Putting it all together, we will place 5 EMA's on our charts using these 5 numbers as the foundation.
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By color coding the lines, we can all uniformly follow each others trades and it just establishes a uniform set up. While many folks in the FX Trainer world will be advocates of this, it is not recommended. When substituting with their close FX Trainer cousins FX1 FX2 , we are not using "exact" Fibonacci numbers and we may get slightly different entry triggers particularly when it comes to entry Criteria 3 , thus affecting profitability.
This is a trading strategy,. There are plenty of other strategies in which the FX1 and FX2 lines can be used.
EMA's 5, 13, 62, Trading
Okay, we've seen for the most part, that the EMA 62 represents the turn over between Buyers and Sellers in the market. Thus, the key to this strategy is when price moves past the 62 EMA But, I am a conservative trader, and I don't like "typically", so we are going to use some "filters" to help eliminate what I call "head fakes" with the price. If a filter does not do one of these two things, then why use it.
I think you get the point. Put the 13 EMA on your chart with the rest of your indicators. When the market breaks away from the EMA 62, there is a very high probability of a strong market move coming. Need proof? Well, go back on your favorite currency pair and check it out. This filter is so profitable, you increase the size of our trading position when we see it develop and then happen. When you go back and check it out, you will notice many times how it just misses a move by a few hours.
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It is an extremely profitable filter. Let's take a look at two examples If we had entered the trade with the Blue Candle closing past the 62 EMA, it would have resulted in a loss. This is a price head fake! But, let's say we used the 13 EMA as a filter. In this same example, the 13 EMA as a filter would have kept us out of this trade. In summary, we can use the 13 EMA as a filter to determine true sustained market momentum. Now, let's look at an example of using the 13 EMA to actually enter a trade.
In this case, a candle close at This trade continues up to But sometimes, the price will reverse shortly after the 13 crosses the 62, so how do we profit? See chart below.
The Power62 System 4 Forex | Prices | Financial Markets
Again, filters are designed to keep us out of bad trades, but we don't want to lose profits when using one to enter a trade. So, the way we will capture back the safety net we have in place by using the 13 EMA as a filter, is to actually stack another, smaller term trade in front of the cross. And, that's going to be the cross, but only the cross that opens into the cross the "last" cross before price moves across the 62EMA. Our experience says that will only cause you tremendous heartache, stress, frustration, and mediocre results when all is said and done.
I will point out in Rob Booker's original system, he does state you can trade 's. We will only consider one particular , and that's the one opening into the cross. They really are two different strategies.
Our criteria for taking the appropriate trade is not going to work for day trading on every trade. Lastly, our model is about getting us off the charts, and trading every trade would only put us back on them. The pip opportunity in this ENHANCED model is more than sufficient to not encourage anyone to be motivated to be chasing pips on every trade that takes place. We see that if we take the cross that opens into the cross, we can capture additional pips in this trade. With the Blue Candle close at In order to exploit the Fibonacci, we'll use the "rolling Fibonacci", or the 62 EMA to mark the turnover between Buyers and Sellers Our concept, at the big picture level, is to get in a trade when price moves past the 62EMA But, price movement alone can give us head fakes.
To avoid head fakes, we'll use the 13 EMA as a "filter" Thus, we can become very selective on which cross to enter. Read that again, it's to "maximize" the pips in a cross and "minimize" our risk in the the trade. What that says is IF we don't take the cross that leads into the cross, we can still be positive in the if it fully develops.
All this translates into NOT trying to squeeze the trade for every pip, or to jump-the-gun on it, etc. So, we have criteria that will help us identify when and where to get in these 's to maximize the pips in the , yet we can do it with literally minimal risk. That doesn't mean it will always penetrate it and go past it; sometimes price will be pulled to it only to bounce it away. But, price almost always is drawn to the 62 when it's anywhere close the lone exception being when a super barrier is between price and the And, technically, when we say the cross, we mean the current price when the cross occurs we really don't care where the CROSS is, but rather where the PRICE is at the time of the cross.
Here's the reason Now, you may have to trade the model some. If price is greater than 20 pips away at the cross the coming into the 62, that is , we run the risk of price just reversing out and not coming to the 62 the 62 may not be strong enough at that distance to pull the price all the way to the 62EMA. So, entering a trade with the price greater than 20 pips away has its inherent risk.
If the price is less than 10 pips away, we don't have our "wiggle Room". In other words, let's say there's a cross and the price is 6 pips away. We enter the trade. The price starts to come to the 62, and then gets bounced away remember, the price will almost always come to the 62 if in the Gravity Zone.
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Because we entered that trade just 6 pips away, we might not have enough room for that to reverse as the price bounces off the 62 and to get out still in profit. It's just that simple. How much risk is that? Remember, if the price reverses on you after you are in the , and you got in AT the gravity zone, you have plenty of time to exit whether the price bounces right at the 62 or if it penetrates 5, 10, 20 pips before reversing.
I often make 15 to 25 pips on every lot on trades that never fully developed into 62 trades. Again, how risky is that? If you find another strategy that lets you trade aggressively to maximize pips in the trade, and there's an "out" if the trade fails and you PROFIT in that "out", please email me at gregormks yahoo.
In our example above, the cross going into the wasn't confirmed until the Blue Candle close at That is 10 pips away from the 62, so we can enter this trade. If price was repelled at the 62, we had room to let it reverse and still exit the trade either in profit or break even.
Not bad for an "aggressive trading strategy". Criteria 1: Only take 's into the 62 that are in The Gravity Zone price no closer than 10 pips, no further away than If you have a cross into the 62 which results in price being more than 20 pips away from the 62 EMA, you can just wait until it gets closer. Use sound momentum trading guidelines Once it gets in the gravity zone, it should go the rest of the way to the So you can enter, and still have room to exit and profit if the 62 trade does not develop.
All of the above Criteria 1 is intended to be acted upon based on candle closings. However, we may take a trade into the 62 EMA riding on the coattails of a large, momentum candle. If we see such a candle, as it moves to the inside boundary of the Gravity Zone, we can jump on that trade, and ride the candle all the way to or into the 62EMA. Again, it's why the Gravity Zone is so powerful.
Be prepared to back out exit quickly, as the candle may reverse on you at or inside the But, if it does, you're in this trade with plenty of room to exit and still be in a few pips profit. On the other hand, it may be the trade that goes for pips! See example below:. In this case, we grab it and can ride it.