WHEN TO BUY & SELL (strategies)

By | April 28, 2020

The most important thing in forex is knowing (predicting) where market will go in the future. Think about it, we BUY when the market is going up and SELL when the market is falling>> which is very easy to understand and talk about but the real challenge is how you will know if market will rise or fall, so that you buy when the market is rising or sell when the market is falling.
We have the following which will help us on that:

  1. Support and resistance which is the mother strategy of them all.
  2. Indicators (for e.g. moving averages).
  3. Candlesticks patterns.
  4. Chart patterns.
  5. And many more…

Support and resistance (mother-strategy):

Now! Let’s focus on Support and resistance. SUPPORT: • is a level in the market which stops/limit market from continuing with a downtrend or price falling • It supports market to go up (Bulls trend). RESISTANCE: • is a level in the market which resists market from continuing with an uptrend or price rises. • It push market down, which results to be a downtrend (Bears) Imagine our support as a glass floor, and our resistance as a glass roof and we are bouncing the ball from support (glass-floor) up to, Resistance (glass-roof), and down to, Support again and up to resistance, And again and again… Until maybe a ball breakthrough our roof which is resistance. What do you think will happen? A ball will keep going up right? Yes. If market break the resistance it keeps on going up

until it reach a new resistance. If market break the support it will continue going down until it finds a new support. If market break through the resistance: we BUY. If market break through the support: we SELL. We have three types of support and resistance. 1. Ascending support and resistance. – Market is likely to break down a support. (Check picture page 20.) – expect to SELL whenever you see full formation of that S&R) 2. Descending support and resistance. (Check picture page 21.) – Market is likely to break up the resistance and go up. – expect to buy. 3. Neutral support and resistance. (Check picture page 22) – is likely to break both support and resistance. – expect both BUY and SELL.

How to you draw your support or resistance?

  1. Use trendline.
  2. When drawing support and resistance make sure market touched 3 times or above for it to be considered as the support or resistance

Moving average (Indicators strategy):

Now! Let’s focus on this very common and well-known indicator (EMAs). Almost all forex traders are familiar with it. There are more than thousand indicators in the market but this one will make things easier for you, and will also allow your platform to be clear and workable.
This indicator will give you both buy and sell signals, but the picture below is showing a buy signal (See the example).

Those two lines (Red&Yelllow) moving with the market or the graph is our indicator “EMAs”, but you can choose any colour that will best suits you.
On the previous page, this indicator was giving a buy signal. Check the purple line>>> red line crossed over with the yellow line indicating for us a BUY signal. When the red line was above the yellow line and market was falling. When the yellow line was above the red line market was rising.

Remember we buy when the market is rising.
So you buy: when the yellow line is crossing and going above the red line, check on my example I indicated with a purple line so that you can see where the EMAs crossed over.
So now…

Now the picture below is showing a Sell signal (See the example).

In this picture, Yellow line crossed over with the Red line indicating for us a SELL signal. When the Yellow line was above the Red line and market was rising.
When the RED line was above the YELLOW line market was falling.
Remember we SELL when the market is rising

So you SELL: when the red line is crossing and going above the yellow line, check on my example I indicated with a purple line so that you can see very clear where the EMAs crossed over.

So how do you add these two lines?

  1. Go to insert.
  2. Scroll to indicators.
  3. Select Trend.
  4. Choose moving averages,
  5. Fill in 15 on period.
  6. MA method, choose Exponential
  7. Style: Yellow
    And again.
  1. Go to insert.
  2. Scroll to indicators.
  3. Select trend
  4. Choose moving averages,
  5. Fill in 30 on period.
  6. MA method, choose Exponential.
  7. Style: RED

Chart Patterns (Technical strategy):

These guys here are grouped into two, Bullish and Bearish reversal patterns.
Bearish (SELL) reversal patterns:
These patterns tells you that market will reverse and go down. If you see any of the following patterns you should get ready to SELL. There are many patterns but I decided to pick out few which are more effective. • The following patterns indicates for you that market/graph will fall.
• You SELL on the breakout point which is located in the Support neckline. It is pretty easy and clear to understand. • Market will rise or go up before making or forming any of these patterns because they indicates for you that market will reverse and fall (go down).
See the following examples.

M-formation (Double top)

Head and Shoulders

Bullish (BUY) reversal patterns: these patterns tells you that market will reverse and go up. If you see any of the following patterns you should get ready to BUY. Out of 30 patterns I choose the following because of their effectiveness.

  1. W-formation (Double bottom)

Inverse Head and Shoulders.

TO BE CONTINUED
Thanks for your corporation and patience. More respect.

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