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J Journal of Stock & Forex Trading ISSN: 2168-9458 Research Article

Analyzing the Effectiveness of Confluence of Price Action Disciplines in Forex Market Md. Chhali Uddin* Jashore University of Science and Technology, Jashore, Bangladesh

ABSTRACT The purpose of this project is to systematically develop a sustainable and profitable trading strategy based on price action in the foreign exchange market. This study is looking for measuring the effectiveness of confluence of price action disciplines. Price action confluent levels provide the cleanest view of in Forex market and help traders make subjective trading decisions based on the recent and past price movements instead of relying solely on technical indicators. In this paper, a trading strategy based on price action confluence is constructed and tested on 10 pairs from July 01, 2020 to 23rd December 2020. We used a 5,000 USD demo account to trade the pairs on the MT4 platform and a total 267 trades were placed during the test period. After collecting all the trading related data, we would calculate the profit and develop a profitable trading strategy. The results obtained from this paper should be applicable to other international markets as well. Keywords: Foreign Exchange Market; Forex trading system; Profitable forex trading strategy; Forex price action strategy; Technical analysis

INTRODUCTION difficult. Because no single strategy or indicators ensure consistent and satisfactory results over a subsequent period [6-8]. The foreign exchange market, which is referred as Forex, is the market where a nation's currency is exchanged for that of another. We have addressed this problem and developed a systematic The Forex market is an online, Over-the Counter (OTC) market in approach to trade foreign exchange market based on confluence which the participants can trade 24 hours per day [1,2]. According of disciplines. Confluence areas of price action to the data from the Bank of International Settlements (BIS) Forex disciplines are defined as levels where more than one pattern shows Market is one of the fastest-growing sectors of financial markets the same direction. The different levels of price action work best in and the daily FX accounted for $5.1 trillion in 2016. So, markets with high liquidity. Forex market has the highest liquidity the daily Forex market turnover is multiple times higher than the in the world and it produces some of the best price action levels trading volumes on any capital markets [3]. Nowadays, anyone can than any other financial markets. trade in Forex market through the internet and interbank networks Our method works as follows: at first, we have constructed our which made more people come into this market. own trading strategy using a combination of various disciplines According to report, the majority of Forex traders fail to survive of price action (Japanese candlestick, support & resistance, trend and leave the market within six months to a year [4,5]. The lines, channels and chart patterns) strategy which includes entry French financial markets regulator, (AMF) released a study result and exit rules of a trade, money management and risk management in October 2014 which showed the rate of clients losing money strategy. Then, from July 01, 2020 to 23rd December, 2020, we exceeded 89% (surveyed 14,799 active clients), with an average loss have used that strategy in real market using MT4 platform. We of €10,887 per client. have executed 267 trades with ten pairs-EURUSD, USDCHF, GBPUSD, USDJPY, USDCAD, AUDUSD, EURJPY, NZDUSD, Foreign exchange market is difficult to predict. Developing a XAUUSD, and XAGUSD-to develop and evaluate our trading successful trading strategy for forex trading remains a significant strategy [8-9]. challenge for both traders and economists. One of the most difficult aspects of forex trading is finding a systems, strategies, or We have to acknowledge that the magnitude of analysis needed indicators that might work best for traders. There are numerous to understand forex market is considerably greater than any other ways of speculating the market which makes this journey even more markets. To trade in Forex market with price action, a trader does

Correspondence to: Md. Chhali Uddin, Lecturer (Marketing), Jashore University of Science and Technology, Government of the People’s Republic of Bangladesh, Telephone: +8801930580660; E-mail: [email protected] Received: January 19, 2021; Accepted: January 19, 2021; Published: June 23, 2021 Citation: Uddin C (2021) Analyzing the Effectiveness of Confluence of Price Action Disciplines in Forex Market. J Stock Forex Trading 9:570. Copyright: ©2021 Uddin C. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.

J Stock Forex Trad Vol. 9 Iss. 4 No: 270 1 Uddin MC. OPEN ACCESS Freely available online not need to be informed about the world’s social, political, and Key forex definitions economic situations, because price action trading strategy ignores The following are the key forex-related definitions: the fundamental factors and emphasis solely on price movements. Every minute, hour and day, the Forex market is paving its own Pip: The lowest increment in which a currency pair is priced. road. If we know how to read it then this road can become our road EURUSD is 1.1820, when it moves to 1.1821 then it calculated map to predict the future price movement. By studying the highs and 1 pip move. lows of the recent and past prices and levels, we Spread: The difference between the Bid price and Ask price for a can construct a general idea of what price may come next [10]. currency pair. We believe this detailed guide of price action strategy would help Leverage : It allows a trader to trade with higher amounts with less Forex traders to identify profitable trades, and control risk by capital. A leverage of 1:500 means a trader only need 200 USD to utilizing appropriate strategies. The result of this research can be place a 1,00,000 USD trade. useful for Forex brokers, dealers and any financial institutions. Exchange Rate: It is the value of a base currency against a quote BACKGROUND currency. What is forex? Bid: The price at which the market maker/broker is willing to buy The Forex market which is usually known as “forex” or “FX, is the currency pair. a global decentralized market for the trading of currencies. It Ask: The price at which the market maker/broker is willing to sell includes all aspects of buying, selling and exchanging currencies the currency pair. at current or determined prices and remains open twenty four Forex trading sessions hours a days, five days a week (Sunday 5pm EST through Friday 4pm EST) and all year round. Trading starts from the Asia-Pacific The 24 hour Forex market can be broken up into four major trading region followed by the Middle East, Europe, and America. It is the sessions. Below are the open and close times for each session: most liquid market in the world and in terms of trading volume; • New York Session: Opens at 8:00 am and Closes at 5:00 pm it is by far the largest market in the world. The main participants EST (EDT) in this market are the larger international banks, central banks, institutions, governments, hedge funds, corporations and private • Tokyo Session: Opens at 7:00 pm and Closes at 4:00 am EST speculators and retail investors. Since currencies are always traded (EDT) in pairs (EURUSD, GBPUSD), the Forex market does not set any • Sydney Session: Opens at 5:00 pm and Closes at 2:00 am EST absolute value of a currency but determines its relative value by (EDT) setting the market price of one currency with another. • London Session: Opens at 3:00 am and Closes at 12:00 noon Forex Market is one of the largest financial markets in the world EST (EDT) with $5.0 trillion average daily turnover which is more than 12 And so, there are some hours when two sessions overlap each other: times higher than the average daily turnover of global equity markets. The volume is 50 times higher than the average daily • New York and London Session: 4 hour overlap between 8:00 turnover of the NYSE and the annual turnover is 10 times higher am-12:00 noon EST (EDT) than the world GDP. The spot market accounts for over one-third • Sydney and Tokyo Session: 7 hour overlap Between 7:00 pm- of daily turnover. 2:00 am EST (EDT) Like any other market in the world, the prices of the currency • London and Tokyo Session: 1 hour overlap between 3:00 am- are set by the supply and demand of sellers and buyers. However, 4:00am EST (EDT) there are other macro factors that play in this market. Demand for The best time to trade forex market is when there is an overlap particular currencies is also influenced by political events, economic ongoing between the sessions. During overlaps, the in the growth, inflation and other economic factors like interest rates, market increases which results in greater opportunities. More than central bank policy etc. Many events and reports like GDP growth, 70% of the total trades happen during the U.S./London markets unemployment levels and retail sales detail the levels of a country’s which is the heaviest overlap within the markets. economic growth and health. What is price action? How to read a forex quote? Price action is the study of price movements in a market, with A forex trader might buy U.S. dollars (and sell Pounds) if she no indicators required. It is a trading technique that allows a believes the dollar will strengthen in value against Pound. If the trader to read the market to identify any clues on where the pairs move in the desired direction then she makes profit. market could move next. With price action, traders ignore the The forex market uses symbols to designate currency pairs such as fundamental analysis factors and focuses more on recent and past the pound is symbolized by GBP (First two letter symbolizes country price movement. They find support and resistance, trend lines, and name and last letter symbolizes currency name), the U.S. dollar is assess where the price is in relationship to these geometric points. USD, and so the Pound/U.S. dollar pair is shown as GBP/USD. With indicators and indicator combinations, the variations and The currency on the left (GBP) is the base currency and is always the outcomes are endless. No two traders will interpret it in the equal to one unit and the currency on the right (USD) is called same way, as each will have his or her own interpretation, rules and the counter or quote currency. The value of GBP/USD is 1.2820 strategy. The reason price action works well, is because everyone which means 1 Pound is equals to 1.2820 USD [5-9]. is looking at the same chart, and same time frame. A daily chart

