Sweet GBPUSD levels
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Here is a very simple trading method which you can use to trade the GBPUSD. We will be taking the daily OPEN of the GBPUSD for this method and we are going to place pending orders at specific key price levels which we are going to calculate from the DAILY OPEN price.
These key levels are static fibonacci levels starting from the DAILY OPEN. We will calculate these levels using the formula below and we are going to place a horizontal line at each of these levels for a visual representation of them and ease of use. You can skip these calculations and use the indicator attached at the bottom of this post and the indicator will draw these lines automatically for you. However, it is always good to know how these price levels are calculated and here is the formula:
An example for GBPUSD:
Today Open = 1.9634
Add Horizontal Line above Today Open :
HL1 = 1.9634 + 34 = 1.9668
HL2 = 1.9634 + 89 = 1.9723
HL3 = 1.9634 + 144 = 1.9778
Add Horizontal Line below Today Open :
HL4 = 1.9634 - 34 = 1.9600
HL5 = 1.9634 - 89 = 1.9545
HL6 = 1.9634 - 144 = 1.9490
If you have used the indicator, it would have draw these very same levels for you. So you can either calculate these automatically by placing the indicator on the chart or by calculating and drawing the lines manually from the formula above.
If you will use the indicator, you will need to follow the following procedure to get the indicator to work properly:
Insert DayOpenFib indicator TWICE on the chart on any timeframe which is smaller than H4.
-Set it the First time and put parameter 'up'=true
-Set it the Second time and put parameter 'up'= false
After you have done this correctly, your chart should be looking similar to the one below with all the lines neatly drawn and therefore, you just have to place the orders.
After you have place these levels on your chart, now you will need to place the pending orders... please note that you just place these orders once per day and you close them at the end of the day. Whatever and however the situation of these trades at the end of the day.
The Order Placement Rules are as such:
Place Buy Stop order at HL1, SL = Today Open, TP1= HL2, TP2 = HL3.
Place Sell Stop order at HL4, SL = Today Open, TP1= HL5, TP2 = HL6.
And IF...
A Buy stop order is executed, then MOVE the Sell Stop order to Today's Open, SL = HL1, TP1= HL4, TP2= HL5.
And you do the opposite if Sell Stop order has been triggered and executed.
This is it... Place the orders, close the terminal, enjoy your day, come back before the daily bar closes on your broker and close all your trades. As you can see, these are very simple trading rules for a simple trading method. If you use a good money management with it, it will definitely help you make many pips out of the market. Also, you can see that this system is 100% mechanical. There is no place for trader's discretion with this method... SO, definitely, this will be less stressful for the trader. Get a demo account and do some practice as this method is a potential money maker. After you have gauged the system for a while, then you can make the decision to trade this method with some real money or not. Good reading and lots of pips.