Menggunakan Matematika Sederhana Dalam Forex Trading

Tidak perlu takut kalo Matematika bukan bidang yg kamu kuasai. Hanya matematika sederhana, mudah dan menyenangkan.

Mari kita asumsikan bahwa dalam setiap trading resiko terbesar yg bisa anda terima sebesar $2. Kerugian maksimal dari setiap transaksi akan sebesar $2. Tidak semua trading mempunya ukuran stop loss yang sama. Oleh karen itu saya lebih suka menggunakan stop loss tetap dalam ukuran uang.

Dalam tabel berikut ini disajikan 10 transaksi forex dengan risk reward ratio yang berbeda. Dalam contoh ini kita asumsikan penggunaan risk reward rasio yg berbeda menghasilkan  jumlah uang yg sama yaitu $4.

Risk:Reward, 1:1	Risk:Reward, 1:2	Risk:Reward, 1:3	Risk:Reward, 1:5
Risk = $ 2	Risk = $ 2	Risk = $ 2	Risk = $ 2
Reward = $ 2	Reward = $ 4	Reward = $ 6	Reward = $ 10
Trade Won = 6	Trade Won = 4	Trade Won = 3	Trade Won = 2
Trade Lost = 4	Trade Lost = 6	Trade Lost = 7	Trade Lost = 8
Total Profit = 4	Total Profit = 4	Total Profit = 4	Total Profit = 4

Faktanya adalah siapapun bisa menghasilkan uang walaupun hanya menang 2 kali dari total 10 transaksi yg dilakukan. Caranya menggunakan risk reward yg lebih besar.

Yang ingin saya tunjukkan adalah anda tidak perlu menang dalam setiap transaksi. Anda hanya perlu mencari tehnik trading atau strategi dengan persentase kemenangan 50 persen dan mengaplikasikan minimal 1:2 risk reward ratio.

 
Berikutnya kita akan lihat contoh jika anda memiliki strategi dengan tingkat keberhasilan 50 persen (rata-rata) dan mengaplikasikan risk reward yg berbeda.

Risk:Reward, 1:2	Risk:Reward, 1:3	Risk:Reward, 1:4	Risk:Reward, 1:5
Risk = $ 2	Risk = $ 2	Risk = $ 2	Risk = $ 2
Reward = $ 4	Reward = $ 6	Reward = $ 8	Reward = $ 10
Trade Won = 5	Trade Won = 5	Trade Won = 5	Trade Won = 5
Trade Lost = 5	Trade Lost = 5	Trade Lost = 5	Trade Lost = 5
Total Profit = $ 10	Total Profit = $ 20	Total Profit = $ 30	Total Profit = $ 40

*** bukankah ini menarik..

KESIMPULAN : dengan menggunakan risk reward ratio yg lebih besar akan menghasilkan uang lebih banyak.

Memang tidak semudah itu, tapi menghasilkan uang di forex dengan risk reward ratio yg tepat (minimal 1:2) sangatlah mungkin.

Mari bergabung menjadi forex trader.

CADJPY move to south, but ........?

Let see CADJPY movement when i post CADJPY, Inside Bar Break out.

After a volatile week, it's look like this:

In the post CADJPY, Inside Bar Break Out i write an idea to open sell at market opening at Monday 24 August 2015. Yeah, the pair move as i predicted. But, somehow (i do not use fundamental to analysis the price) the market push it higher and making a good pin bar.

So what to do?
The key of forex trading is PATIENT
The pin bar valid act as reversal pattern if the next candle perform an engulfing with the pin bar. Let see next week, what will happen to CADJPY.

How to Trade Around Moving Average Line

Another opportunity to trade forex is when the price is close enough to the Moving Average Line.
There are two possibility:
1. The price cross MA Line from below
2. The price cross MA Line from above

If price cross moving average line, wait until the candle stick closed and than follow this step
1. Always trade with trend direction. Let's assume the market is downtrend
Picture below is EURGBP weekly price movement. EURGBP is in downtrend from the early 2014 until August 2015.

Do not try to open buy position.


2. If the candle stick after cross the MA line from below than close again below the MA line, be ready to open sell position in the next candle.
I'll use the same chart

3. If the candle stick after cross the MA line from below than close above the MA line, ignore this initial breakout and wait until the next candle stick to perform bearish engulfing. If the next candle stick do not perform bearish engulfing, you must avoid this trade until another trade setup.

Enjoy your trade!

Be ware of price trap in Lower time Frame

I write this post because a friend of mine was surprised when EURUSD pair drop again below 200 moving average (daily time frame). This happen August 26 2015.
Let see EURUSD price movement at that day:

Before August 25 2015, EURUSD price is below 200 Moving Average. The price is below a resistance level to at 1.1400. The day after, EURUSD break this resistance and the 200 Moving Average line. It's a long green candle with short upper tail. Daily trader open long (buy) position after this breakout happening.

