Buy Pound against the Aussie. It seems that GBP/AUD has found support and now it will rallying hard. Did you read the post USD seen weaker against GBP? In the first week of 2017, GBP/AUD gave a very good sell trade. You can take a look at the following GBP/AUD H4 chart screenshot. In the screenshot below you can see a very good candlestick signal followed by a strong downtrend. Now take a look at the red arrow in the screenshot below. GBP/AUD seems to have found the support. Does it? If you take a look at the weekly chart, you will find downtrend strong. So don’t buy GBP/AUD yet.
Now if you want to master swing trading, you should master candlestick chart patterns. You can take a look at our Candlestick Trading System. We trade on H4 chart. In the above GBP/AUD H4 chart, you can see a beautiful candlestick reversal pattern that is signalling start of a downtrend. After that you can see price never looked back. It just kept on falling and falling. But we believe this downtrend is not over yet and next week we will see GBP/AUD going down as well before it finds support.
The most important thing in trading is risk management. If you don’t take risk management seriously, you will never succeed as a swing trader. We started off with using a 50 pip stop loss. After sometimes we realized we can easily reduce the risk between 20-30 pips. Then we realized we can reduce the risk even more to between 10-20 pips. We use pending limit orders to place the trades. We have stopped using market orders. Market orders always give you a bad price. Using a pending limit order will help you reduce risk a lot.
Now you should know this that traders are using quantitative methods a lot in their trading. Technical analysis augmented with quantitative methods can make your trading system more accurate. Moving averages are always lagging the price. Do you know how to build a Kalman Filter? A Kalman Filter follows price much more closely and accurately as compared to a moving average. So using a Kalman Filter can help you in making better trading decisions. We have developed a course Kalman Filter for Traders. In this course we teach you in simple step by step terms how to build a Kalman Filter. We show you how to implement it using R and Python. We also give you the MQL4 and MQL5 Kalman Filter Indicator. Swing trading on H4 timeframe is much more easier as compared to day trading on H1 and M30 charts. Swing trading gives you a lot of time to make decisions and you don’t need to stay glued to the charts.