J Stock Forex Trad Vol. 9 Iss. 4 No: 270 2 Uddin MC. OPEN ACCESS Freely available online of GBPUSD looks the same on our chart as it does to every other effort to find so we should not try too hard to find these areas of trader around the world. When a large percentage of traders have confluence. Let’s have a look on the intersection of a few price the similar levels on their charts, then the price action respects action levels USDCAD 4 hour chart (Figure 1: USDCAD 4-hour those levels. confluence chart). Price action trading has various disciplines which can range from We can see how the trend line intersects with a candle resistance Japanese candlestick patterns, support and resistance, trend lines, level and channel resistance which gives us an area with three channels, price bands, break-outs, high and low swings, and chart intersecting levels as opposed to just one standing on its own. patterns. Of course, there is never any guarantee that the USDCAD will What is confluence of price action disciplines? bounce back from that level. Instead it may end up blowing right through this confluence of resistance. But the high number of According to Merriam-Webster, the word confluence means: A selling pressure developing in the area ultimately results in favor coming or flowing together, meeting, or gathering at one point. of the bears. Confluence signal incorporates several technical analysis methods Looking for intersection of key levels is an excellent way to find and thus it becomes a very powerful trading strategy. Confluence high probability setups because these areas of confluence tend to of price action trading is simply combining more than one trading attract more buyers or sellers resulting in a reversal or continuation technique or analysis to increase the odds of winning on a trade. of the current trend. In the world of Forex trading, the term confluence refers to the intersection of two or more key levels or areas of value. The FOREX TRADING STRATEGY SET UP advantage of confluence comes down to probabilities. Which A successful Forex trading strategy is one of the most important means the trend lines, horizontal levels, and even channels form aspects of Forex trading. It requires putting together multiple in a level or zone and give traders a better entry signal as these aspects to formulate a trading strategy. It involve sitting in front of intersections provide some of the best zones to watch for buying a computer screen, analyze the markets, looking for trading signals and selling opportunities. The number of market participants are and taking decisions whether to buy or sell and executes trades. more likely to gather around in an area where two or more factors In order to make profit, traders need to identify hidden strength signal for a same decision. and weakness of the market and should focus on eliminating the number losing trades and achieving more consistent and profitable These intersections are usually formed by the following: trades. • The formation of any Pin bar, inside bar or engulfing bar in We would set up a checklist that we follow before we take any the chart trades. The combination of price action levels is not the only • The crossing of a trend line and a support and resistance level criteria for entering a trade. There are several other confluence factors that come into play to achieve the most profits while using • The crossing of a channel, flag pattern or any other chart patter the least amount of risk. The most common type of confluence occurs when a trend line There are several factors such as trading with the trend, using intersects with a horizontal support and resistance level. These are proper price action signals and always maintaining a proper risk to the most used areas to watch for buying or selling opportunities. reward ratio (1:2 or 1:3). So regardless of how good a setup looks, Although the best area to watch for entry opportunities are those we always have to remain disciplined and use an appropriate stop formed by a trend line, a horizontal support resistance level, and loss strategy. After all, as Forex traders we only have two options- a Fibonacci. When we find such a combination, it will be a wise buy or sell. decision to keep that pair and level on our watch list. By using a simple checklist, we will be able to quickly and easily We have to keep in mind that some of the best areas of buying identify the best setups. There are eight steps that should be taken or selling opportunities are obvious and therefore require little into consideration before we place any trade.

Figure 1: USDCAD 4-hour confluence chart.

