Forex Trading For Beginners – Full Time Professional Trader Course
SEARCHING FOR TRADING SET UP
In this chapter I will explain the process taking place prior triggering a position. Let me explain it a little bit further: the job of a trader is similar to that of a detective. Before jumping into action, meaning
entering a trade in the case of a trader or arresting a suspect in the case of a detective, there is a long job of investigation, sniffing around, considering different hypothesis, analyzing evidences, etc. Just as a detective doesn’t quite get out there to arrest the first folk walking by, a trader doesn’t quite pull out a chart and enters a position right away. Like I said before, there are plenty of things to do before that and that’s exactly what I will explain on this chapter.
THE 3SMA TREND FILTER
So, this is a trend-following system, right?
Nice, nice, but… how exactly do we determine whether we are in a trending market or not?
Well, some people use trendlines, some others rely on Bollinger Bands, some others look at the ADX indicator, etc. Every trader has his bullets. I personally use what I call the Three Simple Moving
Average Trend Filter , which sounds very grandiloquent but in all fairness it’s pretty simple: grab a plain chart devoid of any indicator, trendline or anything else and plot three moving averages: the 30 simple moving average of the close (SMA hereafter), the 50 SMA and the 100 SMA. That’s all I use to
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