Welcome to Momentum Trading setup

Trading setup on MT4 at OCTAFX { Leading Transparent FXBroker in INDIA }

 What Indicators and time frame do we need to trade this setup ?

Indicators Used are as below :-

1) Exponential Moving Average ( 2 in no one being 20 EMA and other being 200 EMA )

2) Time frame of the chart as 5 minutes.

3) Trail stop is all inbuilt no the OCTAFX mt4 and mt5 to book our concurring profits.

4) EMA cross indicator alert .

Why do we take EMA and not just SMA ?

EMA gives more importance to the nearing price trend which is currently taking place where in SMA is just the
average of N duration of days .
 FIRST QUESTION THAT COMES HOW LONG TO KEEP WAITING ? FOR TREND TO
FALL IN OUR GUIDELINES.

I assume that all of us trading FX have a laptop in our nearing vicinity even while we are working on something
else. What needs to be done is, you need to setup a EMA cross over indicator with sound alert on it. So when
ever the cross over happens on any pair you shall be alerted and you can then concentrate on the chart. As this is
happening on a 5 min chart you need to struggle longer for expectation to trade. Only 2 things are possible
either you enter a trade if tradable situation happen or you discard the chart temporarily stating non trade
conditions formation.

Why we trade 200 EMA VS 20 EMA and not 50 EMA vs 20 EMA or 50 EMA vs 9 EMA ? The reason being that if
you use other combinations, you are more likely to be caught in consolidation states and a large no of trades
would appear major being non rewarding or non performing. { I shall show you in live presentation of mt4 and
mt5}

Why Trail using trailing stop option given in OCTA FX mt4 or mt5. Trailing helps us secure profits incase sudden
trend reversals. It helps us atleast cover our profits by breakeven’s.

I shall attach all indicators at the end of the session for all of us here.
 Momentum trading on volatile pair GBPJPY under ideal conditions.
Why Trade Momentum ? Because momentum is
created by volume and volume moves the price. { Basic Logic }

What’s the aim from such setup ? Aim is to be in

the direction of the volume traded . Every one says ride the

trend/follow the trend, but not all tell you how to find the trend.

What time frame to look on & why so?

5 minute time frame as it fits the requirements of intraday trading

. Large trades executed create momentum but to be a part of

that momentum we need to be at a space where we can look that

momentum coming up.

Why 200 EMA and 20 EMA and not SMA’s ?

200ema is industry standard and it carries real time sentiments of

the price hence its applied at close price so that we know it’s a

real resistance acting upon. 20ema very much linked to the actual

price movement hence we follow it.

Being ideal condition, we keep the stop loss at high of breakout-

candle. As its ideal condition which portrays strong trend, and

reversal is rare to happen and hence we limit our losses.

 Momentum trading on volatile pair GBPJPY under non-ideal conditions.
How it works & what’s non ideal condition.

The non ideal condition is when the second

candle overlaps the breakout candle above the
15 % body ratio { I here include even the wick
below the body as a full candle,- hence its non
ideal} we have to keep trailing stops very low as
anytime the trend can reverse back completely,
that way be save our earned profit from being
wiped off and at-least we try to come closer
near the breakeven or being bit profitable.
Second example of non-ideal condition on GBPJPY
Non ideal condition on EURJPY
Working all together in real time on EURUSD
USDJPY TRADING CONDITION NON IDEAL YET PROFITABLE
Momentum trading on volatile pair USDJPY under non-ideal conditions.
Momentum trading on volatile pair USDJPY under non-ideal conditions.
 Trading Phycology and why it matters ?
Trading requires 2 types of activities.

1) financial study of the instrument.

2) Psychological study of the instrument.

Firstly I would like to say preservation of capital should be first impact on the brain when it comes to any financial trading instrument.

Secondly smart leverage utilization should be the goal. adequate margin should be left in order to squeeze the juice from a rewarding trade.

do not try to concentrate on a multi level chart at the same time. 1 goal at a time. and once a trade is executed and completed, then we can always look at
other chart.
ALWAYS KEEP IN MIND THAT WE CANNOT FIGHT THE TREND AS TREND IS SUMMATION OF MANY FORCES AND WE SHOULD NOT BE AGAINST IT. RATHE
WE HAVE TO INDENTITY IT AND CLING TO IT.

First develop a strategy in mind and map it on paper. Secondly follow it strictly on what so ever the conditions the rules should not be broken. if the stop loss
is nearing let it hit. if the take profit is trailing let it trail. do not intervene the process ones its initiated. after the process is completed do the SWOT analysis
why did you win and why do u loose.
IF THE STRATEGY NEEDs no further development and is able to provide sustainable and good equity gains then you should move to automate it and both
OCTA FX mt4 and mt5 are very much automatable.

Psychological study of the instrument.

always try to listen to something that is super inspiration before sitting for trading. incase your mind is not in your control please avoid trading that day. it
shall only break you down and make you revenge your anger over the markets which shall lead to higher leveraging / ransom trading.
incase you are very much addicted to trading for example like when ever you want to sit on system you want to trade it.. then i prefer have 2 accounts 1 with
larger capital and one with very small but reasonable capital. so when you are at a hyper trading mood shoot the account which is low on balance and when
the trade is over you would come to know what you could do with the trade on real account based on positive and negative consequences.

what do the world largest fund managers make ? 30 % per annum is their max peak. which compromises of various trading strategies including long&short
term trading strategies which are calculated based on longer charts time frames such as 5 minutes to 1 day time frame .
they trade hft which yields them even 50% per year with a limited draw downs but this 50 % capital is a part of large capital which accumulated and makes
the 30% yearly growth ratio of hedge funds big