J Stock Forex Trad Vol. 9 Iss. 4 No: 270 3 Uddin MC. OPEN ACCESS Freely available online Step 1: Moving to the daily time frame funds. So instead of trading against them we would rather trade with these guys. As we will follow the price action trading strategy, we would follow a very simple trading strategy which allows us to make profit in Step 4: Watching for price action signals both the bull and bear markets and without any indicators. So we In the previous steps we have identified key support and resistance will start analyzing the charts with time frame. levels and evaluated the market’s using the daily time The daily charts offers a bigger picture of what’s happening with frame. Now we are sure whether the market is in an uptrend, a the price action and provides more reliable signals. We can use the downtrend or range-bound. 4-hour charts and 1 hour chart for , but the daily charts If the market is in an uptrend, we would to begin watching for buy work best. signals from key support and if it is downtrend we would do the Price action signals are more reliable once we move from the lower reverse. time frames to higher ones. When we use New York close charts, There are three types of candlestick patterns we look for during a the last hour of each session (4 pm and 5 pm EST) can be extremely trading week namely pin bar, engulfing bar and inside bar. While helpful in determining a market’s likely path forward because it looking for trade setups, we have to be sure that we have scanned shows whether buyers or sellers won the battle for that day. the charts properly and there is a confirmation with the price We have to keep in mind that the daily time frame will usually give action signal. us the best signals as we are trading with price action. Step 5: Watching important news, speeches and events The London and New York sessions tend to be more liquid than As soon as we have completed all the steps earlier, then we have the Tokyo or Sydney session. But as we are trading at a higher to check the economic calendar for that day and the following time frame such as the 4-hour or daily time frames, these sessions day. Normally forex factory is the best and mostly used economic become less important. calendar. We need to check if there is any high impact news of the Step 2: Drawing key support and resistance levels currency we are planning to place a trade. We need to understand if the US dollar is week or strong. Most of the major currency This is the most important step as it is impossible to identify pairs moves in the same direction most often as the correlation favorable trades without them. The first thing we should do when among them is very strong. So, if we see any event is coming then opening a new chart is drawing the key levels- horizontal areas, we should wait for it to pass because during this time the lines and chart patterns. It provides us a blueprint of what to becomes noisy and it can change its direction with the result of do next. It helps brining the market to us. So once we have these the event. So after the noise is over and market is clear from all levels identified, it’s just a matter of sitting back and watching to biasness we will place our trades. see how the market reacts when it gets in the identified levels. We can divide support and resistance levels in three category. Step 6: Identifying entry point Horizontal support and resistance: Whenever we are marking We will use price action and confluence before we enter any trade. support and resistance levels, we should begin with the higher time A favourable risk reward ratio and a confirming price action signal frames which allow us to identify the most important areas and are necessary to make a trading decision. We can make a watch disregard the rest. If we use intraday time frame such as the 30 list which means selecting the number of pairs that we understand minute or 1 hour then we might get bogged down by insignificant most. Maintaining a Watch List is one of the best ways to reduce levels. stress levels and find more profitable trades. We will make a list of 9-15 currency pairs which we will look over time to time and find News causes too many price spikes in the market and can distract trade set ups. We will create our plan of attack for each week of us from what’s important. Once we have an accurate big picture that selected pairs. Without a watch list, we have no compass to view from the daily and weekly time frames, we can move down to guide our trading. a 4-hour chart or even 1 hour chart to fine tune as necessary. We draw the key levels, check the price action signals prepare our Trend lines: We have to identify possible support or resistance watch list and then when the market opens, we sit and stare at our level within a trending market. We will draw all possible trend lines screens. We find a favourable position and we enter a trade. in the chart to find the best trading opportunity in the break of the swing highs or swing lows. Step 7: Identifying exit points : Wmost effective chart patterns which include the Before we enter any trade we have to define a profit target and a head and shoulders, channels (bull and bear flags), and we will look stop loss level. Many traders only identify a target and forget about for the edges (rising and falling) pattern. We will look for the most their stop loss. precise and easily found level because if we have 30 or 40 viewable In order to calculate the risk we must have a stop loss level defined. levels on a chart, we won’t be able to place a trade. So, by only So we will use the support and resistance levels in both identifying paying attention to the most obvious levels we get a greater chance and existing from a trade. We don’t need to catch the entire move of finding quality trade setups. but the majority of the swing to make a profit. Step 3: Evaluating momentum Step 8: Calculating and managing risk There is a saying, “the trend is your friend”. Although it is one of the Once we have identified our exit points for the trade, now it’s time oldest sayings out there, but it’s also one of the most accurate one. for risk management. For example, a setup with a 50 pip stop loss The strongest trend momentum or market’s order flow that and a 150 pip target is (1:3 risk reward ratio). Similarly, if we risk continue for days, weeks, months are backed by banks and hedge $100 and we want to make $300, the risk to reward ratio is 1:3.

J Stock Forex Trad Vol. 9 Iss. 4 No: 270 4 Uddin MC. OPEN ACCESS Freely available online When calculating the risk of any trade, the first thing we need to be evolving as a trader. Now based on the steps mentioned earlier, do is determine where we should place the stop loss. Once we have we will start analysing the market and taking trades. After taking a the stop loss placement identified, next we have to determine the number of trades we will analyses the result of the trades and will trade lot size. evaluate our strategy. Let’s assume, we have a trading account with 10,000 US Dollar METHODOLOGY OF THE STUDY and we want to take 1% risk per trade which is 100 USD per trade. Which means we are ready to lose 100 USD in a trade. There are many characteristics and skills required by traders to be successful in the Forex markets. The ability to determine the Next we have to check the previously identified stop loss and take various aspects and factors of the market is important for the profit levels. Let’s assume the stop loss level is 50 pips away from traders to win this game. If a trader does not know what are the the entry price and the take profit level is 100 pips away from the goals and the rules to enter a trade, then greed and emotion will entry level. So the risk reward ratio is 1:2. take over and make him lose money. Now we have to set at which lot we will make the trade. Here we For this reason, the first step of this project was to learn the will use a simple calculation. We will set such a trade lot where various disciplines of price action trading and establish a trading 50 pips loss equals to 100 USD loss. As we know, if we trade 1 plan. With the understanding of price action trading strategy, we standard lot then the variation per pip will be 10 USD so if we mastered different analysis techniques to construct a composite trade 0.2 volume then the variation per pip will be 2 USD. So, 50 trading system. pips loss will be equal to 100 USD loss in monetary value. In this way, we can minimize the risk of trading. In this paper, we first described the entry and exit rules for any trades, then we set our money management strategy and finally we If we follow the steps described earlier then trading Forex won’t have constructed our course of action to enter a trade. Then we be complicated. We will no longer feel the need to sit in front of have made 267 trades in MT4 platform to evaluate our proposed the computer hours after hours searching for setups. Instead, we confluence strategy. simply sit back, make a plan of attack and let the trades come to us. If we face any uncertainty then the best thing we would do is ANALYSIS AND FINDINGS nothing. If we find ourselves unable to decide whether a setup is worthy to trade then it’s probably best way to stay on the sideline. Trade journal The idea that becoming a successful trader is a process and not a The trade journal shows all the trades that we executed during the rd project. In other words it has no end date of it as we will constantly test period from July 01, 2020 to 23 December 2020 (Table 1).

Table 1: Trade Journal.

Currency Pair Entry Type Entry Price Stop Loss Take Profit Trade Taken (GMT +6) Profit or Loss EURUSD buy 1.1215 1.1172 1.131 2020/07/01 at 7:07 PM 45 GBPUSD buy 1.2415 1.2375 1.2565 2020/07/01 at 7:08 PM 45 NZDUSD buy 0.646 0.6412 0.655 2020/07/01 at 7:09 PM 30 AUDUSD buy 0.6902 0.6858 0.701 2020/07/01 at 7:08 PM 35 GBPUSD sell 1.2514 1.2566 1.242 2020/07/02 at 6:58 PM 45 EURUSD buy 1.1315 1.1278 1.142 2020/07/06 at 8:09 PM 35 GBPUSD buy 1.2508 1.2462 1.264 2020/07/07 at 5:41 PM 30 EURUSD buy 1.128 1.1222 1.1385 2020/07/07 at 5:41 PM 20 AUDUSD buy 0.6952 0.6912 0.702 2020/07/07 at 7:46 PM 20 NZDUSD buy 0.655 0.6512 0.662 2020/07/07 at 7:46 PM 20 GBPUSD buy 1.2525 1.2485 1.261 2020/07/07 at 7:41 PM 50 NZDUSD buy 0.6595 0.6545 0.669 2020/07/09 at 8:06 PM -20 USDCAD buy 1.3496 1.3442 1.357 2020/07/09 at 6:52 PM 20 USDCHF sell 0.942 0..9464 0.934 2020/07/10 at 6:34 PM 20 GBPUSD buy 1.2595 1.2542 1.27 2020/07/10 at 6:32 PM 50 EURUSD buy 1.1278 1.1236 1.1356 2020/07/10 at 6:32 PM 35 USDCAD buy 1.354 1.349 1.365 2020/07/10 at 12:38 AM 40 GBPUSD buy 1.2528 1.2478 1.263 2020/07/14 at 6:45 PM -18 EURUSD buy 1.1368 1.1322 1.1455 2020/07/14 at 6:45 PM 25 GBPUSD sell 1.1745 1.1792 1.161 2020/07/14 at 8:13 PM -45 USDCHF sell 0.94 0.9445 0.93 2020/07/15 at 12:38 PM 30 USDJPY sell 107.27 107.75 106.2 2020/07/15 at 12:38 PM 35 AUDUSD buy 0.6995 0.695 0.71 2020/07/15 at 12:37 PM 15 EURUSD buy 1.14 1.1348 1.152 2020/07/15 at 12:37 PM 45 USDCHF buy 0.9437 0.9382 0.951 2020/07/15 at 10:12 PM 20