Two days after the breakout, unexpectedly, the price move lower, lower and lower again until it close below 200 Moving Average Line and below the Support Level (1.1400). Wow...... trader called it bullish trap.

The worst mistake if a trader take this breakout is, they DO NOT FOLLOW the TREND. In this blog, i give an alternative way, an easy way to determine trend by using Simple Moving Average. The key is The order of Moving Average.

The other idea in this blog is trade forex by using weekly time frame. Now let see weekly EURUSD price movement:

This chart was taken at August 28 2015. Focus on the last candle. What do you see?
1. The price is below 200 Moving Average
2. The price isn't break the resistance level
3. The price rejected both resistance level and 50 Moving Average by perform pin bar

The conclusion is EURUSD still bearish. If this formation not change until the week ended, so it's our opportunity to open sell position in the next Monday when the market reopen again.

What i want to tell you is, when we trade a forex, always check the price movement in a higher time frame to avoid bullish trap of bearish trap.

Enjoy your trade

Engulfing:Common Signal in the weekly chart

People said, trading forex needs good analysis.
They said it's complicated.
Than you ask yourself, can i become a good forex trader?
My answer is " Yes, you CAN"

In this post, I'll show you that forex trading don't need a complicated analysis. What you need is just to locate the price and find some common pattern as your signal to buy or to sell. This price pattern called by candle stick pattern.

One of the famous candle stick pattern is the Engulfing. This two candle stick pattern must have a different color where the second candle engulf the first candle. Many trader love this pattern so much, so do i.

In my trading strategy, i used weekly time frame to trade. One of the reason is because the ENGULFING pattern. Let me show you:

EURUSD weekly chart

 EURJPY weekly chart

I used EURUSD and EURJPY in this example.
You can see engulfing pattern in the "white box"
It's appears many times. It's appears more than other pattern. That why i said you can become a good trader. You just need to master this pattern (and two other pattern), look for it and locate it in your chart and used proper money management.

Enjoy your trade!

CADJPY, Inside Bar Breakout Trading Set Up 24 August 2015

CADJPY open SELL  position

After a few weeks forming an inside bar formation, CADJPY make a movement and break out it to confirm a sell signal. For detail, you can see CADJPY weekly chart below:

Why this break out so important:
1. it break the inside bar formation
2. it break the support level
3. it break the 200 MA and close below 200 MA (bearish sign)

Here is my trading set up:
1. i'll open sell when the market open next monday
2. my stop loss will be at the high of previous bull candle (about 350 pips)
3. i use 1:2 risk reward ratio

you can see my trade set up below:

Moving Average as a Support and Resistance Level

Horizontal Support dan Resistance level sangat penting untuk memahami pergerakan harga. Kedua level ini akan menjadi peta buat seorang trader untuk merencanakan transaksi selanjutnya. Namun terkadang kedua level ini sulit di identifikasi dalam grafik, baik karena level yang tidak jelas maupun karena tren yang cukup kuat.

Jika tidak ada level support dan resistance yang jelas, kita masih mempunyai pilihan untuk menggunakan MOVING AVERAGE sebagai support dan resistance. Selain sebagai trend indikator, moving average juga sering kali berfungsi sebagai dinamic support resistance level. Lihat contoh pada gambar dibawah ini:
1. USDCAD weekly chart

2. USDCHF weekly chart

Penggunaan moving average sebagai support dan resistance sama dengan penggunaan Horizontal Support dan Resistance. Trader perlu menunggu hingga terjadi penolakan pada garis moving average. Ada beberapa candle stick pattern yang biasa muncul pada saat garis movig average berfungsi sebagai support resistance level, yaitu
1. Pin bar
2. Engulfing/Big Belt

Jadi, jika support dan resistance level sulit ditemukan, kita masih mempunyai opsi untuk melakukan transaksi dengan cara menggunakan Moving Average sebagai penggantinya. Tapi ingat, penggunaan moving average sebagi level support dan resistance harus didukung dengan adanya pola candle stick pin bar atau engulfing. Baik pola pin bar maupun pola engulfing harus menyentuh garis Moving Average yang digunakan sebagai level.

Enjoy your trade!

Engulfing

Let's us start by seeing an engulfing pattern in real market

 1. Bullish Engulfing

2. Bearish Engulfing

Criteria of ENGULFING pattern:
1. the first and the second candle stick must have a different colour
2. the body ( i just mention the body not the tail) of the second candle must engulf the body of the first candle

You will see this pattern occur very often in your screen. This pattern indicate a strong price movement.

You can't trade this pattern alone, you must combined it with trend and level to get the best trading set up.

Enjoy your trade!

Risk Reward Ratio-Secret to Success in Forex Trading

You may have a lot of trading indicators.
You may tried a different kind of trading strategy and trading system.
Believe me, you can't win the game if you just rely on those indicators, those system or those strategies.

