The Most Powerful Forex Trading Indicator by Adam Khoo
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The Most Powerful Forex Trading Indicator by Adam Khoo
hi this Adam Coon here and in this video
I'll be talking about the most powerful
indicator used in forex trading you know
a very common question I get asked is
you know and what's the best indicator
to use is it mcdeere's in RSI is it
stochastics is it Bollinger Bands and
the list continues there over 300
indicators now before you even ask about
what indicator to use you have to first
understand how to trade based on price
action and price structure that's the
first thing to understand before even
talking about indicators now if you ask
most professional traders they'll tell
you that they only 3 times you could
enter a tree or the the best free ways
to enter trade you gotta treat
retracements on a trend you treat
breakouts or you treat reversals ok so
let me just review this concept first
with you so you understand the basics
right so the first way you can take a
trade is to tre trend retracements which
means you follow the trend remember that
when you look at currency pairs there
are times they move
in a very strong
trend either on an uptrend or on a
downtrend
and you always want to follow the trend
you wanna buy on the uptrend you sell
the currency on a downtrend now on a
trend the best time to enter is during a
retracement or correction of the trend
so let me come back draw it out for you
ok now first of all how do you identify
an uptrend an uptrend is defined as a
series of higher highs and higher lows
so on an uptrend prices go up and down
riding up and down but every time the
price goes down guess what that's right
you make a higher high then the previous
high every time the price goes
down
you'll make an even higher high then the
previous high every time it goes down
makes an even higher high than the
previous high and this pattern continues
until the trend changes right and every
time the price goes down you make a low
higher than the
previous low price goes down makes a
higher law than the previous low so it
makes a CV some can higher highs and
higher lows so that's the first thing to
recognize when is trending up so over
here you can see high highs and higher
lows so on an uptrend you always want to
enter during a retracement when it's
making a temporary dip or correction on
the trend I always say that in mirrors
are breathing patterns okay so think
about this as
breathing out you breathe
out
now you can't breathe out forever okay
you gotta breathe in before breathing
out again breathe in and breathe out so
you always want to answer on the
breathing in or rather you wanna enter
after it has briefed in just as its
breathing out so breathe in now the
moment is just to breathe out that's
when you want to buy the currency pair
breathes out and exit over there and
that's we call the quick swing trade and
then you repeat that process right so
over here you can see again those are
the higher highs and those are the
higher lows and we can use you know a
moving average or a trendline to all of
the move moving and written trendline as
a level of support to know
when to enter
the trade so every time it breathes in
right the moment it hits a level of
support like a moving average or a
trendline and you see something of
bullish candlestick pattern right it
come by candlesticks with trends with
moving averages so you see a bullish and
golfing you see a pin bar boom you get
in the buy and you enter the tree and
you take profit know where ever you want
to take profit as long as you're risking
one to make more than one you are
profitable right so that's a trend
retracement on an uptrend well the
downside is the opposite run on a
downtrend how's the breathing pattern
breathes out breathe in breathe out and
the trend continues down so the
downtrend
it makes
lower highs and lower lows okay
and I get on a downtrend you always want
to
CEL or shot the currency pair you will
follow the trend so when's the best time
to sell during a temporary retracement
or breathing in so we for the breathing
in breathe in
alright and as it's breathing out that's
when you sell you sell it goes down you
take your profit and you capture that
those people over there so again you
want to use a moving average or
trendline resistance to know when to
enter right so briefs our briefs in hits
a level of resistance on the moving
average or trendline you see some kind
of bearish candlestick pattern like a
Parrish pin bar bearish engulfing boom
enter the tray goes down and you take a
profit somewhere here before the next
retracement pretty simple right so any
professional
trader will tell you that
that's what they do when they trade
trends let's take a look at the charts
over here here's an example New Zealand
all on a very strong uptrend again you
can see the series of higher highs right
making higher highs and making higher
lows right higher lows and all that
right so again you enter when it dips
when it breathes in find support at the
moving average so this would
have been a
very good entry breathe in alright and
find support and that's a candlestick
pattern that's a bullish engulfing
pattern so you could enter right after
the bullish engulfing to capture the
trade all the way up there you could
have also entered on this which is a
bullish pin bar I entered it here as
well these are all times you could have
