Swing Trading Strategy - 19% Return, 5 Trades, 1 Month

Discussion in 'Trading Systems and Strategies' started by DRFXTRADING12, Nov 29, 2015.

  1. DRFXTRADING12

    DRFXTRADING12 Active Trader

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    Hey all,

    November was the first month of testing additional Swing Trading Strategies that are the more aggressive versions of the current Methodology I now use/shown in this thread. Combined, the trades made provided a Return of 19% from just 5 trades with most coming from Consolidation Setups. All follow a certain set of rules based on the setup seen and were not random trades made.



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    TRADING STRATEGIES



    These strategies target 150 Pips per trade on average (100 to 200 Pips) as they take advantage of Weekly Range movements across the currency market each week. On average, there are 8 of these moves that take place every month. So if you aimed to capture just 2 of these each week, you will be able to generate Large Rates of Return on your Account each month.


    STRATEGY 1 - Trading Strong Consolidation Breakouts and Trends

    STRATEGY 2 - Trading Slow Consolidation Breakouts

    STRATEGY 3 - Trading Within Consolidations Using Daily Chart Signals

    STRATEGY 4 - Trading Within Consolidations Using only Support & Resistance for Entry

    STRATEGY 5 - Trading Within Consolidations Using 4 Hour Signals



    TRADE 1 - GBP CAD - STRATEGY 4



    This pair began to move sideways for a few days and eventually formed a small Range Setup on the 4 Hour Chart

    On November 2, having determined that the setup and signals on the Daily and 4 Hour Charts were in sync with the criteria for this strategy, a short position was opened just below Resistance.

    The target was set to the Support boundary for a planned gain of 120 Pips but was exited for a gain of 102 Pips as the market had not yet hit that target by the end of the established holding period.


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    As can be seen in the Video, the decision to exit instead holding out for the extra 20 Pips was the correct one.




    With this Swing Trading Methodology, you have to obey the rules related to the length of time that we remain in a trade. This helps to keep your trading objective so that your temptation to capture additional Pips does not compromise your success and long-term profitability.
     
  2. DRFXTRADING12

    DRFXTRADING12 Active Trader

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    TRADE 2 - USD CHF CONSOLIDATION BREAKOUT - STRATEGY 1


    This trade attempted to take advantage of the breakout from a large Consolidation Pennant Setup on the Daily Chart on November 17.

    The breakout took place at the Resistance boundary and was expected to continue higher as the Uptrend became stronger.



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    However, the trade was exited for a small loss of 35 Pips when it was realized that an important target on the 4 Hour Chart was overlooked.


    The target for this trade was set to the Breakout Equivalent of the Range Setup that started the overall breakout. This B.E. area was at the 1,0350 area and would have provided a gain of 190 Pips. The Breakout Equivalent is the area I have identified as where breakouts from Consolidations head to before pulling back. This helps in eliminating the uncertainty of where to exit our trades during the fast but tricky moves.


    However, it was later realized that the Breakout Equivalent of the 4 Hour Chart’s Range was at the 1,0200 area and would have led to a pullback - customary at these areas - before that 1,0350 target was reached.

    Despite the fact that the market was expected to continue higher after this pullback, it was uncertain whether or not it would now do so within the holding period and without taking out the Stop Loss. This led to the reluctant but necessary decision to exit for the small loss.


    Mistakes and oversights like these take place from time to time and are par for the course. The key is to ensure that they are not repeated and that we meticulously analyze all aspects of the time frames before trading.
     
  3. DRFXTRADING12

    DRFXTRADING12 Active Trader

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    TRADE 3 - AUD USD - TRADING WITHIN CONSOLIDATION USING DAILY CHART SIGNALS


    In this trade on November 19, the Daily Chart had provided us with a strong bullish ABC Signal above the Support of the Pennant to start heading back to Resistance at 0,7310.

    Based on the characteristics of this setup, the Daily Chart was needed to give us the signal to trade instead of the 4 Hour Chart or entering at the Support boundary.




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    (FXCM Charts are used to provide Chart Signals based on the New York Close of the Daily Candle)




    ABC signals are among those that lead to very fast breakouts across the currency market. Once spotted and traded, these signals tend to provide hundreds of Pips in gains within a very short period of time.




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    Given this strong ABC Signal, therefore, this trade was expected to hit the target unhindered. However, by the end of the holding period, the trade had to be closed as the pair began to stall at one of the Downtrend Line that has defined the bearish direction of this pair.


