15 Minute Forex Trading System For Beginners
We’ve done a lot of talk about forex trading strategies for beginners on our blog, but today I’m going to outline a specific method that only takes 15 minutes to implement. This is a very easy method indeed but you do need to know the basics, such as the terminology and how to actually conduct a trade. If you don’t know this yet, simply pick up our ebook (sign up right) and read before continuing in this article. Let’s get to it.
Table of Contents
- 1 The Top 19 Forex Trading Signals For Beginners
- 2 Long legged Doji
- 3 Tweezer Tops and Bottoms
When you start your forex trading career, whether you are trading £10 or £10 million, the most difficult thing to do ISN’T to make your first profitable trade. Most people believe it is, but they are 100% wrong. The most difficult element is repeating the system you used to make this trade profitable. If you can repeat the system and make a profitable trade 60% of the time, you will be laughing all the way to the bank.
Below are the strategies I recommend for beginners. All can be used in as little as a 5 minute period and hence the name of the article – 15 Minute Forex Trading System For Beginners! Although this is for beginners its important to remember that these strategies generally work, no matter how advanced you are! So what I would recommend is looking through the systems and strategies below, in full, and then implementing the ones you are familiar and comfortable with.
The Top 19 Forex Trading Signals For Beginners
Doji Forex Strategy
Below is a screenshot from the video itself. It shows the basic principle of the Doji. The Doji is the “+” element indicated in the screenshot and is very common in currency pairs. The Doji principle was invented originally in Japan to track the movement of the rice market. But nowadays a Doji candlestick can be the easiest way for a beginner forex trader to make their first profitable forex trade.
A Doji that occurs in the middle of a support/resistance model should never be traded. That’s a quick way to lose a lot of money. But a Doji that occurs on a support level should be traded, as is the case with a doji that occurs at resistance. Although the screenshot above over simplifies the charting model, the majority of markets will have support points very close to each other, giving it the candlestick look.
In the above example if the instead let the market come to you, wait for a close below the Doji low and then open your short position (in the screenshot above) or long if the Doji occurred at the support level.
Stop Losses – When placing your stop losses you need to answer 1 simple question. At what price was I wrong? And hence should I get out. In the screenshot case above, a candle close above the Doji high would invalidate a reversal signal, and hence your stop losses should be placed slightly above this level. Such as below.
A Dragonfly Doji forms when a sessions open and closing prices are at or near the session high. It is a bullish reversal signal, so we will only look for it in a down-trend [image right from onlinetradingconcepts.com] Generally a dragonfly doji indicates indecision in a market. Meaning a bull or bear market was active in the start of a session before being pushed back to the starting price by the end of the session. This makes the Dragonfly like image on the chart and hence the name.
Although a rare signal, a dragonfly Doji usually means a trend is about to change.
Gravestick Doji – The gravestick Doji is the exact opposite to the dragonfly Doji.
Long legged Doji
A long legged Doji is a candle that had the same open and closing price in a session. This means it has very long shadows on both sides. This candle signal shows complete indecision in the market. If you see this signal on its own you should not make a trade as there is too much indecision in the market. Candlestick values are only valuble when looked at in the context of the pair. A Doji in the middle of a range is something you shouldn’t trade on. A Doji on a support or resistance levels is something that can be traded at, although additional research should be made. [image from stockcharts.com]
Generally Doji’s show indecision in the market and hence a potential change in the direction a curency is heading. Below we will talk about the exact opposite of a Doji.
A marubozu is the exact opposite of a Doji. This shows total conviction in a market’s direction. [Image from incrediblecharts.com] This means that a Bullish marubozu makes the session’s opening price the low price. The closing price is equal to the sessions high. A bearish marubozu is the opposite.
The marubozu candlesticks don’t have any trading implications on their own, however they can be helpful when reading certain situations such as breakouts or reversals.
As the price breaks the resistance level the bullish marubozu shows there was no selling pressure by the bears and hence the larger probability that the breakout has been successful. A bearish marubozu at resistance could mean a complete change in the market trend, leading to further decline of a price.
A hammer is a bull-ish reversal signal. A small real body, a small or no upper shadow and a large long lower shadow. For it to be an official “hammer” the lower shadow has to be at least twice the size of the upper shadow. [Image from Dailyfx.com]
As this is a bull signal, we will only look for it in a down-trend. This is how a typical hammer looks and is usually a signal for a reversal in a market. An even stronger reversal signal is where bull has managed to push the hammer signal above the sessions open, and close at sessions high. A hammer seen at support is a very strong reversal signal..
The Hanging Man
The hanging man is the exact reverse of the hammer and appears at the resistance of a price. Generally the hanging man is seen as the opposite of the hammer and hence you should expect a price reversal but remember that the hanging man forms the same way as the hammer, so after the price has been trending up for a while, bears start to push the price lower, but bulls manage to push the price up closer to its open. So this doesn’t actually show the market is ready for a price lowering. Generally I would personally avoid trading on a hanging man, or use very tight stop losses if I did decide to trade.