entered yeah so you can see for this
currency is finding support at the 18
and a different currencies have
different characteristics at different
times
sometimes
the currency likes to find
support at the 18 EMA sometimes the 50
moving average so that's what I teach my
students to know which moving average is
acting as a strong support at any moment
in time here's an example on dollar yen
and is finally support at you can see
the 50 moving average being tested many
many times
so again brief ill or as a brief out
reprieve it right and find support and
again that's a bullish pin bar again
although it's written color it's still a
bullish pin Marcus the long lower shadow
that's a reversal pattern boom you can
enter by there put a stop loss somewhere
there and take
the trip all the way up
this could also be an entry right
breathe out breathe in you've got that
bullish and Duffing pattern over there
enter right after the bush and golfing
boom go up and pick up profit somewhere
there so this is basic stuff right you
know any professional trader will tell
you this is basic 101 stuff this is how
you trade you trade trends you straight
retracement of trends but here's an
example on a downtrend so you can see on
a downtrend clearly making lower highs
and lower lows and for this example you
can see that the 18 moving average again
acting is very strong resistance right
this is resistance and the blue line
very strong resistance very strong
resistance and again over here you can
see breathe out breathe in forms a
bearish engulfing pattern it's a
reversal pattern you
could have taken a
trick right there sell put a stop loss
right about there and very very nice
trade risking one to make two or more
retrace us again again hits the moving
average the 18 forms a bearish pinbar
candle the long upper shadow a sell and
continues there right basic stuff and
again this one way to trade trade the
trend retracement another way
professional traders trade would be to
trade
breakouts right so the price is a
consolidation moving sideways making
same heís making same highs between same
highs consolidating and then it breaks a
consolidation and we ends on the
breakout to capture the new uptrend or
reversal would be finding support
finding support finding support strong
support over here breaks the support and
we take a short to capture the trend all
the
down so what hit so here's what it looks
like on the charts right so this one
dollar yen you can see it had a very
strong level of resistance was
consolidating eventually it broke out of
the resistance with a very strong
bullish candle right so you could have
waited for a slightly tradesmen and then
we've got a bullish engulfing pattern
that confirms the trend direction so we
enter there by got a blip place a stop
loss somewhere there and capture the
trend as you went up this is a short
example again consolidating finding
support finding support multiple support
tested many times breaks the support of
a very strong bearish candle could have
taken a trade sell but a stop loss
somewhere over there right this could be
your stop-loss distance whatever because
it's one arm your risk which could be
you know 20 30 10 pips doesn't matter
and then all the way down so this very
basic stuff right this is what you know
every professional trader will tell you
you in any trading books any trading
videos they'll tell
you that's it right
treat the retracement on the trend or
trade the breakouts but I've got news
for you it is not that simple
it is that simple everyone who takes a
training course or watches a video will
be prof winner markets and most people
are not why yes you know a lot of
amateurs they find that I identify a
trend you know it retraces to a support
I see a candlestick pattern I answer
what happens the trend changes and you
get stopped out or you see it in a
consolidation and it breaks out of the
consolidation of a strong candlestick
pattern Li and too long and again it
reverses they get stopped up it's really
frustrating and you're wondering what am
I missing
what's wrong right so let me show you
visually how that happens so again let
me see that pattern off again higher
highs and higher lows this is an uptrend
right retracing down there's a strong
support level there is a bullish
candlestick pattern I buy what happens
money by poom it breaks the trend
changes the trend they get stopped out
and again it's in a consolidation and
you're watching it strong resistance
over there it finally breaks the
resistance is strong a bullish
candlestick pattern and they enter long
and it reverses back and it gets stopped
out so why does this happen the reason
is very simple it's not good enough to
look at trends
or support levels or
candlestick patterns what's very
important is you must take a look at the
strength of the currency at that moment
in time because even if the currency is
on an on an uptrend even if it breaks up
a consolidation but if it is not a
strong currency relative to other
country currencies you find that the
money enter it will reverse easily so
how do you identify the strength of a
currency compact other currencies well
my secret weapon and one of the most
powerful indicators used by
professional
bank traders is the currency strength
meter with the currency strength we can
tell how strong each currency is and we
always buy the strongest currencies and
at the same time sell the weakest
currencies and that's what gives us the