    Usually these trend lines are ignored once the pair is headed to the other side of a Consolidation but this was one of those instances in which they held firm




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    This trade was another example of the importance of closing trades early once the holding period has expired. A small gain of 23 Pips is always better than a loss and as you can see from the pullback that has started, this is what is likely to have taken place in the days ahead.
     
  4. DRFXTRADING12

    DRFXTRADING12 Active Trader

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    TRADE 4 - EURO JPY CONSOLIDATION BREAKOUT STRATEGY 1


    On November 20, a strong signal was given on the Daily Chart to start a sharp breakout from the Pennant Setup.

    This was expected to provide sharp gains in favour of the Japanese Yen heading into December as the Euro continued to lose ground across the Forex.

    The initial break of Support was followed by a brief period of sideways movement that formed a small Pennant Setup. This was a way of 'testing' the boundary before continuing the breakout with the bearish signal.




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    A target of 172 Pips was set at the Breakout Equivalent of this smaller Pennant but due to the lack of market activity during this holiday period, the trade was only up by 47 Pips - smaller than expected but a win nevertheless.






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    In situations such as this, re-entry is possible once liquidity returns to the market and the signal is strong enough to justify trading it to the original target.
     
  5. DRFXTRADING12

    DRFXTRADING12 Active Trader

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    TRADE 5 - CHF JPY - SLOW BREAKOUT - STRATEGY 2


    This new trading strategy takes advantage of breakouts that would have otherwise have been ignored given the small nature of the candles that often lead to unexpected reversals. However, it has been now been realized that these can be very profitable once we are able to distinguish between those that lead to these reversals and those that successfully hit their targets.

    On November 21, this pair provided such an opportunity with a signal to indicate the resumption of the breakout that started back in October. The expected breakout was in keeping with the new Downtrend that was formed as the pair continued to break farther below the major Uptrend Line in place since 2012.



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    This was another example of the market pulling back to 'test' the broken boundary before U-Turning to resume the breakout. It is one of the three common ways in which the market can start breaks from these setups (3).





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    The target of 172 Pips was set to coincide with the Breakout Equivalent of this Pennant but at the end of the holding period, the market had come very close to the Limit Order before pulling back to close the last day at 101 Pips.





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    The candles that continued the breakout were small as expected but they still moved by over 100 Pips to confirm that these would be the ones that offered profitability. Once again, this was a trade that had to be closed early in order to comply with the very important holding period rule that is essential for trading success. This helps to control our ego and our greed that can get in the way of profitability.



    Another important feature of this trade was that this overall setup and breakout was forecast several weeks ago in September using the tools of Candlestick Patterns in the Manual. As you will see from the video below, the formation of this Pennant and the breakout were expected based on several key Technical Factors that control the movements on the Forex Market.








    With this Methodology, you can not only predict major market patterns ahead of other traders, but also confidently trade them when the right setup is eventually provided.


    Duane
    DRFXSWINGTRADING
     
  6. DRFXTRADING12

    DRFXTRADING12 Active Trader

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    Hey all,

    These last 2 trades made on the CHF JPY and EURO JPY highlight the need to have a Holding Period and obey it. Also shows that the ones I use were spot on in avoiding these reversals...these very sharp reversals...


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    As you can see, this made a big difference.

    Even though the initial targets were 180 Pips and 172 Pips, respectively, always have to put extra profitability aside in favour of obeying the rules of the strategy..

    ALWAYS

    What holding periods do you use for your Trades?

    Duane
    DRFXSWINGTRADING
     
  7. DRFXTRADING12

    DRFXTRADING12 Active Trader

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    Another important factor with the CHF JPY trade was that the exit point also coincided with where the Support of a Large Pennant seems to be forming.

    What may have looked like a simple trend change on the 30 Minute Chart...


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    ...was actually the formation of Support of a Consolidation on the Daily Chart...



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    This is based on certain Candlestick Patterns that tend to indicate when these setups are being formed...


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    So knowledge of these patterns and the expected Support would also have led many to stop trading short in anticipation of this rally.

    Another good reason its important to focus on the Larger Time Frames.

    Anybody else saw this?
     
  8. DRFXTRADING12

    DRFXTRADING12 Active Trader

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    Recent Trade - GBP CAD 140 Pips



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    (Dukascopy - where I have my Live Account used for Trade Execution)

    This was based on the theory of False Breakouts where an initial breakout at one end is followed by a reversal signal that takes us to the other end...



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    This was the setup on the GBPCAD Daily Chart below


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    (FXCM Charts for Signals based on the New York Close of Daily Candle)




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    Duane
    DRFXSWINGTRADING
     
  9. DRFXTRADING12

    DRFXTRADING12 Active Trader

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    GBP USD 138 PIPS TRADE


    Hey all,


    Latest trade took place on the GBP USD.



