Here is the way I trade to make money. I apply this strategy to the four currency pairs I monitor. The strategy: Open a cable(gbp/usd) 5-min chart, set it to candlesticks, apply pivot indicator with standard(R3, R2, R1, P, S1, S2, S3) and mid-pivots(M1, M2,...) enabled. Apply the RSI(Relative Strength Index) indicator to the chart. Set it to 14. Set levels to 30, 50 and 70. 70 is overbought and 30 is oversold. Change chart to hourly peridocity and determine the dominant trend. It will be one of three things: ascending, descending or ranging. If the trend is not apparent, change to the daily chart and determine the trend. Mark it on your chart with a trend line. While at the daily and hourly charts, make note of support and resistance(s/r) levels. You can use previous highs/lows, fibonacci retracements, pivots, round numbers(00 or 50) or all of the above in any combination you find price reacts to. You can mark previous high/lows and round numbers on the chart with horizontal lines. As...
This entry was taken when an inside bar showed up after price put in a lower high and the RSI(14) was very close to touching overbought 70 level. I scaled just over 1/2 the position at +26 and closed the remainder at +45 when the next inside bar showed up and the RSI(14) was touching oversold 30 level. This would have been a great close and reverse opportunity, but I was not quite ready to take it on. Hopefully next time. Overall, I wanted to stay with the longer term down trend on cable so I was looking for short opportunities on price pull backs. This session was a little slow compared to last night where price moved substantially lower. Unfortunately, I was returning from a weekend get away with the Mrs. and was unable to participate in that session.
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