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GBPUSD buy 1.2584 1.2516 1.267 2020/07/16 at 8:27 PM 40 USDCAD buy 1.3521 1.3482 1.362 2020/07/16 at 3:03 PM 22 GBPUSD sell 1.2525 1.2575 1.244 2020/07/17 at 6:06 PM -30 GBPUSD sell 1.2565 1.2632 1.241 2020/07/17 at 2:27 AM 25 GBPUSD buy 1.1785 1.1725 1.189 2020/07/17 at 6:07 PM 50 GBPUSD buy 1.256 1.2508 1.263 2020/07/17 at 6:07 PM 30 GBPUSD buy 1.2572 1.2508 1.273 2020/07/20 at 2:45 PM 50 USDCAD sell 1.3475 1.353 1.335 2020/07/21 at 5:24 PM 35 AUDUSD buy 0.707 0.6925 0.715 2020/07/21 at 5:23 PM 40 NZDUSD buy 0.66 0.6558 0.67 2020/07/21 at 5:23 PM 30 GBPUSD buy 1.269 1.2636 1.285 2020/07/21 at 3:02 PM 60 USDCAD sell 1.3432 1.3492 1.332 2020/07/22 at 6:05 PM 26 GBPUSD buy 1.269 1.2642 1.279 2020/07/22 at 6:03 PM 37 EURUSD buy 1.157 1.1522 1.169 2020/07/22 at 6:02 PM 30 GBPUSD buy 1.27 1.2648 1.285 2020/07/23 at 7:57 PM 40 EURUSD buy 1.1566 1.1528 1.172 2020/07/23 at 7:52 PM 30 USDCAD sell 1.3418 1.3474 1.3325 2020/07/23 at 7:52 PM 30 GBPUSD buy 1.2875 1.2822 1.299 2020/07/27 at 8:39 PM 25 EURUSD buy 1.1751 1.17 1.185 2020/07/27 at 8:14 PM 30 EURUSD buy 1.1742 1.1696 1.184 2020/07/29 at 3:41 PM 20 GBPUSD buy 1.2956 1.2905 1.308 2020/07/29 at 1:55 PM 40 GBPUSD buy 1.303 1.2978 1.321 2020/07/30 at 9:59 PM 50 NZDUSD buy 0.6644 0.66 0.675 2020/07/30 at 10:36 PM 20 AUDUSD buy 0.7142 0.71 0.721 2020/07/30 at 10:36 PM 20 USDCHF sell 0.9118 0.9168 0.9 2020/07/30 at 10:36 PM 20 EURUSD buy 1.1795 1.1735 1.19 2020/07/30 at 10:35 PM 30 GBPUSD sell 1.3035 1.29 1.3088 2020/08/04 at 8:16 PM 20 GBPUSD sell 1.2998 1.287 1.3052 2020/08/04 at 6:52 PM 30 GBPUSD buy 1.308 1.32 1.3025 2020/08/04 at 1:04 PM 55 EURUSD sell 1.1772 1.169 1.1818 2020/08/04 at 4:32 PM 20 EURUSD buy 1.1775 1.19 1.1718 2020/08/04 at 1:04 PM -30 EURUSD buy 1.182 1.195 1.1774 2020/08/05 at 7:55 PM 40 USDCHF buy 0.9202 0.93 0.916 2020/08/03 at 6:49 PM 20 USDCAD buy 1.341 1.359 1.3365 2020/08/04 at 6:53 PM -35 USDCHF sell 0.9115 0.901 0.9167 2020/08/05 at 7:50 PM 30 EURUSD buy 1.177 1.185 1.1725 2020/08/10 at 7:34 PM -45 USDCAD sell 1.3365 1.325 1.3418 2020/08/10 at 7:34 PM 40 USDCHF sell 0.9158 0.903 0.92 2020/08/10 at 7:38 PM 20 GBPUSD buy 1.3095 1.319 1.3045 2020/08/10 at 7:55 PM 40 USDCHF sell 0.916 0.903 0.9205 2020/08/11 at 10:18 PM -20 USDCAD sell 1.329 1.318 1.3336 2020/08/11 at 10:19 PM -20 GBPUSD buy 1.3086 1.32 1.3032 2020/08/11 at 10:31 PM -35 EURUSD buy 1.183 1.192 1.1778 2020/08/13 at 6:16 PM 30 GBPUSD buy 1.3075 1.318 1.3022 2020/08/13 at 6:16 PM 40 USDCAD sell 1.3225 1.311 1.328 2020/08/13 at 6:16 PM 30 XAUUSD buy 2009 2019 1999 2020/08/18 at 2:30 PM 50 EURUSD buy 1.1925 1.208 1.1878 2020/08/18 at 6:31 PM 35 EURUSD buy 125.8 126.9 125.18 2020/08/18 at 6:31 PM 30 USDCHF sell 0.9035 0.895 0.9078 2020/08/18 at 6:31 PM 20 XAUUSD buy 1940 1947 1934 2020/08/20 at 2:23 PM 70 XAUUSD buy 1946 1356 1939 2020/08/20 at 9:23 PM 50 XAUUSD buy 1940 1947 1934 2020/08/20 at 9:23 PM 70 XAUUSD buy 1931 1940 1924 2020/08/21 at 2:23 PM 40 XAUUSD sell 1924 1909 1932 2020/08/21 at 2:23 PM 100

