2. For Day traders you will trade in the direction of the weekly candle at the break of every 200 pips. Your trading range is 200 pips and pick
whatever pips you are able to within this range using H4 candles as a guide. If the trend is strong on H4 candles you can allow your profit to
run if you are able to monitor the trade.
3. Most of the time price completes 500 pips move before any significant retrace. The first 500 pips is what you should concentrate on.
4. For your stop loss keep it at any ratio you are comfortable with but not more that 2% of your account.
200 PPAA - Medium/Long Term Traders
1. Divide your Masterchart into 5 equal parts of 200 pips each
2. Your trading range 1000 pips.
3. Use the 200 PPAA to determine your Risk/Reward Ratio which is 4:1. What this means is that you look for buy/sell after in the last 200
pips of 1000 pips price movement, which is your entry zone.
4.To enter a trade you search for pins of the weekly candles within this zone or a weekly reversal candle (reversal candle is the first weekly
bearish or bullish candle after about 800-1000 pips price movement).
5. Most of the time price completes 500 pips moves before any significant retrace. The first 500 pips is what you should concentrate on.
6. With Risk/Reward ratio of 4:1 you put your SL for sell within the next buy zone (after 1000 pips) and your SL for buy within the next sell
zone (after 1000 pips) provided this is within 2% of your trading account.
What is the difference between 100 PPAA and 200 PPAA? For 100 PPAA your risk is lower but you will have fewer trading opportunities. For 200 PPPA, your risk is higher, but you will have more trading opportunities. I used GBPUSD as an example of this analysis. You can pick the charts for other major pairs and prepare simiilar charts. Remember for GBPJPY the cycle is 1300-1500 pips and AUDUSD the cycle is 1500 divided into 750 pips each.
Preparation is important FX.
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