I was talking to a fellow Courtney's Forex Trader yesterday and she was saying that she was doubled whammied until she blurred. And of course, I can relate to that feeling.
Though my own experience and discussion with Courtney, I realised that Double Whammies can be prevented by finding reasons NOT to trade. And thank goodness to that I have safely avoided 2 Double Whammies :) One being yesterday GBP/USD Inside Day trade. If I have taken it, I would be sitting on a Double Whammy (DW) today.
So just how to avoid DW? Courtney taught me 3 things but it is NOT a confirmed thing ok? And in a ideal situation, all the 3 indications are to be positive before we take the ID.
- Look at ADX. There should be a upward trend. Why? When there is a trend, most likely it will not close back where it started.
- Look at the Average True Range (ATR) 40 indicator. Ideally, there should be an increase of volatility than yesterday and shouldn't be the lowest of the past 40 days of ATR40.
- Lastly, Look at the opening and closing positions of the bar. Are they forming a near perfect T or t inverted T? if they are, then most likely the next day will form the same thing. This is an indication of a Sideway market where neither the bull or bear are winning. Hence, less likely the next day will close higher or lower.
Ok. There you go. With these tips, I hope that you can really avoid DW as much as possible. :)
Max
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