strongest edge and win rates in the
market let me show you how it works
right now alright so this is the
currency strength meter and as I said
before in order to have the highest
probability of the price moving in your
direction you always want to be buying
the strongest currencies and at the same
time selling the weakest currencies so
how do you measure the strength of the
currencies well pretty simple take a
look over here look at all these
numbers
in the table right now whenever a
currency has a value of 60 and a birth
it's a strong currency so these are the
ones quoted in green there you go all
right and if a currency has a value of
below 40 it's a weak currency and it's
caught in red so notice the ones in red
are all below 40 and the ones in yellow
not strong then what we get neutral so
those are the ones we want to avoid we
only want to buy the green ones and sell
the red ones okay now of course you can
see that some currencies are strong and
weak on different time frames so it
depends on which time frame you're
trading at there's no perfect time frame
different traders like to trade on
different time frames I like to trade on
the 15 minute one hour and four hour
time frame most of the time ok so this
is how it works basically now you can
see from the table right here now if we
look at the four hour time frame we can
see what
are the strong currencies the
dollar is green all right so it's strong
the euro is strong the franc is strong
and the yen is strong on the hitch for
time frame now what's weak what we would
be the pound right the Aussie and the
New Zealand dollar so how do I know
which path will look at to look for the
trend retracement or the breakouts I
always match a green with a red ok so
what could I match now you can see that
euro is really strong euro is green
across all time frame so I definitely
want to be looking at you right now
right so your is strong and what's
really weak what's really weak is the
New Zealand
right so euro New Zealand
this is all green that's already I love
that right so euro New Zealand so
obviously I like to be buying the Euro
because it's a green and selling the New
Zealand which is red so looking at the
euro
New Zealand pair so if I go and look at
the euro New Zealand pair
all right so I'm at the Euro New Zealand
pair and sure enough you can see euro
New Zealand now notice I was cooking it
from the hitch for time frame but I
always take a trip on the lower
timeframe in this case and look at the
h1 time frame and again you can see only
hitch time h1 time frame euro New
Zealand is on a pretty clear uptrend
with the moving averages sloping upwards
in sequence
alright and it's making higher highs and
higher lows and so what am I waiting for
that's right I'm waiting for it to
retrace down right so you can see that
the 50 seems to be a strong level of
support over here so it retraces down if
he hits the 50 moving average as a
support level I've got a bullish
candlestick pattern right that would
give me more confluence in action I
could then taking the trade entering
here and then taking a trade to take
profits somewhere there so again I'll be
looking at this pair right now because
again euro is the strongest currencies
new New Zealand is the weakest
currencies so what are other
combinations that I will trade that I
would focus on for today right so your
New Zealand I could also look at for
example the Aussie versus the franc
right so again all these rate although
sauce is really weak today right Frank
is strong on most timeframes
except the 15-minute that's fine right
so I
look at Ozzie Frank so let's take a
look at Ozzie frame right now where's my
Aussie frame there we go that's the
Aussie friend okay
and again Ozzie its weak so we're gonna
sell the Aussie Frank is green we want
to buy the Frank okay so sell Aussie by
Frank which he's gonna shot the Aussie
Frank pen and sure enough you can see
the Aussie Frank pair is in a very very
strong downtrend I can see recently it
was fighting support and it broke the
support over there and going all the way
down like I said whenever the currency
strength align to the trend the trend
continues all the way down
very strongly all continues up very
strongly in the event of your New
Zealand now what you do not want to do
is you do not ever want to trade two
currencies that are strong or weak at
the same time for
example if you really
stupid to trade the euro yen for example
now why won't you want to trade the euro
area because euro is green and frankly
screen yeah both strong currencies right
so whether you buy the euro yen or you
shot the euro yen it's not gonna go
clearly in one direction because two
strong currents are fighting it against
each other right at the same time you'll
also be very stupid to trade the pound
Ossie or the pound New Zealand because
they are both free currency so they are
both weak currency so again if you train
that pair it's not gonna go very clearly
in one direction it move we so again
always buy the green and sell the Reds
and do it when you see a retracement on
the trend or
break up from the
consolidation when you combine this it
becomes a very very powerful strategy to
achieve high returns of profit and win
rates in your trading so here's a little
peek into our telegram chat group
community we've got over 700 traders who
trade live every single day in this chat
group where we mentor each other we help