    Daily Chart gave us another signal which was traded in sync with trading Rules & Strategy.


    This is the chart setup...

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    (FXCM Uses the New York Close of the Daily Candle which used for Entry Signals - crucial for my Price Action Strategy)


    ...and the Video Analysis before the trade...





    After a few days, market went to the target...


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    (Actual trades take place on my Dukascopy Platform)


    Overall since starting new strategies in November...

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    (Assuming a Leverage of 100:1, Risk of 10% Per Trade)


    KEY TECHNICAL FACTORS


    1- Consolidation Breakouts

    2- Daily Chart Entry Signals

    3- Entry using 4 Hour Chart Setups

    4- Breakout Equivalent (Targets for Consol. Breakouts)

    5- Patience & Persistence after losses.


    Duane
    DRFXSWINGTRADING
     
  10. DRFXTRADING12

    DRFXTRADING12 Active Trader

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    This is the system that will now track these Strategies. It will show that, with only a few trades, a Large Rate of Return is possible from Swing Trading and this Methodology.


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  11. DRFXTRADING12

    DRFXTRADING12 Active Trader

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    UPDATE OF SYSTEM

    This system has now provided a Return of 32% in the last 2 Months.


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    The last 2 trades came from the EURO USD (149 Pips) and the AUD CHF (108 Pips)



    EURO USD DAILY CHART

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    AUD CHF DAILY CHART

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    The EURO trade took advantage of the movement to Support of the Large Consolidation on its Daily Chart.




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    AUD CHF trade was similar. This one was a movement towards the Resistance of the Large Pennant Daily Chart.


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    MAIN HIGHLIGHTS OF TRADE

    - Targeting between 100 and 200 Pips Per Trade as Stated in my Methodology

    - Using the more reliable signals of the Daily & 4 Hour Charts

    - Using Strong Stop Loss Areas of the 4 H Chart

    - Patiently waiting until targets are hit.

    These trades are further evidence of why Swing Trading, Candlestick Signals and the higher time frames are much better at providing consistent gains than Day Trading.


    Duane
    DRFXSWINGTRADING
     
  12. radex78

    radex78 Active Trader

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    Just want to get nptification thread, I like swing trading strategy and want to learn how to tarde with tihs way, maybe will giving better result ahead
     
  13. DRFXTRADING12

    DRFXTRADING12 Active Trader

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    GBP CAD 175 PIP TRADE RESULT

    Hey all, how goes it?

    Took a little break to fine tune my Methodology, now back with you.


    The latest trade provided a 175 Pip gain on the GBP CAD as part of the recent decline. This was taking place within a Range Setup that was being formed on the Daily Chart.


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    A pair of Double Tops and a break of the Uptrend Line were the signals indicating the start of the Bearish Move. I then waited until the 4H Chart provided a Setup & Signal to take advantage of the expected downtrend.


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    Since these were deemed strong enough, I decided to trade it. I placed my Stop Loss above the high of the U-Turn and targeted an area where I believed it would head towards before pulling back- how did I know it would pullback there? (Trade Secret)


    Below is the Video Analysis of the Trade Setup.





    As you have seen in this video, the main elements of the trade were;



    - Identifying The Candlestick Patterns that Form Consolidations

    -Trading these Waves with Strong Setups And Signals

    - Double Top Signals

    - Breaks of Uptrend Lines

    - U-Turn Signals & Counter Trend Line Breaks




    I believed that the trade would have taken 5 Days to hit its target but after only 2 days, the target was hit..



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    The main thing about this trade was that I exited just ahead of the start of a sharp pullback that would last 3 days. This would have easily taken out/threatened the Stop Loss had I not exited at that area...


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    Not only did this confirm the accuracy of the Exit Strategy but it also showed that it was in sync with the Strategies of the major Currency Traders around the world.


    So being able to identify when Consolidations are being formed with certain types of Candles allows you to be able to take advantage of these waves. Once we see these signs and can spot the strong Daily and 4H Signals that start these moves, strong trading gains are possible.


    With this latest trade, the Strategy has recovered to be up 38% for the year, following a flat performance in the summer.


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    MAIN ELEMENTS OF TRADE


    - Spotting & Trading Waves that Form Consolidations

    - Trading Strong Daily & 4 Hour Chart Signals

    - Appropriately Setting Trading Targets to Avoid Pullbacks

    - Being Disciplined to Hold Trades over Several Days



    Did you trade this move as well?


    Questions, comments welcomed


    Thanks


    Duane
    DRFXSWINGTRADING
     

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