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XAUUSD buy 1946 1956 1939 2020/08/21 at 2:30 PM 50 EURUSD sell 1.1825 1.174 1.186 2020/08/24 at 8:21 PM 20 USDCAD buy 1.3197 1.329 1.316 2020/08/24 at 8:21 PM 20 XAUUSD buy 1945.9 1937.2 1953.6 2020/08/24 at 8:21 PM 50 GBPUSD sell 1.314 1.304 1.319 2020/08/25 at 9:02 PM 30 XAUUSD buy 1953 1965 1947 2020/08/27 at 7:55 PM 50 XAUUSD buy 1967 1981 1959 2020/08/27 at 7:55 PM 80 XAUUSD buy 1963 1981 1955 2020/08/27 at 7:55 PM 160 GBPUSD buy 1.319 1.329 1.315 2020/08/28 at 1:21 AM 40 EUR/USD buy 1.1672 1.1745 1.1642 2020/09/25 at 11:07 PM -30 XAU/USD buy 1973 1961 1978 2020/09/01 at 9:23 PM 80 GBP/USD sell 1.334 1.322 1.3378 2020/09/02 at 9:25 PM 50 EUR/JPY sell 125.94 124.7 126.45 2020/09/02 at 9:25 PM 40 EUR/USD sell 1.1866 1.176 1.191 2020/09/02 at 9:26 PM 40 GBP/USD sell 1.3266 1.317 1.3302 2020/09/03 at 11:12 PM 20 XAU/USD buy 1930 1946.2 1921 2020/09/03 at 11:13 PM 25 XAU/USD buy 1918.5 1936 1908 2020/09/04 at 11:13 PM 100 XAU/USD buy 1933.5 1955 1921 2020/09/04 at 11:13 PM 70 XAU/USD sell 1932 1906 1943 2020/09/07 at 11:16 AM 50 EUR/USD sell 1.1772 1.169 1.1818 2020/09/08 at 11:16 AM 15 USD/CAD buy 1.3188 1.329 1.3144 2020/09/08 at 11:17 AM 60 EUR/JPY sell 124.76 124 125.17 2020/09/08 at 11:17 AM 30 EUR/USD buy 1.181 1.192 1.1775 2020/09/09 at 3:33 PM 20 XAU/USD buy 26.6 26.9 26.42 2020/09/09 at 3:33 PM 15 XAU/USD buy 1946 1955 1940 2020/09/09 at 7:37 PM 20 EUR/USD buy 1.1861 1.197 1.1835 2020/09/10 at 4:07 PM -30 XAU/USD buy 1955 1965 1947 2020/09/10 at 7:34 PM 90 EUR/USD buy 1.1875 1.197 1.1835 2020/09/14 at 3:52 PM 20 GBP/USD buy 1.2892 1.297 1.284 2020/09/14 at 4:00 PM 20 XAU/USD sell 1968.5 1955 1975 2020/09/15 at 3:52 PM 80 XAU/USD sell 1969 1955 1977 2020/09/16 at 3:52 PM 70 XAU/USD sell 1970 1958 1977 2020/09/16 at 3:52 PM 120 GBP/USD buy 1.2944 1.305 1.2892 2020/09/17 at 3:53 PM 30 XAU/USD buy 1938.5 1947 1933 2020/09/17 at 3:54 PM 40 USD/CAD buy 1.3168 1.327 1.3122 2020/09/18 at 3:05 PM 30 XAU/USD buy 1910 1935 1899 2020/09/21 at 8:07 PM -100 XAU/USD sell 1900 1870 1911 2020/09/21 at 8:35 PM 170 USD/CAD buy 1.3285 1.3395 1.3235 2020/09/21 at 8:36 PM 25 XAU/USD sell 1902.5 1990 1912 2020/09/22 at 10:15 PM 50 XAU/USD buy 1879 1861 1894 2020/09/23 at 8:30 PM 40 XAU/USD sell 1872 1842 1884 2020/09/23 at 9:11 PM 70 EUR/USD buy 1.1658 1.179 1.1812 2020/09/24 at 11:29 PM 20 XAU/USD sell 1860 1850 1868 2020/09/24 at 11:29 PM 60 XAU/USD buy 1868 1895 1854 2020/09/24 at 11:30 PM 65 EUR/USD sell 1.167 1.16 1.1706 2020/09/24 at 12:13 AM 10 USD/CAD buy 1.3355 1.348 1.3311 2020/09/24 at 12:13 AM 10 XAU/USD sell 1862 1840 1878 2020/09/25 at 11:08 PM 70 XAU/USD buy 1865 1890 1858 2020/09/28 at 8:26 PM 70 XAU/USD buy 1875 1930 1847 2020/09/29 at 1:14 PM 70 GBP/USD buy 1.2836 1.299 1.2792 2020/09/29 at 3:53 PM 40 XAU/USD buy 1883 1898 1874 2020/09/29 at 5:25 PM 80 XAU/USD buy 1882.5 1916 1869 2020/09/30 at 4:45 PM 170 XAU/USD buy 1898.5 1917 1888 2020/10/01 at 4:45 PM 125 XAU/USD buy 1906 1928 1998 2020/10/01 at 4:45 PM -80

J Stock Forex Trad Vol. 9 Iss. 4 No: 270 7 Uddin MC. OPEN ACCESS Freely available online

