Category: 3. Advance Strategies

It’s harder than it looks to keep emotions at bay when you’re five coffees in and you’ve been staring at the screen for hours. You need to let maths, logic and your strategy guide you, not nerves, fear, or greed.

Understanding market intricacies isn’t enough, you also need to stay informed. Make sure you stay up to date with market news and any events that will impact your asset, such as a shift in economic policy. You can find a wealth of online financial and business resources that will keep you in the know.

Whilst you’re finding your feet, stick to a maximum of three stocks during a single day. It’s better to get really good at a few than to be average and making no money on loads.

Don’t expect to make a fortune if you only allocate an hour or two a day to trading. You need to constantly monitor the markets and be on the lookout for trade opportunities

Before you start, sit down and decide how much you’re willing to risk. Bear in mind most successful traders won’t put more than 2% of their capital on the line per trade. You have to prepare yourself for some losses if you want to be around when the wins start rolling in.

The Drop ‘n’ Stop Trade is the reverse of the Pop ‘n’ Stop trade. It’s applied when the price breaks below a range, in what is referred to as a bearish breakout.What is the Drop ‘n’ Stop trading strategy?

The Drop ‘n’ Stop takes place when the price breaks below its range, followed by a brief pause with little price action, and then it moves in a clear direction usually downwards. It’s absolutely necessary for traders to act fast, but you can choose to wait for the bearish rejection bar that confirms the signal.

The Pop ‘n’ Stop Trade allows you to take advantage of a sudden price breakout from a tight range. There is the danger of missing the breakout and entering the trade too late. The price breakout may be prompted by a news release, rising volumes, or at the opening of the market.What is the Pop ‘n’ Stop trading strategy?

With the Pop ‘n’ Stop strategy, you look for the price breaking above its price range by a big margin, “popping out.” It is followed by a small stop and then a stronger uptrend may continue. “It pops then stops.” After the brief pause, it is not guaranteed that the price will keep rising, so it’s vital that you look out for other signals that confirm the bearish trend. Also, watch out for rejection bar candle patterns like a pin bar formation. You place tight limit orders and profit take levels, as it’s easy for the price level to get exhausted quickly.

This strategy is mostly applied to trading the major currency pairs but can be applied to other assets. Its purpose is to reveal when the trend is most likely to reverse. With the early tip-off, you prepare to change your position.What is the Forex Dual Stochastic Trade?

This strategy is mostly applied to hourly charts, but will also work with daily charts. All you need to do is configure one fast stochastic oscillator and a slower stochastic oscillator. Then, you compare the two stochastics and enter into positions when one chart is showing an overbought market (over 80) while the other shows an oversold market (under 20). This signals that a reversal may be coming up. It’s important to use the strategy in conjunction with other technical indicators.

You use fractals to identify a reversal and confirm its existence in very volatile or chaotic markets. Fractals appear at swing highs or swing lows.What is the Forex Fractal trading strategy?

The fractal pattern consists of a middle candlestick or bar that is surrounded by two other candles. If it’s a bearish fractal, the middle candle is the highest high and it’s flanked by two lower high points. Think of it like one high mountain with two smaller hills on its side that are higher than all other hills in the surrounding area.

For a bullish fractal, the middle candle is the lowest low and this forms a trough as it’s flanked by two higher low points. You can use the ‘Alligator indicator’ alongside fractals to confirm the existence of a reversal.

This is quite simple to execute, as it revolves around volatile price movements during the open of the London market or as it draws to a close. The market volatility increases based on more traders becoming active. Many traders use it whilst trading the gold market.What is the London Hammer trading strategy?

When the London market opens, you start looking for a hammer. It’s a Japanese candlestick pattern characterised by a long lower wick (twice the length of the body), short real body, and little or no upper wick. That’s because sellers drove the prices lower during the first half of the duration, only for buyers to reject the low prices driving the price past the open by only a small margin. It might reflect how the market will behave in a given day. You have a stronger signal by combining it with support and resistance.