Day Trading For Easy Money: Forex Strategies In San Francisco’s Market

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Day Trading For Easy Money: Forex Strategies In San Francisco’s Market – Some currency traders are extremely patient and love to wait for the perfect setup, while others need to see a move happen quickly, or they will lose their positions. These impatient souls make perfect momentum traders because they wait for the market to have enough strength to push a currency in the desired direction and piggyback on the momentum in the hope of an extension move.

However, once the move shows signs of losing strength, an impatient momentum trader will also be the first to jump ship. Therefore, a true momentum strategy needs to have solid exit rules to protect profits, and still be able to ride as much of the extension move as possible. The 5-Minute Momo Strategy does just that.

Day Trading For Easy Money: Forex Strategies In San Francisco’s Market

Day Trading For Easy Money: Forex Strategies In San Francisco's Market

The five-minute momo looks for a momentum or “momo” burst on their short-term (five-minute) charts. First, traders focus on two technical indicators that are available with many charting software packages and platforms: the 20-period exponential moving average (EMA) and moving average convergence divergence (MACD). EMA is chosen over the simple moving average because it puts more weight on recent movements, which is needed for fast momentum trades.

The Truth About Trading Daily Timeframe Nobody Tells You

While a moving average is used to determine the trend, MACD histogram, which helps us measure momentum, is used as a second indicator. The settings for the MACD histogram are the defaults used in most charting platforms: EMA = 12, second EMA = 26, signal line EMA = 9, all using closing prices.

The strategy waits for a reversal trade but only uses the setup when momentum supports the reversal enough to make a larger extension burst. The position is excited in two separate segments; The first half helps us lock in gains and ensures that we never turn a winner into a loser and the second half lets us try to catch what could become a very big move without any risk because the stop has already moved to breakeven. Here’s how it works:

Our first example above is the EUR/USD on March 16, 2006, when we see the price move above the 20-time EMA as the MACD histogram crosses above �

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