Larry Williams's forex trading strategy
Larry Williams is a well-known stock trader and creator of many indicators as well as trading systems. With one of them we will introduce the reader in this article. Larry Williams 'trade strategy, offered by us, works using two moving averages and is fairly easy to apply.
forex trading strategy description and features
Larry Williams 'strategy, which we propose to consider, works with trend lines. Therefore, the trader needs to find places on the forex chart where the price has a clear direction of movement. Naturally, the forex indicator is used for this purpose.
Two moving averages with the same period 3 are plotted. But the difference between the two is that the former will be built on price lows and the latter on highs. As a result, a corridor should appear on the chart as on the screenshot below.
Both moving averages follow the price and from time to time it goes beyond a given corridor. But another thing is important to us. First, the indicator itself indicates the direction of movement. Second, in combination with candles, it will allow to find turning points and open deals with rather high accuracy.
A feature of this trading system is that in principle, it is quite simple to understand and work, although at first glance it does not seem so. But in fact, those who learn the theory well will be able to easily use it in any situation.
Rules of an entrance
To enter the deal, it is recommended to pay attention not only to the moving averages, but also to which candles are formed on the chart. Typically, the trend ends when the price no longer updates the lows or highs (depending on the direction of movement). Consequently, once this happens, Forex 's trader can prepare to open a deal.
In the first case, we end the uptrend. A green candle punches the upper sliding average (which is built by price highs). Opening the deal right here will be risky, as we need to wait for confirmation that the second candle (bearish on the chart) will not go beyond the first and close below. After we get such confirmation, you can start working for sale.
It is possible to close the open short position when the minimum of the bull candle is above the minimum of the bear candle (situation 2). In this case, it can be said that the downward trend is stopped, at a minimum.
You could open a purchase deal here. But then the trader will have to be patient and wait until point 3. Or, skip these fluctuations and try to get into a long position later. At point 3, the long position can be closed. Further, following the basic instructions of this forex trading strategy, you can open deals for purchase and sale, the main points we have demonstrated. It won 't be that difficult to do that. The most important thing is to make decisions in time.
On this, we conclude Larry Williams ' forex trading strategy description. It should be noted that it is quite profitable and therefore can become the main in the arsenal of any trader. But, as far as you could see from the description, those who use this system should be patient and try new systems in our catalogue, for example, the strategy Sniper Pavel Dmitry.