Profit From The Forex Trend
In this post, we shall be answering a question from one of our fellow subscribers asking the below question.
How can I trade with the trend on the higher time frame (e.g Daily/4hrs) on the lower time frame (e.g 1hr/30min)?
Typical this is what I call “Buy the Dips and Sell the Rally” strategy. So let us talk more about this strategy here so that you guys can later try it out on your demo account to see if it works for you or not.
In this technique, you will use the higher time frame like the daily chart or 4 hourly charts to tell the trend of the market. You can make use of the 200 EMA to help you identify the trend of the market. You can find out more about how to use the 200 EMA to tell the trend from the link below. Let says that we have established the trend on the higher time frames to be UP.
You will then move to the lower time frame like the hourly or 15 minutes chart to wait for the price to retrace and then enter a LONG trade to “Buy the Dips” In order to know when exactly you should enter a trade, you will make use of several support and resistance levels like the pivot points, Fibonacci as well as old swings.
Once you have identified a level of strong support or resistance on the lower time frame like the hourly or 15 minutes chart, you can then wait for the price to retrace back to hit that level before enter a LONG trade.
In order to further perfect this technique, you can make use of the modified stochastic to tell when the price is going overbought or oversold with higher accuracy and then enter a trade. For those of you who are not in my forex mastery course, you can also use the default setting provided by your platform.
I must say that this question is a great one as it has given all of you a good trading strategy to trade with. Buying the dips and Selling the rally is one great strategy that any one can used. Simply try it out on your demo account to make sure that you can execute it correctly and then use it on your live account.
If you guys have anything to share with us, do feel free to give your comment below.