the shorter time frames.
Therefore, your stop loss will be triggered easier and your success rate will be lower. With the short time frames, you have to deal with more noise and false movements. When 1hr is not reliable, what do you expect from 5min and 15min charts? Day traders have to sit at the computer and gaze at the price charts several hours every day.
They get tired and frustrated, specially when they cannot locate any trade setup, or when they lose in a trade after several hours of monitoring the charts. Sitting at the computer for several hours per day can cause physical problems too. After a while you will experience neck, shoulders and back pains. It affects your vision, and it is possible you experience headaches too.
Then it will become even harder to trade properly and make money. I turn on my PC about 20min to half an hour before the daily candlestick close or a while after that. You know that on most platforms the daily candlesticks are closed at 5pm EST.
As I only look for the strong signals and I ignore the weak ones, I finish my daily job very fast. If I locate any trade setups, I take the position, set the stop loss and target sometimes I set pending orders of course. My daily forex trading job is done within min, and sometimes even sooner.
This is what I do on the weekends to check the last weekly and daily candlesticks. I check the monthly time frame as well when the new monthly candlestick opens. I ignore the other pairs, because many of them move similar to one or a few of the above pairs, and many of them are not reliable.
It will not make more money for you. Some people think that forex is like the other businesses: If you want to make more money, you have to work harder and more. But this is not true about forex and online trading. Working harder and spending several hours at the computer does not mean that you will make more money and you will have a higher success rate.
It can even cause you to lose more. When you are experienced, knowledgeable and wise enough to pick the strongest signals from 20 pairs daily charts, why should you spend more time at the computer? I think I will forget about the daily time frame and will only trade the weekly and monthly time frames when I get older. But I will never think about using the shorter time frames, even 4hrs.
Forex trading is for making money. It is an investment opportunity. This tutorial was very useful. Now I know a bit more about candlesticks! I came from a very lower class family in my country, i have no work or job. Kamel hi, very interesting strategy which I will be looking into over the next month. I presume you have you Bollinger Bands set at 20,2, is this correct? Secondly, what time do you place your trades? Hi Jonathan, I use the default setting for BB.
I check the charts after the daily candle close which is at 5pm EST. If I locate any setups, I place the orders. Do you ever look at Fundamental analysis and base trades off of the news? The news result is reflected on the price charts. The strong setups we see on the charts are created by the news. Kamel, it cant be simpler and easier to understand your way of looking at the chart and trading……awesome…. I like to spend one or two hours after the nyc close i presume that will form and close the daily candle and put pending orders immediately, is it possible?
In other words, what conditions need to be met to place pending orders, looking at the daily candle close? If the pin bar is really long and it forms a strong BB lower band breakout, I will go long.
It depends on the pin bar strength. It has to be really strong to go long without having to a confirmation candle. You can also set pending orders instead of taking the position right away. For example, when there is a long trade setup, you can set a buy stop several pips above the high price of the candle that has formed the long trade setup.
Hi Kamel, I would like to ask you, if you see strong setup for trade, for example BB breakout, you start trade with one position and close it in one day or open more smaller positions and close it step by step? Sometimes you hold positions few days and weeks? Thank you for your answer Great job.
I usually take one position. If the signal is really strong, I close half of it at my first target which is usually the same size as my stop loss. I leave the other half open to make more money. But I rarely do this. Yes, sometimes I hold the positions for several days or even weeks when the trade setup is TOO strong and it indicates a big and strong reversal that moves the price for hundreds of pips. I sometimes trade based on the weekly any monthly charts too. Therefore, I will have to hold the positions sometimes for several weeks.
Yes, it was a bearish signal, but was not confirmed by candle 7. Candle 7 had to be strong bearish candle to confirm candle 6. But it close with a bullish body which mean most probably the up movement would be continued. So no short setup there. The pin break out we are talking about is more dependent on the trend of the bb whether upward or downword and not on the type of the candlestick. The candlestick reversal pattern could be bullish or bearish candlestick with a long upper shadow piercing the upper bb.
My target order is limited to the next day movement…: Usually I will be out the next day. However, when the trade setup is too strong I hold the position for a longer time. Hi Kamel, Thanks for your articles and showing us your trading method.
It is not necessary to tell us the setups Before you enter. Just tell us one time each week what setups you entered during the week?