A shooting star is a bearish reversal signal. It has a small real body, very small or no lower shadow and a long upper shadow (at least twice the size.) SS forms when bull pressure is rejected at a high when bears start to push the price down. The reversal signal gets even stronger (similar to the hammer concept) when the bears push the price lower than the open and close at the sessions low.
Similarly to hammer, shooting star has its own twin at the other side of a market. This is called an inverted hammer and can be seen during a down-trend. And again similar to the hanging man this is generally a signal I avoid as its considered a reversal signal, but when you think it doesn’t actually have the traits with a receding market. When trading reversals we really want to see a change in the market, and not a “potential” change.
Bullish Piercing Pattern
The bullish piercing pattern is a 2 candlestick bullish reversal signal. The first candlestick is a long bearish candle, the other one is a long bullish candle that has closed above the midpoint of the first candle. The higher the secondary bulls have managed to close the session the stronger the reversal signal. Note: Both candlesticks must have large real bodies. Small bodies or large shadows do not make a bull piercing pattern.
As this is a bullish reversal signal we will only look for it in a downtrend. [image from: TopStockResearch.com]
Dark Cloud Cover
Is a 2 candlestick Bearish reversal pattern, this is the exact opposite of a bullish piercing pattern and usually leads to a reversal. The second bear candlestick must close below the first candlesticks mid point, the lower the price is pushed the stronger the reversal signal. Both candles must have long real bodies. These can only be formed in up-trends and not downtrends.
Bullish Engulfing Pattern
Is a 2 candlestick bullish reversal signal. The first candlestick is a bearish one, it doesn’t need to have a large real body, but the signal is stronger if it does. The second is a long bullish candle that completely wraps around or “engulfs” the first candlesticks real body. Both candlesticks can have small shadows too, the important element is a large real body. This is a very strong reversal signal. Not only does the second candle stick show a change in the marketplace, but it also manages to close above the previous sticks open. The signal gets even stronger if it wraps multiple candles. We will only look for this in a downtrend.
Bearish Engulfing Pattern
This is the reversal of the above pattern. We should only look for this in an uptrend. Both signals are very strong and should be traded on.
Tweezer Tops and Bottoms
Is a 2 part bearish reversal pattern. It consists of 2 candlesticks that have approximately the same height. Technically tweezer tops do not need to have long upper shadows, but the signal is stronger if they do. Generally the longer the length of the upper shadows the strong the signals. This is where the second candlestick closes near or at the sessions low. Candlesticks can also be reversed. Tweezer tops is a bearish reversal signal so we will only trade it in an uptrend. Tweezer bottoms is a bullish reversal signal. This is a strong reversal signal as any time the support or resistance level is tested without a breakthrough, it gets stronger. [Image from OnlineTradingConcepts]
The Morning Star
The morning star is a 3 candlestick bullish reversal signal. The first is a long bearish one. The second candlestick is a small candle perfectly it would be a dojo, the third is a long bullish candle that closes above the midpoint of the first candle. As this is a bullish reversal signal we look for it in a downtrend. The signal gets even stronger if the 3 candlestick is a bullish engulfing candlestick. [image from dailyfx]
On the other side of the trend, we can find the opposite signal which is called the evening star, the first is a long bullish, the second is a small candle (ideally a dojo) and the third is the long bearish candle that closes below the mid point of the first candle.
Three White Soldiers
The three white soldiers is a three candlestick bullish reversal signal. All 3 candlesticks have large real bodies and small or no shadows. The first candlestick is usually a bullish piercing or bullish engulfing candlestick. The second candle should be larger than the first and the 3rd candle should be at least the same size or bigger than the second.
Three Black Crows
This is the exact opposite of the three white soldiers system and hence a bearish reversal signal.
Although both of these signals usually occur too quickly to profit from, they can be excellent triggers for telling you when to get out of any existing positions you have.
As with all of the candlestick signals displayed above, these are valid only at the support or resistance levels.
Three Inside Up
Is a three candlestick bullish reversal pattern. The first candle is a large bearish candle. The second is a bearish candle that closes at least at the mid-point of the first candle. The third is a bullish candle that closes above the opening price on the first bearish candle. [Image from FXwords.com]
As this is a bullish reversal signal we will only look for it in a downtrend.
Three inside down
As you’ve probably guessed this is the opposite trend. This is a bearish reversal pattern. And you should look for this in an uptrend.
The Rising Three System
This is a 5 candlestick Bullish continuation pattern. The first candlestick should be a long bullish candle, the following 3 should all be small bearish candles that fall within the range of the first bullish candle. The fifth candlestick is a large bullish candlestick that closes above the first candlesticks final closing price.
The Falling Three System
This is a 5 candlestick bearish continuation pattern. The first is a long bearish candle, and is the exact opposite to the rising three system. We should only look for this in an uptrend.
That’s all folks. If you had no idea what we just outlined then read this first!
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