Than a big QUESTION comes out?
HOW I CAN WIN THE GAME?

First:
You need an indicator's (at least two, not one), trading strategy or trading system that can produce a good entry point. Find it that match with your criteria, like your daily activity, your balance or anything else. In this blog i introduce a trading strategy, i called it MARS (Moving Average Resistance Support). This strategy based on MA and Resistance Support with a price action as a catalyst.

Second:
You must use, at least, 1:2 risk reward ratio. Why?

Let assume you used 100 pips as your target in each trading. So, your risk must me 50 pips.
Back to the first step, you need a good entry point, this mean that your indi must have at least 50 percent ratio of wining trade. If your indi (strategy or system) met this criteria the scenario will be like this after you trading 100 times.

Win trades : 50 time.
Win pips = 50 * 100 = 5000 pips.

Lose trades : 50 times.
Lose pips = 50 * 50 = 2500 pips.

You got it, aha, after you trade 100 times, even if your indi (strategy or system)only  give you probability to win the trade just 50 percent (0,5) you still can earn 2500 pips.

Enjoy your trade!

Last Kiss Formation

Have you trade break out before?
If your answer is "YES", then this price formation will increase your probability to success trading breakout.

What is LAST KISS?
Single word to describe last kiss formation is RETOUCH
Touching a price level, it can be support or resistance level, once again for the last time before continuing the break out.
Last kiss formation appear when a price breakout a price level, than touch it again before continuing the breakout direction.

Here an example:

This is USDJPY weekly chart for August 2015
USDJPY in weekly chart facing 121.57 resistance level. The price touch it two times before breakout happening in next touch.
After breakout, USDJPY move down to retest the 121.57 line (now it become a support). When the market rejected to move down, and bounce at this level, the last kiss formation is complete.

Enjoy your trade

Horizontal Support and Resistance

I'll try to explained it this way
Support : level above current price
Resistace  : level below current price

Let see some example:
This is AUDUSD weekly chart (August 2015). To make it easy, i removed all indicator

The yellow doted line is a resistance level (how to draw support and resistance). The level have been touch four times. For the 5th time, the market break it out and continue lower.
So resistance level is a level that prevent the market to going down. This mean the price is likely to "bounce".

To trade support and resistance level, you must learn about candle stick pattern and price pattern to confirm the price action around the level.

Enjoy your trade.

3 Rule to draw perfect support and resistance level

Rule No. 1
" the market needs to get rejected at least twice from the level (not one, twice)"

Rule No. 2
" the more rejections the level has, the more important it becomes "

Rule No. 3
" most recent rejections are more important than less recent rejections "

How to use 200 Simple MA

We can use 200 MA as a market direction.

The rule is very simple

1. if current price is above 200 simple MA, it's mean the price is trending up

2. if current price is below 200 simple MA, it's mean the price is trending down

Let see some example:

As you can see from the chart above, 200 simple MA line divide the price into two zone, above and below the line. When the current price is below the line, it will be easier to get lower. So the next rule when using 200 simple MA is:

3. open just long position (buy) if the current price is above 200 simple MA

4. open just short position (sell) if the current price is below 200 simple MA

200 simple MA cannot tell you when to open a position, it just tell you where the current price heading and what kind position you should open. To answer this question you'll need to learn how to draw support and resistance and learn price pattern (candle stick pattern) to complete your set up.

Right order of Moving Average

When you see price movement in your screen, you must answer the same question " is the price bullish or bearish. In other word is the price trending up, trending down or moving side way.

To answer this old question, you can use a different approach, different method or different indicators.

I have been try many ways, many indicators, than i found that moving average is the best indicator to solve this problem.

How moving average (MA) can solve this old question?

" The moving averages must be in a right order "

Many trader use single or double MA to analyze price movement.

You may use 200 MA to separate price into bullish movement (if price is above 200 MA) or bearish movement (if price is below 200 MA).

Another trader may use double MA to find a crossover, trader may use 20 MA and 10 MA combination or 50 MA and 20 MA combination.

I have been try these kind of strategy, here is my conclusion :
"you need at least three ( not one, not two) moving average at your screen"
1. long term moving average ( i used 200 MA )
2. medium term MA ( i used 50 MA )
3. short term MA ( i used 20 MA )

Let's go back to words "right order". I'll explain it with table below

the price is trending up if the short term MA has a highest value than medium and long term MA and medium term MA has a higher value than the long term MA. For trending down you can read it from table above.

so if you want to open long position, make sure that the order must be 20 MA, 50 MA than 200 MA when you sort it from the biggest to smallest value. Here an example from USDCAD weekly price movement

it is very clear that USDCAD in weekly time frame is trending up. Your next action is to find a trading setup for taking LONG POSITION ONLY. Caution, DO NOT take short position if the price is trending up.