How we use the FX Trend to make profits in FX Trading: Our daily FX Trend work best when we calculate it before the london open! (around 5:00 AM GMT). We normally start trading around this time. We then start to look at our Quant-Trend-Model. We want to know the current trend for the day and then we are looking for good entry levels in the charts. We only trade with the trend.
We have developed a sophisticated quantitative analysis with the goal to show us the strongest currency against the weakest currency.
Here is an example: Around the london open our quantitative analysis tells us, that the NZD is the strongest currency and the Euro is the weakest currency. We then want to trade EUR-NZD short. Please keep in mind that our quantitative analysis is a intermarket analysis. We look at several markets simultaneously to catch the real sentiment and trend. We also have integrated Orderbook Data in our Trend Analysis. This gives us a much better result than only looking at the forex market. It is a complex model that we developed over the last years. And the results are quite amazing for us.
Trade Management: We want to see that our positions run into profit throughout the day. We do not know when this will happen.
When our positions are clearly in profit, we start with profit-taking and secure the rest of the remaining position simply by moving the stop closer to the entry level. Protect profits is very important! When the market move against us, we have to decide, if it is only normal volatility or a complete trend change. When we think it is a trend change, than we close the positions and accept the loss for the day. Otherwise, hopefully the market decide finally to go in our direction. There will be good days and bad days, this is normal in trading and nobody is perfect. With our trend strategy we normally let the market some space to breath. Often when london opens our position directly run into profit. This can happen very quickly, sometimes 2 hours after start trading, we are already in profit and close all positions. We then stop trading for the rest of the day or re-enter on good price levels.
Stopp loss: The normal day by day process is that we open 3 positions in the direction of the trend our analysis shows. We start taking profits when we are in profit. We personally don´t place stopp loss because our risk is small. We don´t use much leverage. There are only two options: 1) the trend continuous or 2) it don´t. We make a loss or a profit for the day. Finally we want to be more days in profit than in a loss.
take profit: The main thing is our analysis of the trend and where we get in. the rest the day will show. when we see that positions run 20-40 Pip in to profit we start to protect or take something out. A small position we let in for the case positions run 100 or 150 Pip into profit. We don´t post exact levels. Because exact levels are nonsense. We want to make money, but we don´t have a crystal ball to tell you exact levels where price will do this or this. When we could do this, we would be the richest people in the world.
When to close a trade when the position is under water? There are two options. Closing the trade before the day ends or place a stop below the days low and let the trade further work out.
We look that the position run its course during the same day. A under water position, we could however let longer in the market with a stop under the days low. also a position in profit we could let longer in the markt. But in the next day we always have fresh signals which are more interesting.
An example of a FX Trend that we have posted.
as we see today’s analysis shows that USD is the strongest currency in our analysis and CHF is the weakest.
Our bias for the day is LONG USD-CHF, that means we want to buy only. We are not interested in selling today.
Keep in mind the process is always the same. We first look at the bias of the current day, than we decide at which levels we want to enter the market. We start taking profit when positions are 20-40 Pips in plus and we and let one small position in the market in the case we run 100-150 Pips. We finally protect our position with a stop.