How to move the stop loss in a trading operation?

 

We have already discussed in previous articles how important the stop loss is. For those who are not yet clear on the subject, the stop loss will be that price level from which our trade would cease to be valid and should be closed.

The stop loss can be automatic and programmed in the broker itself or manual. In the manual stop loss the trader makes the final closing of the transaction after checking the price in the market.

Knowing how to define the stop loss is very important. Depending on the distance of the stop loss from the price, we will have more or less profitability in the trade, provided that we respect an efficient money management.

The stop loss, once defined, may have a double evolution.

On the one hand we can have a fixed stop loss that does not evolve with the price. This type of stop loss is normally used on transactions with a high Risk/Profit ratio, so we are going to look for a price target that is much farther from the stop loss level.

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What is a Market Neutral strategy?

Market neutral strategies, as the name implies, are investment strategies that show neutrality to market trends.

What does that mean?

It means that the profitability of the strategy is not related to the performance of the market in which it operates.

It is a non-directional strategy. With this type of strategy we do not seek to guess where the market will move. Regardless of whether the market rises or falls, a market neutral strategy will look for constant and little volatile results.

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Simple strategy with RSI and moving averages

In this article we are going to talk about a simple trading strategy based on the RSI oscillator and three moving averages (SMA and EMA). This strategy will also help us understand how the RSI, one of the most powerful technical indicators, works.

This is a relatively simple scalping strategy designed to operate in 5-minute time frames in the most liquid currency pairs (EUR/USD, USD/JPY and GBP/USD).

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Forex Strategy, the Rob Booker System

Rob Booker is one of the most respected Forex traders in the world, with a lot of history behind him. The Forex strategy that I am going to present today is the system of Rob Booker, denominated Arizona System.

Rob, as all traders is evolving, and currently does not use this system, he is currently promoting his Trifecta system, but we must not forget that with this system he managed to convert $2500 in $100000, which means that this system is no so bad.

When a trader designs a Forex strategy, he does this to take advantage of a market anomaly, which usually gives us an advantage, and consequently benefits for our trading account.

This is not a usual strategy, I would consider it a trading system which joins several strategies under the same idea: define what is really happening in the market, and consequently, to act.

The market has two basic trends, bullish and bearish. There are also markets without a definite trend, where there is a lateral movement, which can be consolidation, accumulation, or distribution, but there are another times in the market, in which we really have no idea what is happening and there are not many opportunities for the trader. Rob intends to find and define through indicators, at what time we are in the market, and act using a Trading technique, or a different Trading strategy.

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Forex Scalping Strategy Based on two EMA

Today we will present a strategy that requires mainly time. This is a 1 minute Forex scalping strategy. As its name implies, it is designed to perform quick transactions to achieve a series of small gains, which in the end add up and accumulate a big profit.

This technique is ideal for Forex beginners because of its simplicity. Read on to learn how to implement it.

What is Scalping?

Before explaining the strategy, it is worth remembering the concept of “scalping” in Forex trading. Scalping refers to a trading style in which many trades are made in a very short period of time. The goal of this style is to get a few pips of profit and get out of the market quickly.

Due to the short duration of its trades, scalping is a style that develops at a dizzying speed. However, for the same reason, it does not use many indicators or fundamental analysis, which makes it perfect for beginners. In scalping strategies traders usually perform hundreds of trades per day, making it a time-consuming style.

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How to trade false breakouts in the markets?

Trade false breakouts in a simple way

The trading techniques based on breakouts are very popular because they are quite profitable and can be used to trade in any market.  Many traders know the fact that after the price get caught into an area of consolidation a breakout usually occurs by which the price make a violent and extensive movement outside the area where it was consolidated.

These movements could be so strong that a trader can obtain high profits if enters the market in the right direction. However, the problem is that in many cases the traders who jump when there is what appears is a breakout realize the fact that the price returns to the area of consolidation and ends losing money. This is known as a fakeout or false breakout.

In fact, the fakeouts are so common that many investors trade and make money with strategies based on false breakouts. Therefore, in this article we will show the basic way to trade false breakouts.

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Momentum Trading Strategy in 4 hours charts

 

This trading strategy is based on the famous moving averages tunnels strategy developed by Vegas. In this particular case it was developed for 4 hour charts on any trading instruments, but is used more regularly to trade currency pairs in the Forex market. Like other similar systems, the operation is quite simple as will be seen below:

Methodology of the trading system based on momentum and tunnels for 4 hour charts

1.) To start we create a weekly chart on the asset that we are analyzing, which can be a candlestick of bar chart. This chart should contain an exponential moving average of 21 periods (EMA 21) applied precisely to the average price [(H + L) / 2], and a simple moving average of 5 periods (SMA 5) also applied to the average price [ (H + L) / 2].

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Trading system with 1-2-3 pattern and Bollinger Bands

In this article we will explain a trading strategy that combines the use of Bollinger Bands and the 1-2-3 pattern, a very powerful chart pattern used by many traders in a variety of markets. It is a simple strategy as we shall see below, however, it requires mastery of a number of theoretical concepts that we will explain below.

The 1-2-3 maximum that originate in the upper bollinger band or moving average line (center line of the Bollinger Bands) and the 1-2-3 minimum which originate in the lower bollinger band or the moving average line, provide excellent signals that indicate possible changes of direction in the market. Because the 1-2-3 pattern occurs in virtually every market and any time frame, this strategy can be applied to trade in a variety of instruments and time frames, including short, medium and long term.

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Perfect Order Trading Strategy – Description and Example

What is the perfect order?

The perfect order of moving averages is defined as a set of simple or exponential moving averages that are aligned consecutively depending on the trend. For example, in the case of a bullish trend, a perfect order would be that a moving average of 10 periods were in a higher price level to a moving average of 20 periods which in turn would be higher than a moving average of 50 periods and so on. In other words, in an upward trend, moving averages are aligned from major to minor period upwards.

In the case of a downtrend, the opposite is true, ie that moving averages are lined up from smallest to largest period. For example, above the 10 period moving average would be the moving average of 20 periods which in turn would be below the moving average of 50 periods and so on. This alignment of moving averages is the basis of the perfect order trading strategy that we will describe below:

Example of a perfect order in an uptrend:

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Trading strategy based on the Parabolic SAR and volume

The Parabolic system price/time is another idea that introduced the famous Welles Wilder in his book “New Concepts in Technical Trading Systems“. This system was developed as a high and reversal strategy, which means that a trader using this approach will always have either a buy position or a short position in the market. Here we must remember that when the Parabolic SAR generates a buy signal, for example, a series of bullish points  appears below the current price action. As the market moves higher, the indicator points also rise, first slowly and then faster.

When the trend is stopped or begins to reverse, points and prices intersect, in which case a long position is closed and a new short position is open. For this system, we want to determine whether the addition of a volume requirement for Parabolic SAR entry signals can improve the performance of these signals. For example, the buy signal for this system is when a high in price reaches a point of Parabolic SAR above the market with a volume higher than the simple moving average of 5 periods (five bars) of volume. Both conditions must be met in the same bar.

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