In this episode of Truth About FX, Walter talks about taking market signals, patterns, and the two important scenarios that you should examine when considering if you should or should not call it a day. Walter also shares a good spot in determining a “range-bound market” versus a trending market and the different candle behaviors for each one.

Hugh also shares his approach of pulling different methods into his platform.

Download (Duration: 6:00 / 6.87 MB)

In This Episode:

00:54 – gangbuster trades

01:35 – Acapulco System

02:44 – a subtle difference

04:12 – momentum-based system

05:26 – ATR exit

Tweetables:

Wait for the pullback or wait for the market to go even farther. [Click To Tweet].

If the market has been on strong trend, take the trade.  [Click To Tweet].

You can have this really tight stop loss on your trade. [Click To Tweet].

Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.

Hugh: Hi, Walter! What happens if the markets has already moved the average range of the day and you just took a signal? Do you ignore it?

Walter: This is an interesting point. Basically, it depends on what the chart looks like. I am a technical trader so I do not really pay attention to news. In fact, as I was recording this, Hugh, there was some massive moves on the GBP.

So, I got a GBP/JPY trade and a GBP/NZD trade and I am thinking about a GBP/AUD trade. My GBP/NZD and GBP/JPY and I have a GBP/CAD trade, too. All my GBP trades are like going gangbusters, right?

I know there is some news that happened last night or whatever that probably feed it and everyone is talking about it but I didn’t actually know what it is. I do not even care. I haven’t logged into FXStreet.com to see what is going on or whatever.

I have no idea. Someone could’ve been assassinated or kicked out of office or… You know what I mean? Somebody took over the Bank of England. I do not know, I have no idea.

All I am saying is that I based it on the charts. To answer your question, if the market is in like a runaway trend and it’s broken through… Let’s say, the market has fallen through a really critical support level, for one of my assistant has called the “Acapulco System” which is, basically, a breakout trade.

It breaks out through a support and resistance level. If I see something like that and it’s already moved the range of the day, I might still place my order in to take a trade.

It may not necessarily get triggered today, it might be triggered tomorrow. It’s because the candles are starting to accelerate and look really big that I sort of throw the ATR out the window.

Remember that ATR, at least the way that I look at which isn’t very often but if I do look at the ATR, it is a ten-day ATR. Those small candles that were printing last week, going to the calculation of that ATR, it’s not really that important.

The last two candles, for example,