There is now another potential opportunity which we will look at with these indicators.
This system is simple and effective and any trader can use it novice or pro, also all the info you need is free.
Lets take a look at another trade.
The system
Only a few things to remember
1. When swing trading you are looking for support and resistance to be tested then for it to hold and price momentum to drop from the level of resistance or rise from support.
2. Breakouts ? When a price breaks a significant high or low you go with the breakout if price action accelerates.
3. We are using chart support and resistance and the stochastic indicator to time momentum ( if you do not know how the stochastic indicator works you should check our other articles and look at set ups on a free chart service such as future source.com) it's the ultimate timing indicator.
4. We are also using RSI to show overbought oversold and Bollinger bands as back up indicators
That's all we are using! Nice and simple but very effective.
Let's look at a live set up
The Euro
Prices have moved up to within striking distance of the recent high 1.3400 and are trading down from this level. Expect this resistance to hold and watch for the following:
RSI to move lower and the stochastic lines to cross and stay crossed to the downside with bearish divergence.
This indicates waning momentum to the upside and lower prices should unfold.
Target is the middle of the Bollinger band
If prices move back up and take out 1.3400 on a close basis, the odds favor the bulls and all bets are off.
That's it a simple trade with low risk and good reward, swing trading within the existing range. A Simple System That Works. This way of trading may look simple, but as we have shown live in 4 trades it can make good profits.
Ok we were lucky and we won on 4 out of 4 trades but even if we were wrong on any of these trades risk was low and rewards were high. This system needs you to pull the trigger on trades but if you practice it you will soon be piling up some big profits either swing trading, or trading breakouts.
