This system involves using three different timeframe, a 4 hour chart first duck , a 1 hour chart second duck and a 5 min.
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Positional traders may wish to hold their winning positions as long as the current price remains above the sma on the 1 hour timeframe. On that note, in our opinion this is a very sound set of guidelines that those new to trading would be wise to pay at least some attention to.
Of course this system has losing trade and losing runs, but with proper money management and good discipline I'm sure this system will keep you out of bad trades and give you a great chance to make profits in the Fx market. One of the nice things about this system is it will quickly tell you if prices are in an up or down swing phase and stop you from guessing!
It will also allow you to decide to be a bull or a bear and trade in the direction of that trend. There are 3 charts involved in this system: There is 1 indicator, a 60 period simple moving average 60 sma plotted on each chart. There you go, its that simple. From this chart we can see that current price is below the 60 sma.
This tells us that we maybe looking to sell. We need to see the current price below the 60 sma on this chart also, this gives us confirmation. Is there economic news out today? What time in the day is it? Is it a holiday today? Is the market stuck in a choppy range? The principal of this system is to trade in the direction of the trend and to enter a trade at a price that offers you some chance of success. There are defiantly more questions than answers in trading!
I love stop-losses, I just hate when they get hit. By knowing what size my stop-loss is and what size my target is, this will allow me to calculate my potential risk versus reward ratio. The size of your stop-loss really depends on how you are going to trade this system.
Positional traders and swing traders will probably be using wider stop-losses than a day trader. A positional trader may want to use support or resistance off a 1 hr, 4 hour or daily chart as a stop-loss location. The 60 period sma from the 1 hr or 4 hour chart could also be used as a stop-loss location for positional traders. After all if you where buying and prices dropped below the sma on the 1 hour chart or the 4 hour chart, this would mean that your ducks would not lined up anymore for a buy, so this may be a stop-loss location.
Support or resistance off a 1 hour chart or lower timeframe may be useful as a stop-loss location for a day trader. Fixed stop-losses are also good for positional or day traders.
A positional trader may use a fixed stop-loss of pips for example. A day trader may use a fixed stop-loss of 20, 25 or 30 pips for example. OK Captain what about the second part of the above title, the bit about: Probably not, they let prices drop down to their stoploss and get taken out for the full stop-loss amount.
One of the things I like to observe when I am trading this system is: Let have a look at the chart below, the current price is above the 4 hour sma and the 1 hour sma two ducks are lined up. I am now looking at buying when prices cross above the sma on the 5 min chart and the last high on the 5 min chart all three ducks line up. I am day trading so I will put my stop-loss below the last decent low on the 5 min chart which would be 20 pips away from my entry.
My target for this trade is 40 pips. Everything is going according to plan in this trade, we have entered the trade by following the rules and our risk versus reward is good, now we play the waiting game. But what happens next may have put our trade in doubt.
The current price has dropped back below the sma on the 5 min chart by more than 10 pips, this mean that all our 3 ducks are no longer lined up in the same direction. Our stoploss is still in place and has not been hit.
We have two choice, we can either wait and see what happens or we can get out of this losing position early and save some pips, after all our ducks are no longer lined up! If this trading scenario was to happen I would gladly get out of this position early before my stop-loss was hit. This trade would have continued lower and would have easily taken out our original 20 pip stop-loss.
By understanding this system and been able to identify when prices are not obeying the system you can save yourself a lot of pips. If you where a positional trader using this system the above scenario may not bother you too much. I would mainly use this exit plan for day trades. But now that we understand how this system works and we can clearly see if prices are obeying or not obeying this system, we can use this information to our benefit while we are in a trade.
As pointed out in page 3, risk versus reward is GOLDEN so before you ever enter a trade the potential reward should be greater than the risk. Support and resistance levels from a daily chart can be good target areas. Some questions I would ask myself in relation to potential targets would be: Have a look at the 4 hour chart If the answer is yes you could be more generous with your potential targets.
If the prices have been moving in a pip range, then a more conservative target may be needed. Let look at the chart below: From the above chart you may have bought using the rules of this system. You can see that prices are staying above the sma, this is obviously a good sign if you are long! If you are trading this system you could stay in this position as long as the current price remains above the 5 min sma.
You could also use a fixed stop-loss, maybe pips or more from entry. It all depends what type of a trader you are, so you decide! If you are a longer term trader or investor, this system can help you get a good entry point into the market. Another "trick" that may help you preserve capital, if you do buy and prices get back below the 5 min 60 sma by 10 pips not a good sign you may want to cut your losses short before your stop-loss.
But if you are a longer term trader this may not be a big deal for you. I like this system a lot as it does not try to out-guess the markets movements and pick tops and bottoms. The system will quickly tell you to be a buyer or a seller. The best time I found for trading this system is the European and US sessions. I like to use this system as a guide in addition to my own market knowledge.
The system makes use of just ONE simple moving average – the 60 SMA, making it quite easy for the average human to pick up. The only “tricky” part is that it makes use of three time frames: the 4-hour, the 1-hour, and the 5-min chart.
The best time I found for trading this system is the European and US sessions. I lke to use this system as a guide in addition to my own market knowledge. Take care to watch what is going on around you – economic new releases, holidays etc. Good Luck with the 3 Duck’s Trading System. Captain Currency. 71#3 Duck's Trading System Submit by JanusTrader The system will help you identify buying opportunities in the direction of the last uptrend and selling opportunities in the .
Simple system that will improve your trading. A commonsense approach to price observation. When buy and when sell. Sep 21, · Hello Traders, Just thought I would share The 3 Duck's Trading System with you.
Oct 03, · 3 Ducks Trading System 3 Ducks Trading System Review – Captain Currency. but since incorporating the lining up of the “3 ducks”. Sep 22, · The 3 Duck's Trading System. Firstly I would like to say, I did not create or invent this system, I have just added one or two ideas to make it my own and named it "The 3 duck's Trading System" for obvious reasons as you will find out later on. The system is fairly straight forward and easy to use.