In this episode of Truth About FX, Walter talks about his favorite trading strategy. He characterizes the “Big Shadow”, trade, retracement entries and candle formations.
According to him, it’s not the issue of having a “favorite” strategy but rather whether your strategy fits your personality and the markets that you’re trading.
Download (Duration: 02:23 / 2.73 MB)
In This Episode:
00:40 – special case
01:06 – viable strategy
01:57 – big shadow
Tweetables:
Do more backtesting rather than searching for the right system. [Click To Tweet].
Try and find a system that you are comfortable with. [Click To Tweet].
There are always weak spots for every system. [Click To Tweet].
Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.
Hugh: Hi, Walter! What is your all time favorite trading strategy?
Walter: Good day, Hugh. That is a tough one. If someone said “Look, you just do this one thing” I would say, I would probably go with the “Big Shadow” which is a special case of the engulfing candles.
The listeners, if you are familiar with engulfing candles, the Big Shadow is basically like a special case of that. A couple of things have to be setting up perfect for that. I think and I’ve seen it done where you could just trade Big Shadows like you are always on the market, and you trade the Big Shadow, sell to a Big shadow long and so forth.
You just keep trading like that, that is a viable strategy in of itself. If you have to take one, that’s probably what I would go with. It’s really simple. I like to use them with support and resistance but I know some people don’t do that.
Some people use them with the trends. They wait for the market to start to show what they think to be a trend then they wait for retracement which is followed by a big shadow entry signals.
There’s a lot of things you could do with it. I would say it’s a simple two candle formation, I think it’s fairly powerful so I’d go with that. Is there something that you like in terms of trading, that something that you would just say “Look, if I traded one..” or are you happy to have different systems?
Hugh: At this point, I don’t think I could really call one favorite strategy.
Walter: Yeah, fair enough.
Hugh: If people would want to find out about how to trade Big Shadow, where do they go?
Walter: I’ll post a video underneath. That is a great question. I’ll post a video under the shownotes here so you can see the basic setup and you can just click on that and see how it goes and test it for yourself.
Hugh: Cool!Thanks a lot.
Walter: See you.
Shownotes:
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