If you dont have the time for writing too much details, just a few lines is okay and we can try to understand the reasons for entry by ourselves. If you are comfortable with doing this, it would really be too useful for us and future followers of LuckScout. Many of us are learning by looking at examples of real trades, the more the better! If you are not comfortable to do this, then please dont worry, we understand! Ash, you are welcome.
Actually we took a weak position this week and Chris is supposed to write about it. Account size has nothing to do with the time frame. You just need to take smaller positions. You can calculate your position size here: Dear Chris i worked with several demo accounts with several methods.
Hi Majid, They work on all time frames. However, the problem is that the shorter time frames have become unreliable on market. You could trust the one hour chart 5 years ago, but now it works like a 1min chart. So I do not recommend you to use short time frames. Hi Kamel, been reading your entries and like this day system you have going.
It suites me as I work full time and wanted a day type of system to follow and develop that will take me away from the screens. What are the Bollinger Settings you use please? I have read one of the Articles about Scaling up, do you ever use them. It depends on the markets. You never know how many trade setups they form.
Yes, I still check the same pairs. I trade the weekly itself. Yes, the SL will be larger, but the solution is in taking a smaller position. How would you trade if a signal appears when the candle closes on thursday and is confirmed by the friday candle? Would you wait until the monday candle is closed? Or would you just enter your orders as soon as market opens on sunday?
Thanks for your quick reply! I have started using your strategy this week; already showing good results! I have taking some weak setups just to test, which I maybe should not have take as a beginner.. Will demo this till end of this year and try to get comfortable with it. We have already written too many articles about our system. Thank you so much for the clarification of how you trade, simple and precise.
As for the pairs that you trade, you mentioned 15 of them, can you give some clarity into which ones work best for you. What are the time frames for a short position a long position? Thanks I think you guys may have saved me from disaster thanks from the bottom of my heart!
I have a question. You have mentioned above , you use SL and TP both are same size , That mean risk reward ratio should be 1: Thefore do u enough your profit?
Pls answer this matter. Please can you write more about your candlestick strategy? Hi Kamel, nice candlestick strategy, i have a question. Does signal must form and touch moving average one of the candlestick shadow,… or we can also take setup that form a little far of moving average. Jul for example, and would you take 8 Jul setup, i think its valid setup. Have i understood this correctly: In a strong trend, you look for reversal patterns at the middle band, and in a ranging market, you look for reversal patterns at the outer bands?
Doji candlestick pattern or one more Engulfing pattern in the same direction. High of the first Engulfing pattern must not be renewed. We will open a short position at the moment of the next candlestick formation. Stop Loss will be set above the High confirmation signal. The trading strategy uses candlestick patterns with high reliability level and sliding average for the determination of the current trend.
EMA 9 is advised for the popular currency pair trading on M15 timeframe. The entry at the opening of the next candle depends on the market or should be made by a pending Sell Stop order. A good moment for the entry when it comes to candlestick strategy trading in regard to main currency pairs appears within minutes after the European session opening, when the market direction has been determined.
The average duration of the open deal is up to 1 hour. It is not recommended to trade without Stop Loss or enter within first 5 minutes of each hour. The deal should be opened unless: Forex candlesticks analysis comprises of a variety of types, which may involve from 1 to 6 candles. The majority of patterns work more efficiently in the main trend direction, the reversal patterns considered to be weaker.
In intraday trading, the main trend on the greater timeframe should be taken into account. If after receiving of the candlestick signal, the movement in the market does not confirm it, then the trend will probably flow in the opposite direction. The principles of the capital management are mutual for any forex candlestick trading strategies. Neither forex candlestick pattern can be a trade signal itself, nor can it be used for indicating of the possible entries.
The pattern just shows the expectations in the market and signalizes the possible changes. For seeking of the entry, another methods of analysis rather than Japanese candlesticks should be used.
1. The Pin Bar and Its Ability to Signal Turning Points
Use end of day trading strategies to fit trading into your daily routine. End of day trading is a forex strategy that is very stress free and practical. Submit by JanusTrader Trade Entry Rules - All Using Closed Daily Candles: • A correct candle (Bull candle for a potential Buy, Bear candle for a potential Sell has closed over the Kijun-Sen and over the correct 25,1 Envelope outer by at least 10 pips net of spread. • The , PSAR is below the price action for a Buy, above for a Sell AND. Apr 09, · For this strategy you don't have to depend on the candle or the chart. For the Daily trade, choose one convenient time of the day when you can regularly attend to the trade. At this given time open a position in any direction.