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This site is currently inactive as I have decided to move away from exclusively trading Forex in 2010 and as such will not be taking on new coaching clients in this area.

 



I have resumed my focus on coaching as a stock market mentor where I run a success guaranteed stock trading mentorship program

 



Additionally, you can now get access to what I consider to be the best stock options daily trade alert service.

 



Of course, I am biased and with a success rate fluctuating between 68.2% and 72.4% it is hard not to be biased.

 



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You can read the step-by-step Bollinger Band Trading Strategy Guide - this is my main active trading strategy



Until next time


happy trading 


Mr Phil Newton or on LinkedIn Phil Newton trader

TRADING REVERSAL BARS AND BOLLINGER BANDS (RnB) FROM A "NEWBIES" PERSPECTIVE

wirral guy's picture

This blog is mainly targeted at New Traders and those inexperienced people (like myself), who are just beginning to trade Forex.
In this blog i want to give a "New Guy" perspective on forex trading.

Basically, I am a fairly new subscriber to Phil Newton's Trading Strategies Programme. But with Phil's excellent training programme.
Live room presentations and technical analysis, anyone can quickly learn the basics of Price Action, fundamentals of RnB strategy,
and when and where to use Fibonacci Retracements in Swing and Intra-day trades.

Today the 8th May. I just traded one cross rate, namely the GBP/JPY on RnB.
To the uniniatiated thats Reversal Bars and Bollinger bands.

(please check out the following link for more information on RnB).
 
http://www.trading-strategies.info/node/1436

OK, so bascically I switched on my PC at 6.45 am and logged into the FXCM Micro platform.
(this being my first "live" trading day..(baited breath, sweaty palms, and all that stuff.)

The first cross rate that popped up was GJ on a 5 minute time scale.
(We normally trade RnB on a 30 minute time scale, but I remembered hearing that RnB could
be traded on any time frame.)

A quick scan of the chart revealed immediate upward trending price action of at least two bars
(making higher highs and higher lows) followed by a Reversal Bar.
Which i classed as being a Shooting Star.
NB: (A reversal bar that closes outside the bollinger bands does not necessarily have to have the 2 pre-qualifiers)

(please check out the following link for more information on Reversal Bars).
http://www.trading-strategies.info/node/1183

So my "short" entry  trade was at the low of the reversal bar at 149.24.
We round down at least two points so my actual entry was at 149.20 (round number).
Stop loss at the top of the Reversal bar plus the spread and rounded up to 149.45.
We also include a "Stop and Reverse" entry.
In this case it would be a "long" - if triggered at 149.45.
At the stop loss location.

So stop loss size of 25 points. (149.45-149.20).

Now my initial target was either the next bollinger band in sequence (mid bolly), or 30 points whichever is the greater.
In this case the Bolly just won by a couple of pips. At which point ATM begins (see below).

I decided to open a short position of 3 lots .
2/3 rds (or 2 lots) of my position to scale out the trade. (ie: to produce a break even trade or 2 x 12.5 points = stop loss)
and 1 lot to continue the trade, hopefully to make some profit.
(Trade Management).

(please check out the following link for more information on Trade Management or TM and Active Trade Management or ATM)
http://www.trading-strategies.info/node/1316

Anyway my trade soon scaled out. ie: risk free trade :o)....(kerchinngggg)

Upon reaching the mid bollinger band ATM begins. (see above).
So we remove the "Reversal" aspect of the trade and our stop loss can be moved to the last previous bars high. (ie: we are locking in some profit).

So price continued on its merry way south..until..a new reversal bar formed at 7.05 am.
Which i classed as a Hammer bar.

OK, so on the formation of a new Reversal bar.
Stop loss for the previous "short" is moved to the top of the Reversal bar in this case at 148.95.
A new "long" entry is placed at the top of the revesal bar - plus the spread, and rounded up to 149.00.
Target, again mid bolly or 30 points.
A "stop and reverse" is now placed at the low of the Reversal bar. (rounded down to 148.75)

As we can see price "stopped me out" at 148.95 and a new long position triggered.

Anyway, this is one example of my RnB trades today.

I hope this short blog has been of benefit to any "new traders" who want to know about the RnB strategy from a "newbies" perspective .....  :0)

Happy Trading

GPJ

NB: Chart Below as .jpg image
      


 

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