each other to find trade setups and you
can see how powerful the currency
strangling that is or quite the CSM
meter right so these were some of the
recent screenshots this from Norbert
numbers from Philippines if I'm not
wrong it says eight-hour today in
case
you're wondering what is and are okay
when you place a trade you either is 1%
risk 2% or is 3% right so that's what we
call an R which is the unit of risk so
you're risking 1% 8 R means an 8% return
on your capital if you're receiving 3
percent in R is a 24 percent return on
your capital so some of my students are
risking
% summers can 3% but we measure our
performance in terms of hours how many
hours did you achieve in a day or month
right so Norman said achieve it are
today
focusing on BFS trees
that's not best friends forever it's
what we call bull flex setups bull flex
surfing right it's one of the strategies
that I teach in the forex trading course
and I'll teach you a bit about how that
works in a short while just hang on
there right on Ozzy Franken New Zealand
Frank thanks Adam for giving us the CSM
indicator currency strike meter helped
me a lot to focus on pasture strongest
trends and this guy Aaron said CSM is a
useful tool today I had I've won for our
right for our and second up they agreed
with CSM I win rate for BFS bull flag
surfing is 70 to 80 percent win
rate
this guy deal from the UK Adam I'm on a
nine blue flag surfing trait winning
streak since using CSM strictly only
taking the strongest currencies against
the weakest very nice to write so you
can see that with this tool a lot my
students are getting 7080 percent we
trade on their Forex traits you know
Davey right this was the first trading
day of the month in my community or
forex traders are starting off from a
bank taking profit on pound Frank just
45 minutes you can see you've got over
700 31 members it's a trade I called out
and people you know that each other for
calling our trades
thanks Adam Congrats thanks for the call
thanks for the call Thank You TV
thanks for course with TBS kick profits
so we've got our own logo with the
purana right so whenever we take profit
we put that log of
the purana yeah
beautiful thanks for the call on Aussie
Frank bouncing off the 18 moving average
1.5 take profit thank you total 3.5 our
win today
total 5.5 our win today five point four
five point two six point seven so if you
are making anywhere from you know tree
to five percent a day you know that
compounds in a month in a year that's
very very good profits as a trader
alright so I know a lot
we're talking about BFS BFS what the
heck is BFS BFS is one of the trading
strategies that we use in our community
and it's called the bull flag surfing
strategy right and as it implies we look
for currencies that are very strong
against very weak currency so what what
are the entry rules okay so the first
thing is the currency strength must be
aligned in this case we are trading the
Aussie yen so we all make sure the
Aussie is green and the yen is red right
so we buy the Aussie we sell the yen
which means we are going long the Aussie
and pair next moving averages must be
sloping up right now sloping up moving
averages going up candles are surfing
the EMA what does that mean so what that
means is we are looking for oops
yeah we're looking for pattern where the
price is surfing bouncing off one of the
moving averages you can see surfing this
moving and the six EMA right surfing
right and what we're looking for is
after a strong impulsive wave co-active
candles are making lower highs right so
in other words after strong breathing
out you will see breathe in breathing in
with lower
hands lower highs lower highs
lower Heights lower highs lower highs it
must keep making correctly candles
between lower highs the moment it makes
the first higher high we place our buy
order here at 84 or nine we place our
stop loss at 8401 somewhere below this
candle with a risk of 8 pips in this
case and we place our profit target at
84 25 which is double always so we're
always risking one our to make two are
risking eight tips to make 16 pips or
risking 30 pips to make 60 pips depends
on a trade setup so we enter the trade
of
here one two three four five six seven
eight nine ten in ten candles we're
taking profits that's about two and a
half hours right so our exit rules are
pretty simple we ID we either exit with
a loss losing one R or we exit for
profit making 2 R and again with the
currency
strengths
following the trend with the candlestick
pattern your win rates are really high
allowing you to achieve consistent
profits over there now if you're
interested to join our Forex community
or private community you like to get the
currency strength meter
it all comes with the professional forex
trading course which you can enroll for
at Piranha profits comps so good hit two
pure profits con-com find out more about
how you can enroll and join us in this
community to get the indicator to get
the trade setups our trade alerts on a
daily basis and you know to complete
your journey as a successful forex
trader so many markets be with you I
look for to seeing you in the chat
groups on the
online video tutorials
take care see you soon hi if you enjoyed
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adam khoo,adamkhoowealth1,wealthacademySG,technical analysis,wealth academy,AKLTG,forex trading,forex pairs,forex trading strategies,forex trading for beginners,trading psychology
