Hello dear friends!
Hope everyone is feeling good. To make this technique more easy to learn I decided to split it into two parts. We discussed previously in the article “Elmar’s Technical Approach towards the Forex Market Part 1” the method I use to trade using Exponential Envelopes 21 periods and an Exponential Moving Average 21 periods.
Now I will like to complete the series of articles with “Elmar Technical Approach towards the Forex Market Part 2” where we can use the moving average in the middle of the envelopes to
a) Reload the trade already taken
b) Enter a lost trade already in motion
Again I will advise you to not start trading real money on it but to practice on a demo account for some months. After feeling comfortable with the technique and should you decide to start trading live, do so with small amounts of your portfolio and increase it slowly until you reach at maximum 3% of your total capital on a single trade. Never ever risk more than this. I am practicing this forex system on my real retail trading account with relative success.
As described in “Elmar’s Technical Approach towards the Forex Market Part 1”, I use the Weekly and Daily chart together with:
– Ema Envelope 21 Periods – (Behaves similarly to Ema but with an upper and a lower band)
– Ema 21 Periods
– Stochastic 9 6 6 – (I don’t use it on the chart always. I use it eventually just to track down a divergence or convergence.)
Reload a Trade Already Taken or Entering a Lost trade Already in Motion
For this second part of our technique, I will like to use the NZD/USD that has a pretty perfect pattern to teach us what we can do. Once you have a good and profitable trade set, like you can see in the NZD/USD chart attached, you can chose to reload if possible the trade based on the moving average in the middle of the envelopes. Take a look at the chart now. The black arrows show good trading possibilities that were explained in the “Elmar’s Technical Approach towards the Forex Market Part 1” article. Now give attention to 05 august “Buy Opportunity “A”. Once you bought this trade around 0.7770, three days ahead you can notice that 21 Ema was taken and price jumped above it the next two days. The next three subsequent days a small bearish correction left a doji right above the 21 Ema like you can see inside the circle drawn in the chart. Now is the time that you can reload your trade. Note that 21Ema is slightly bullish and rising, reinforcing the doji and giving us the perfect place to reload the already taken trade in 05 august “Buy Opportunity “A”.
But in other hand, if you lost the 05 august “Buy Opportunity “A” entry point, you can use the same place that you would use to reload a trade, to enter the trade and take at least half of the 05 august “Buy Opportunity “A” possibility. By now, you have Entered a Lost trade Already in Motion.
A couple days ahead you can see another good opportunity in 01 Sep on Buy Opportunity “B”. The black arrow Buy Opportunity “B” shows the entry point to a good trade and then four days ahead a price breach up the moving average. In the next day 21 Ema is turning bullish again. A daily candlestick closes above it and the buy signal was given. Reload a Trade Already Taken or Enter a Lost trade Already in Motion. Now search this pattern described here in other forex instruments. I am sure you will find good ones! It may be bullish or bearish as long as it obeys the rules that I wrote here and in the “Elmar Technical Approach towards the Forex Market Part 1”.
Caution: Until you master this technique, use demo accounts. It will help you find out the power and the weakness of this strategy before you trade real money. You can use this technique in any forex instrument you desire but only do this in the daily timeframe. Wait for the close of the candlestick before executing the trade! You will see that many times the chart may mislead you. Hence we must be prudent and patient to wait for the proper closure of the candlestick to trade. Use proper money management and hence never ever use more than 3 % of your account in a single trade. Only open a second trade if the first show profit of at least 1x your initial risk. Sundays and Mondays hardly gave me profit! Hence it may be better to stay on the trading sidelines and observe the true nature of the markets on these days instead.
I hope you like it and enjoy the trading. Thank you folks and nice week ahead!