26/09/ · This is a very popular pattern to signal trend reversal. Prices in an uptrend rally to a point and correct, forming a left shoulder. Price rallies again to a higher high continuing the uptrend Estimated Reading Time: 6 mins 11/06/ · SIMPLE FOREX TRADING - M And W Forex Trading Patterns - blogger.com: Stacey Burke Trading 06/08/ · I still don't get your logic. Traditionally, an M pattern is at the top of a trend and a W is at the bottom. These jump out if you switch to a line chart. You sell a M and buy a W. You might get a couple of pips scalping the opposite, but that's it. An M represents a double TOP, and a W
The Easiest Forex Trading Strategy You'll Find - Smart Forex Learning
Today, I want to share a forex trading strategy with you, called WhaM. This trading strategy is so easy to use, even your parents would be able to trade it.
I reckon even your dog could trade this. This trading strategy is not created by me. I read about it a long time ago from Will at wmd4x. comwho originally came up with these patterns and found a way to trade them. This is my interpretation m and w patterns in forex the system and how I currently trade it. No indicators. No complicated rules. And most importantly: it just works incredibly well. Everything you need to know to adopt this strategy is right here, m and w patterns in forex, in this article.
Click To Tweet, m and w patterns in forex. The WhaM forex trading strategy is a strategy that uses specific chart patterns as the base for low-risk entries on trades with a high probability of success.
Specifically, we will look at double tops and double bottoms that look like the letter M or W. Once such a pattern is identified, we will take an entry at the nose of the pattern the middle of the letter. I trade it on the 4H chart, m and w patterns in forex, but it also works on higher and lower time frames.
When trading this system, you will want to start out with clean line charts. The reason we use line charts and not candlestick charts is very simple: it allows us to focus on the things that matter.
We want to see the patterns as clearly as possible. At some point, it is helpful to switch to candlestick charts, since line charts will not m and w patterns in forex show us how far the wicks of candles reach.
In order for us to determine whether to enter, the stop loss and the take profit, it can be useful to switch to candlestick charts. As said, we look for two types of chart patterns: double tops and double bottoms. Not only that, but they need to be shaped like the letter W or the letter M see where that catchy WhaM name comes from?
Once we have found such a pattern, we set a pending buy for W or sell for M at the nose of the letter the middle bit. See the clean W shape? If we would have set a pending buy at the nose of the W pattern, what would have happened? And we have a winner! Our pending sell order got triggered when the price retraced temporarily, m and w patterns in forex, only to plummet down and take out our take profit level.
Try to find similar W and M patterns and see how the price behaves afterwards. Does the price often return to the nose of the pattern? Is there often a reaction once the price reaches this point? What do you think is important when looking for good W and M setups? Why would a simple thing like the shape of some letters actually work as a profitable forex trading strategy? Regardless of the W or M pattern, double tops and double bottoms are a powerful existing chart pattern. Plenty of traders have been very successful in using double tops and double bottoms to trade trend reversals.
Once a double top or double bottom occurs, it is often followed by a change in price direction. The WhaM trading system only places trades in the direction of that reversal indicated by the double top or double bottom. Simply put: double tops and double bottoms just work. As the W and M patterns are formed, price finds support for the M pattern or resistance for the W pattern in the nose.
There is an often strong reaction around that zone where buyers and sellers will battle for the direction of the price. When the W and M pattern is completed, however, that level has broken. The support has turned into resistance and the resistance has turned into support. Price will often retest those specific levels, which is why the WhaM trading system works. Plenty of traders exclusively trade break and retest patterns, so even this can be a very good and profitable trading system on its own.
I have experimented with this method on the daily chart, this also works very well. It is, however, a bit too slow for my liking. Trading it on lower time frames also works, but as with most strategies, the lower the time frame, the lower the win rate. On the other hand, a lower timeframe might give you more opportunities to enter.
This enables you to play out your edge more often, which is a benefit. Once a W or M pattern has formed, you can put a pending buy or sell at the nose. Before I do so, however, I check the following things. While these checks are mostly optional, I have found that following them will give me a larger win-rate. Since that might not be very descriptive, let me give you an example. The chart below contains a W or M, depending on how you look pattern, but it is much too small in the overall context of the price action of the past period.