XAU/USD buy 1906 1932 1888 2020/10/02 at 4:45 PM 40 XAU/USD buy 1913 1935 1900 2020/10/05 at 11:19 PM 30 EUR/USD buy 1762 1840 1722 2020/10/05 at 8:16 PM 25 XAU/USD buy 1901.5 1915 1889 2020/10/05 at 8:16 PM 100 XAU/USD sell 1891 1862 1902 2020/10/05 at 8:17 PM -100 EUR/USD buy 1.1775 1.189 1.1742 2020/10/06 at 8:50 PM 20 XAU/USD buy 1914.75 1936 1907 2020/10/06 at 8:50 PM 45 XAU/USD buy 1882 1891 1879 2020/10/08 at 12:06 PM 90 XAU/USD buy 1884 1900 1877 2020/10/08 at 12:06 PM 60 XAU/USD buy 1890 1908 1879 2020/10/08 at 12:06 PM 50 XAU/USD buy 1917 1929 1913 2020/10/09 at 1:01 AM 30 EUR/JPY buy 124.88 125.7 124.47 2020/10/09 at 1:01 AM 10 EUR/USD sell 1.1795 1.17 1822 2020/10/09 at 2:21 PM 10 GBP/USD buy 1.2915 1.302 1.287 2020/10/10 at 5:50 PM 40 XAU/USD sell 1926 1916 1932 2020/10/12 at 1:01 AM 60 XAU/USD buy 1910 1896 1917 2020/10/13 at 1:01 AM 100 EUR/USD buy 1.1793 1.17 1.1835 2020/10/13 at 1:02 AM 30 EUR/USD buy 1.1754 1.1835 1.1722 2020/10/14 at 1:29 AM 10 XAU/USD buy 1892 1908 1882 2020/10/14 at 1:29 AM 100 XAU/USD buy 1890 1912 1882 2020/10/15 at 3:06 PM 70 XAU/USD sell 1903 1888 1912 2020/10/16 at 3:06 PM 60 XAU/USD buy 1914 1930 1906 2020/10/19 at 3:06 PM -80 EUR/USD buy 1.1764 1.183 1.1742 2020/10/20 at 3:07 PM 60 XAU/USD buy 1898 1916 1887 2020/10/20 at 3:07 PM 100 XAU/USD buy 1915 1930 1907 2020/10/21 at 11:57 PM 90 XAU/USD buy 1910.5 1890 1921 2020/10/23 at 1:06 AM 130 EUR/USD buy 1.1838 1.192 1.1803 2020/10/23 at 7:32 PM 20 EUR/USD sell 1.1821 1.1715 1.1868 2020/10/26 at 11:01 PM 20 EUR/JPY sell 124.1 123 124.52 2020/10/26 at 11:01 PM 30 XAU/USD buy 1899 1916 1888 2020/10/27 at 9:06 PM 90 XAU/USD buy 1882 1916 1857 2020/10/30 at 2:31 PM 30 USD/CHF sell 0.9185 0.912 0.922 2020/11/01 at 5:46 PM 40 USD/JPY buy 104.44 104.9 104 2020/11/03 at 5:35 PM 20 NZD/USD buy 0.6615 0.669 0.6575 2020/11/03 at 5:40 PM 40 USD/JPY sell 104.6 103.8 104.9 2020/11/04 at 5:35 PM 40 NZD/USD buy 0.668 0.672 0.664 2020/11/05 at 5:40 PM 30 USD/CHF sell 0.9095 0.901 0.9135 2020/11/05 at 8:13 PM 20 USD/JPY sell 104.02 103.2 104.42 2020/11/05 at 8:13 PM 20 USD/CAD sell 1.317 1.302 1.321 2020/11/05 at 8:13 PM 40 GBP/USD buy 1.301 1.309 1.297 2020/11/06 at 5:52 PM 30 XAUUSD buy 1953 1963 1947 2020/11/06 at 8:13 PM 50 GBP/USD buy 1.3188 1.328 1.3152 2020/11/09 at 10:00 PM 20 USD/CAD sell 1.2938 1.29 1.304 2020/11/09 at 10:00 PM 20 XAUUSD buy 1851.5 1890 1844 2020/11/09 at 10:01 PM 150 USD/CAD sell 1.293 1.285 1.297 2020/11/09 at 5:45 PM -20 GBP/USD buy 1.318 1.35 1.315 2020/11/09 at 5:46 PM -30 EUR/USD buy 1.1907 1.199 1.1862 2020/11/09 at 9:59 PM 20 GBP/USD buy 1.3254 1.335 1.32 2020/11/10 at 7:37 PM 40 USD/CAD sell 1.3025 1.294 1.3056 2020/11/10 at 7:37 PM 20 USD/JPY buy 105.57 106.9 104.97 2020/11/11 at 7:37 PM -45 GBP/USD sell 1.322 1.314 1.326 2020/11/11 at 7:46 PM 20 XAUUSD buy 1875 1909 1858 2020/11/12 at 7:45 PM 80 EUR/USD buy 1.178 1.185 1.174 2020/11/12 at 7:46 PM 20 XAUUSD buy 1890 1907 1878 2020/11/13 at 7:45 PM 100

J Stock Forex Trad Vol. 9 Iss. 4 No: 270 8 Uddin MC. OPEN ACCESS Freely available online

EUR/USD sell 1.1842 1.177 1.1874 2020/11/16 at 12:43 AM 20 XAUUSD buy 1889 1913 1878 2020/11/16 at 12:43 AM 55 XAUUSD buy 24.62 25.62 24.22 2020/11/16 at 12:43 AM 10 XAUUSD buy 1885.5 1900 1876 2020/11/17 at 8:07 PM 65 EUR/USD buy 1.1864 1.198 1.1821 2020/11/17 at 8:47 PM 20 EUR/USD buy 1.1862 1.1952 1.182 2020/11/18 at 8:54 PM -8 XAUUSD buy 1871 1890 1862 2020/11/18 at 8:55 PM 50 USD/CAD buy 1.3084 1.314 1.305 2020/11/18 at 8:56 PM 20 USD/CHF buy 0.9113 0.92 0.91 2020/11/18 at 8:57 PM -10 USD/CAD buy 1.3085 1.319 1.303 2020/11/19 at 10:24 PM -20 NZD/USD sell 0.6884 0.678 0.6922 2020/11/19 at 10:24 PM -20 XAUUSD buy 1872 1900 1860 2020/11/19 at 12:43 AM 20 XAUUSD buy 1869 1884 1859 2020/11/20 at 10:46 PM 50 XAUUSD buy 1865.5 1878 1856 2020/11/20 at 10:46 PM 30 EUR/USD sell 1.1871 1.18 1.1904 2020/11/23 at 10:28 PM -33 XAUUSD sell 1870 1854 1878 2020/11/23 at 10:28 PM 60 EUR/USD buy 1.19 1.199 1.186 2020/11/23 at 10:29 PM -40 GBP/USD buy 1.3372 1.349 1.3334 2020/11/23 at 10:30 PM -20 USD/CHF buy 0.9086 0.9022 0.9132 2020/11/23 at 10:30 PM -20 XAUUSD sell 1848 1778 1872 2020/11/23 at 10:31 PM 150 XAUUSD buy 1830 1844.5 1824.5 2020/11/23 at 10:34 PM 100 XAUUSD buy 1839 1846 1835 2020/11/24 at 12:06 AM -40 EUR/USD buy 1.185 1.19 1.182 2020/11/24 at 4:21 PM 20 XAUUSD sell 1828.5 1800 1843 2020/11/24 at 4:21 PM 250 XAUUSD buy 1810 1826 1799 2020/11/25 at 4:22 PM 80 GBP/USD buy 1.3314 1.345 1.3282 2020/11/25 at 4:24 PM 60 EUR/USD sell 1.199 1.19 1.2032 2020/11/30 at 1:11 AM 20 USDJPY buy 103.9 103.4 104.7 2020/12/04 at 10:49 PM 35 EURUSD sell 1.199 1.2032 1.19 2020/11/30 at 1:11 AM 20 EURUSD sell 1.2058 1.2105 1.195 2020/12/03 at 1:03 AM -40 EURUSD buy 1.209 1.2035 1.24 2020/12/03 at 1:06 AM 35 GBPUSD buy 1.3314 1.3272 1.345 2020/12/03 at 1:07 AM 80 XAUUSD buy 1820 1805 1845 2020/12/03 at 1:10 AM 160 XAUUSD sell 1842 1852 1805 2020/12/03 at 5:53 PM 60 USDCAD buy 1.291 1.2888 1.299 2020/12/03 at 5:53 PM 5 XAUUSD sell 1850 1863 1810 2020/12/04 at 10:49 PM 40 USDCHF buy 0.899 0.895 0.905 2020/12/04 at 10:49 PM 20 XAUUSD buy 1863 1838 1909 2020/12/07 at 10:49 PM 100 XAUUSD sell 1848 1861 1824 2020/12/07 at 10:49 PM -100 XAGUSD buy 24.58 24.12 25.71 2020/12/07 at 10:49 PM 20 USDCAD buy 1.2824 1.277 1.3012 2020/12/07 at 10:49 PM -30 GBPUSD sell 1.3264 1.3305 1.315 2020/12/07 at 10:49 PM -40 XAUUSD buy 1834 1826 1842 2020/12/07 at 10:49 PM 80 XAUUSD buy 1872 1877 1856 2020/12/08 at 10:48 PM 80 XAUUSD sell 1865.5 1873 1851 2020/12/08 at 10:49 PM 50 XAUUSD sell 1851 1864 1826 2020/12/09 at 10:51 PM 100 XAUUSD sell 1860 1848 1880 2020/12/09 at 10:51 PM 50 AUDUSD sell 0.746 0.7486 0.741 2020/12/09 at 11:24 PM 20 NZDUSD sell 0.7056 0.708 0.694 2020/12/09 at 11:24 PM 30 USDCAD buy 1.2773 1.2746 1.2855 2020/12/09 at 3:50 PM 20 GBPUSD buy 1.3182 1.3128 1.328 2020/12/11 at 2:46 PM 30 XAUUSD buy 1838.5 1818 1867 2020/12/11 at 2:47 PM 90 USDCAD sell 1.2777 1.2813 1.2702 2020/12/11 at 2:48 PM 30 NZDUSD buy 0.7086 0.7067 0.7125 2020/12/11 at 3:48 PM 10

