welcome to this trading tutorial on a
Forex strategy that works so well that I
trade this every time it sets up to this
day so I've been trading this for years
and you know this darn thing just
continues to work and work and work it
is so reliable and they like to give you
a little introduction to it on this
YouTube video and then make the entire
trade setup and rules and all that
available to you absolutely free if
you're interested so here is the Forex
trade strategy that works by the way
this also works on stocks emini futures
gold crude ETFs pretty much anything you
can chart and I've been trading this for
years so here it is and let's introduce
a couple of general concepts to set up
the trade and why it works the logic
behind it so it's generally accepted and
I will be the first to acknowledge that
there are many variations within this
but generally acknowledged in the
trading community that there are two
types of dynamics in the market that is
trending and then reversion to the mean
that type of trades so certainly within
trend trading we can include such things
as low volatility breakouts that are
starting a new trend trend reversals are
a type of trend trade even though there
were a reversal trade so a lot of
different subcategories under trend
trading and a lot of people know about
that so that is something that is very
well known but I find dent reversion to
the mean trades are not quite as well
spread throughout the trading community
and that's what this one knows this is a
reversion to the mean type trade and I
like these kind of trades they're not
typically as big of a reward to risk
ratio but win-loss ratio on that can be
very very high so this can be a great
way of making some money while you're
waiting for trends to set up and some
people say that marks only trend 20% of
the time so kind of nice to have another
type of trade to be able to use anyway
this is the 50 ma this green line here
that's the 50 simple moving average
and it's very important that with this
type of training you use the simple
moving average and not an exponential
moving average or any type of moving
average that would be faster so that's
one thing that kind of blows people's
minds especially beginners they think
well wait a minute I don't want the
slower moving average on with a faster
one because the faster moving average
will follow trend and prey section more
closely and ironically that's exactly
the reason we don't want it when you
want something well think of it this way
if you get a moving average that follows
close with price it becomes useless the
closer it follows price the more useless
it is the moving average they would
follow price most closely would be a one
period moving average basically just
connecting every bar so you don't need
that you could see the the price bars so
whenever you use any kind of indicator
whether it's a moving average or
anything else
the only reason to put it on your chart
is to show you visually something that
isn't obvious just looking at the price
bars so when it comes to reversion to
the mean you actually want to use a
slower and even lagging indicator so
counterintuitive to a lot of people most
people think nope I want the fast
indicator in in my approach to trading I
actually always use a combination of a
lagging and leading indicator and it's
part of my strategy I use the two in
combination together and that really is
optimal but we won't go into all that
right now let's just basically focus on
the concepts so the 50 ma we use as our
intermediate trend indication and this
is the type of thing we normally see in
grams so prices above the 50 I mean yo
retrace here goes up higher highs higher
lows etc okay so that's great that's the
kind of thing we expect in the trend and
if we can continue going up then whether
we see again we see the typical kind of
thing that the market then goes in to
more of a sideways pattern and we see
that by the 50 simple moving average
kind of flattening out because it's a
moving average
we're going to go exactly perfect
straight line that goes horizontal it
will wiggle a little bit but basically
going sideways price action go sideways
this is one type of cycle in the market
by the way most people think of cycles
of being low high low high low and that
is one type of cycle that's the
oscillation type of cycle but there are
actually many types of cycles and one of
them is the trending and non trending
cycles markets go three times where they
trend and then they can go two times
where they are not trending so that's
another type of cycle all right so
that's fine then we continue to go on
let me show you a reversion to the mean
type of example so now we get back into
a trending market 50 I'm a going up
price going up your highest higher lows
all that great that's what we expect
cool works out great come back down now
here is what we're looking at okay this
is a reversion to the mean type of
pattern so now what we have is wait a
minute the 50 I main here is the basic
structure it's a price structure type of
trade and we had a few extra details to
it but here's the general structure of
it so now we get something different
instead of price continuing to go up as
the 50 period simple moving average is
going up we actually have price go down
below the 50 period simple moving
average for the first time and it goes
down pretty hard so it's below the 50
period simple moving average but guess
what the 50 period simple moving average
does not move down it continues moving
up and that's the structure that is the
key price structure now if you used a 50
period exponential moving average or you
used a faster moving average you
wouldn't get this structure because the
moving average will start to move down
and therefore you would not be able to
trade reversion to the mean types of
trades
very well so this is the real structure
here we're looking for price bars below
again an upward angling 50 period simple
moving average and we are looking for it
to then get back to the 50 period moving
average that's our first target by the
way and then sometimes of course it will
go even further and the uptrend will
continue
so this is a basically what's happening
here is a high volatility move to the
downside and a short period of time so
we could create a rectangle with that
that's what I normally do but this is
the structure as you see this is not the
norm so these are trades that they do
set up you can the nice thing is you can
actually scan for these trades pretty
easily so if you have any kind of
scanner it's real easy to basically just
set up a scan that says you know price
bars whether but you want the open high
open low close all that stuff the entire
bars to be well below the 50 period
simple moving average and then you just
put into the scan prices below the 50 ma
and the 50 ma is angling up in other
words you know the the clothes of today
is greater than the clothes of 1 day ago
two days ago three days ago something
like that to have the angle of the 50
period simple moving average angling up
so that simple little scan program that
and whatever scanner you use can help
you find these trades because yeah they
don't set up a lot or all the time but
frankly most of the best trades in the
world are the ones that don't set up
that often they're a bit of an anomaly
and they seem counterintuitive and
that's ironically what makes them
actually work because a lot of people
aren't going to trade that they don't
get it they don't understand the
philosophy the mathematics behind it and
the traits that most people take are the
ones that don't work the professionals
understand you know an anomaly like this
is something that gives you an
opportunity that most retailers are not
going to take
so that's the basic structure now
there's a few other rules around this
which don't have time for right now I
always keep my YouTube videos under ten
minutes but I'll give you all the rules
everything absolutely free we've got it
takes about 26 minutes I've got a video
that I'll be happy to share with you
absolutely free and shows you in about
26 short minutes this which I call the
rubberband trade it's called the
rubberband trade because basically it's
stretching away from the 50 ma and then
it snaps back to the 50 ma and to
sometimes beyond so it's that snapback
that makes me call it the rubberband
trade so to get that rubberband trade
strategy absolutely free just simply
click on the little eye with a circle
around at the top right hand corner of
this video if you're not watching it on
YouTube there's a link below the video
or an opt-in form on the side and once
you do that I'll personally email the
video to you with the entire rubberband
trade strategy with all the rules for
timing all the details that make it
really work well for you
you