Every time you find a WhaM pattern, m and w patterns in forex, think to yourself: Is this really a clean W or M-shaped pattern? The examples at the beginning of this article are clean. Conversely, look at the following examples:. Of course, you can recognise a W or M in these, but they are really not clean enough to be traded.
Ideally, you want to see a long first leg in one direction, then the pattern and then a long final leg in the opposite direction. M and w patterns in forex, this might sound weird, but hear me out. The stronger the initial reaction that forms the nose, the more likely the setup will work. You will want to see a sharp reaction, with the price just touching a level and bouncing back.
What you should avoid are M and W patterns where the price has been lingering at the nose. If the price seems unsure of the direction and is maybe ranging a bit around the level, avoid taking the trade. It means that there is no clear majority of either buyers or sellers and the level at the nose is not very strong.
This, in turn, means that it will be less likely that we see the reaction we want. In my experience, the patterns work best if it is the first time that the price reaches the nose of the WhaM pattern again. The stop loss can usually be placed a few pips above the M-pattern or below the W-pattern. Consider for example the following chart, m and w patterns in forex. If we were to just set our stop loss levels using the line chart, we might have risked placing them too close to our entry.
Instead, it would be better to place them above the wicks of the candles. Putting our stop loss a m and w patterns in forex bit beyond that level will give us a better chance of not being stopped out, as we can see here:. The take profit should be at least the size of the stop loss, giving you a risk to reward ratio R:R of Often, if the retest of the nose triggers a sustained move in the opposite direction, we can see that a R:R of would also work quite well. The take profit level could also be determined based on the relative strength of the level of the nose.
It might very well be that the level of the nose is exactly at a strong zone of previous support or resistance. In that case, it would be more acceptable to use a bigger reward-to-risk ratio, as we can anticipate a strong reaction at that level. This means that I first will decide where my stop loss should be based on the pattern. This ensures that my equity curve increases smoothly and potential drawdowns will never get too large. This forex trading strategy is surprisingly simple. If you decide to give this system a go, I urge you to not just take the things M and w patterns in forex said for granted, but instead, do your own due diligence and test the system for yourself.
I'm a full-time, independent fx and futures trader. I've been trading for over 14 years and specialize in price action trading, order flow, trading psychology and algorithmic trading. When I'm not trading, I'll either be traveling the world or rock climbing likely both. Trading Futures, Forex, CFDs and Stocks involve a risk of loss.
Please consider carefully if such trading is appropriate for you, m and w patterns in forex. Past performance is not indicative of future results. Articles and content on this website are for entertainment purposes only and do not constitute investment recommendations or advice. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
WhaM, a trading system without indicators or candlesticks. If you can read, you can trade it. You might also like this: Weekly Forex Outlook: September 18 Weekly Forex Outlook: September 4 Weekly Forex Outlook: August 28 Weekly Forex Outlook: July 31 Weekly Forex Outlook: July Felix I'm a full-time, independent fx and futures trader. This is a WhaM setup and what made me interested is the strong reaction I use other strategies as Double tops and double bottoms A Guide to Trading Trend Reversals - Smart Forex Learning 20 May at am […] a bit higher.
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The M and W Pattern
, time: 57:04M's and W's, the Pattern Trader
06/12/ · MW Forex System. Welcome to the MW Forex System. This is unquestionably one of the very best chart setup patterns you will ever meet in your trading career. Once you train your eyes you will notice them all over the place. At the beginning of a new trend, at the end of a retracement, within a trading range, within falling or rising blogger.comted Reading Time: 1 min 11/06/ · SIMPLE FOREX TRADING - M And W Forex Trading Patterns - blogger.com: Stacey Burke Trading 03/04/ · A double top is a reversal pattern that is formed after there is an extended move up. The “tops” are peaks that are formed when the price hits a certain level that can’t be broken. After hitting this level, the price will bounce off it slightly, but then return back to test the level again
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