J Stock Forex Trad Vol. 9 Iss. 4 No: 270 9 Uddin MC. OPEN ACCESS Freely available online

XAGUSD buy 23.76 23.48 24.42 2020/12/14 at 2:46 PM 20 EURUSD sell 1.216 1.2186 1.207 2020/12/14 at 2:46 PM 40 USDCHF buy 0.8856 0.8824 0.899 2020/12/14 at 2:46 PM 30 XAUUSD buy 1825 1817 1839 2020/12/14 at 2:47 PM 50 XAUUSD buy 1844 1838 1856 2020/12/15 at 2:46 PM 70 EURUSD buy 1.213 1.21 1.2174 2020/12/15 at 2:46 PM 10 XAGUSD sell 24.54 24.84 24.12 2020/12/15 at 2:46 PM 10 XAUUSD buy 1848.5 1839 1663 2020/12/15 at 2:46 PM 70 GBPUSD buy 1.3376 1.3333 1.3444 2020/12/15 at 2:46 PM 20 XAUUSD buy 1852 1842 1876 2020/12/16 at 10:27 PM 40 AUDUSD sell 0.7575 0.7606 0.7502 2020/12/16 at 10:27 PM 20 EURUSD buy 1.218 1.213 1.2312 2020/12/16 at 10:27 PM 30 USDCHF sell 0.8848 0.8884 0.874 2020/12/16 at 10:27 PM 30 XAUUSD buy 1843.5 1837 1856 2020/12/16 at 3:52 PM 60 XAUUSD buy 1875 1861 1912 2020/12/17 at 10:27 PM 50 XAUUSD buy 1874.5 1860 1910 2020/12/17 at 10:27 PM 100 XAUUSD sell 1889.5 1898.5 1872 2020/12/18 at 10:26 PM 50 EURUSD sell 1.2336 1.2376 1.221 2020/12/18 at 10:26 PM 126 EURJPY sell 126.62 127.02 125.45 2020/12/18 at 10:26 PM 112 XAGUSD sell 25.96 26.24 25 2020/12/18 at 10:27 PM 20 USDCAD buy 1.284 1.281 1.287 2020/12/21 at 10:26 PM 30 USDCAD buy 1.2848 1.2804 1.294 2020/12/21 at 10:27 PM 25 XAUUSD buy 1874 1864 1884 2020/12/22 at 10:26 PM 50 XAUUSD sell 1875 1886 1860 2020/12/22 at 10:26 PM 35 XAUUSD buy 1860 1846 1884 2020/12/23 at 10:38 PM 110 EURUSD buy 1.2167 1.2118 1.2275 2020/12/23 at 10:39 PM 30

Performance analysis sell (Short) trades were 83 which is 31.09% of the total trades. So, we can assume that market was on a steady uptrend on the Test period 1st July, 2020- 23rd December, 2020 pairs we traded during that time. Currency pairs: EURUSD, USDCHF, GBPUSD, USDJPY, Total Buy Trades VS. Total Sell trades: (Graph 4, Figure 5) USDCAD, AUDUSD, EURJPY, NZDUSD, XAUUSD, XAGUSD • Interpretation: A total 267 trades were executed during the Total number of trades=267 test period where the winning trades were 236 and losing We have categorized performance analysis into two sub category. trades were 31. Among the wining trades the best was 250 pips gain and the worst was 100 pips loss. As we followed good 1. Performance in Pips risk reward ratio the average wining pips were always higher • Interpretation: From 1st July, 2020 to 23rd December, 2020, than the losing pips. a total 267 trades were executed Best Trade VS. Worst Trade (in Pips): (Graph 5, Figure 6) • based on the confluence of price action disciplines where 236 • Interpretation: A total 267 trades were executed in the test trades were closed with profit and 31 trades were closed with period. The number of trades on each months was not equal. loss. The win rate or the profitability of trade was 88.39%. Number of win trades vs. Number of loss trades: (Graph 1, We see from the graph that the highest number of trades Figure 2) was on December which was 52 and the second highest was on July which was 50. The lowest number of trades was on • Interpretation: Out of 267 trades, 236 trades were closed October which was 32. with profit which resulted 11053 pips whereas 31 trades were Total number of trades per month: (Table 1, Graph 6, Figure 7) closed with loss which resulted 1234 pips. A net win was 9819 pips Win Pips VS. Loss Pips: (Graph 2, Figure 3) • Interpretation: Due to the difference in number of trades and profitability ratio, the monthly net pips gain was not equal as • Interpretation: Out of 267 trades, 236 trades were closed with well. The highest gain was on December which was 2193 pips 11053 pips profit with an average of 47 Pips per trade. On the and the second highest was on September which was 1995 other hand 31 trades were closed with 1234 pips loss with an pips. On the other hand, the lowest was August which was average of 40 Pips per trade. 1195 pips. • Average Win: 47 Pips Average Loss: 40 Pips: (Graph 3, Figure 4) Monthly net gain (in Pips): (Table 2, Graph 7, Figure 8) • Interpretation: Out of 267 trades, total buy (long) trades • Interpretation: We have traded 10 different pairs including were 184 which is 68.91% of the total trades whereas total Gold and Silver during the test period. Market was different

J Stock Forex Trad Vol. 9 Iss. 4 No: 270 10 Uddin MC. OPEN ACCESS Freely available online

Figure 5: Total Buy Trades vs. Total Sell trades (Graph No: 04).

Figure 2: Number of win trades vs. Number of loss trades (Graph No: 01).

Figure 6: Best Trade vs. Worst Trade (in Pips): (Graph No: 05).

Figure 3: Win pips vs. Loss pips (Graph No. 02).

Figure 7: Total number of trades per month: (Table 1, Graph: 06).

