Forex Signal System

Before I introduce the Forex signal system, I would like to point out that trading Forex is not much different from that of trading the Stock market – there are however variations and differences in interpreting some technical signals. (word of caution - never trade candle signals on their own)

Forex signal system is a powerful trading system it utilises the least number of technical indicators and the power of the inside candle!

Used in the correct order form a powerful trading system!

The principals are simple;

It is important to recognise the major trend direction by use of the Ema 200 only (the setup of other two moving averages is not important, provided that the trend is confirmed on at least two higher time frames!)

The Forex signal system is only valid if the trend direction of the Ema 200 is first taken into consideration

Recognise an overbought or oversold signal ready to reverse in the direction or trend indicated by the 200 Ema. If you do not know exactly how this is achieved then click here…

Wait for the SAR signal to indicate a trade in favour of the trend direction, when this happens, look at the longest spike of the over bought or over sold signal and lookout for an “inside candle”, this inside candle must only happen between a maximum count of 3 candles away from the longest spike or candle of the over bought or over sold signal for it to be valid. In the chart below (highlight red) the spike is hardly noticeable!

If on the trading chart an inside candle is not seen, flick over to the next two higher charts and if one is seen there – then take the trade only when the SAR indicates on your trading time frame.

Take note that In Forex candle charting, at times an inside candles high or low does at times show above or below the high or the low of its previous candle – take note that only one of the inside candles high or low (and not both) will be higher or lower than its previous candle, the projected length of an inside candles high or low must never exceed 2 points / pips to its previous candle.

As can be seen highlighted in these two charts on the top and bottom

This flexibility of 2 points / pips applies strictly to Forex only!

"Safety Net" of trading, an important addition and a must with this method. Know "when to enter" and "when to stay out!"

Power of the Inside Candle!

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