Table 2: Total number of trades per month. Months July August September October November December Number of 51 37 42 32 50 52 Trades

Figure 4: Average Win: 47 Pips Average Loss: 40 Pips (Graph No. 03).

in different times so as the trading opportunity. So the average win in pips in different months depended on the total net gain in pips divided by the number of trades on that particular month. As we can see on the graph the highest gain was on September (47) followed by October (42) whereas the lowest was on July (28). Figure 8: Monthly net gain (in Pips): (Table 2, Graph: 07)

J Stock Forex Trad Vol. 9 Iss. 4 No: 270 11 Uddin MC. OPEN ACCESS Freely available online Average win (in Pips) Per Trade Per Month: (Table 3, Graph December. 8, Figure 9) Number of win trade vs. loss trade per month: (Table 5, • Interpretation: The total number of trades on each month Graph 10, Figure 11) was different. On each months we had winning trades as well • Interpretation: We have traded on ten pairs. The number as losing trades. The number of winning trades and the sum of net pips gain was not equal. In some pairs we got trade of their pips were higher than the losing ones. That’s why each opportunity very frequently and on some other pair we got a months ended with net profit. In the above graph, we can see few. In the above chart we can see the highest pips gain was on the list of winning trades and losing trade on each month. The XAUUSD (6140 Pips) pair followed by GBPUSD (1204 Pips) highest win pips was on December and the highest losing pips and lowest gain was XAGUSD (70) pair. was on November. Number of Pips made on each pair: (Table 6, Graph 11, Win pips vs. Loss Pips per month: (Table 4, Graph 9, Figure 10) Figure 12) • Interpretation: In some months we got higher trade • Interpretation: The total number of trades of a pair varied opportunity and in some months we get a few. So the number from the other pair. Due to market structure and availability of trades varied in each month. In addition to that, in some of trade opportunity, the number of trades varied significantly. months the losing trades were higher in proportionate to Like the highest number of trade was made on XAUUSD other months. Like in the charts, in November we had highest which was 96 whereas the lowest was on XAGUSD which was number of losing trades in comparison to other months and only 4. So we can conclude that XAUUSD gave us tremendous in September and October we had the lowest number of opportunity to trade during the last six months. losing trades. We had the highest number of wining trades in

Table 3: Monthly net gain (in Pips). Months July August September October November December Net Gain (Pips) 1427 1195 1995 1415 1614 2193

Figure 9: Average win (in Pips) Per Trade Per Month: (Table 3, Graph: 08)

Table 4: Average win (in Pips) per trade per month. Months July August September October November December Win Per Trade (Pips) 28 32 47 45 32 42

Figure 10: Win pips vs. Loss Pips per month: (Table 4, Graph 09)

J Stock Forex Trad Vol. 9 Iss. 4 No: 270 12 Uddin MC. OPEN ACCESS Freely available online Table 5: Win pips vs. Loss Pips per month. S.L No. Months Loss Pips Win pips 01 July 113 1540 02 August 185 1380 03 September 160 2155 04 October 260 1675 05 November 306 1920 06 December 210 2403

Figure 11: Number of win trade vs. loss trade per month: (Table 5, Graph: 10) Table 6: Number of win trade vs. loss trade per month. S.L No. Months Loss Trades Win Trades 01 July 4 47 02 August 6 31 03 September 3 39 04 October 3 29 05 November 12 38 06 December 4 48

Figure 12: Number of Pips made on each pair: (Table 6, Graph: 11)

Number of Trades made on each pair: (Table 7, Graph 12, very slowly. Like the GBPUSD pair is faster than AUDUSD Figure 13) and NZDUSD pairs. In a given market condition, if the • Interpretation: Some pairs moves very fast and some moves GBPUSD pair moves 60 pips in a direction then AUDUSD

J Stock Forex Trad Vol. 9 Iss. 4 No: 270 13 Uddin MC. OPEN ACCESS Freely available online or NZDUSD pair will make 20 pips. That’s why the average Key performance metrics: win per trade on different pairs varied. We can see from the • Our starting capital was: 5000 USD chart above, the average win per trade was around 64 pips in gold whereas it was only 17 for NZDUSD. • We took 1% Risk Per trade= 50 USD Average win per Trades (in Pips): (Table 8, Graph 13, Figure • Lot size was 0.1 for Currency pairs and 0.01 for Gold 14) (XAUUSD) and Silver (XAGUSD) 2. Performance in USD • Total gain in USD: 10,011 USD

Table 7: Number of Pips made on each pair. Pairs EURUSD USDCHF GBPUSD USDJPY USDCAD AUDUSD EURJPY NZDUSD XAUUSD XAGUSD Pips 995 270 1204 105 473 170 222 170 6140 70

Figure 13: Number of Trades made on each pair: (Table 7, Graph: 12)

Table 8: Number of Trades made on each pair. Pairs EURUSD USDCHF GBPUSD USDJPY USDCAD AUDUSD EURJPY NZDUSD XAUUSD XAGUSD Trades 52 15 44 6 27 7 5 10 96 4

Figure 14: Average win per Trades (in Pips): (Table 8, Graph 13)

Table 9: Average win per Trades (in Pips). Pairs EURUSD USDCHF GBPUSD USDJPY USDCAD AUDUSD EURJPY NZDUSD XAUUSD XAGUSD Win Pips 19.13 18 27.36 17.5 17.52 24.25 44.4 17 63.96 17.5

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Figure 15: Net profit made per Month (in USD): (Table 1, Graph 1)

Table 10: Net profit made per Month (in USD). Months July August September October November December Net Profit Per Month 1412 1190 1990 1418 1543 2458

Figure 16: Net Balance at the End of each Month (in USD): (Table 2, Graph 2)

Table 11: Net Balance at the End of each Month (in USD). Months July August September October November December Net Profit Per Month 6412 7602 9592 11010 12553 15011

Figure 17: Net profit made per month (in percentage)- Based on Starting Balance in each month: (Table 3, Graph 3)

• Average gain per month In USD: 1668.5 • In total 200.22% gain is made based on starting capital which is 33.37% per month. • Average gain per month in percentage: 33.37%

J Stock Forex Trad Vol. 9 Iss. 4 No: 270 15 Uddin MC. OPEN ACCESS Freely available online Table 12: Net profit made per month (in percentage)- Based on Starting Balance in each month. Months July August September October November December Net Profit (Month %) 28.24 18.55 26.17 14.18 14.01 19.58

Figure 18: Net Profit made per pair (in USD): (Table 4, Graph 4)

Table 13: Net Profit made per pair (in USD). Pairs EURUSD USDCHF GBPUSD USDJPY USDCAD AUDUSD EURJPY NZDUSD XAUUSD XAGUSD Net Profit 995 300 1204 100 369 170 213 170 6140 350

It is important to note that past performance of any strategy never • Interpretation: Due to the difference in wining pips in guarantee future performance and the trading environment of different pairs, the amount of profit made on each pair is also demo account is a bit different from real account different. Another important issue is the pip value. Like for • Interpretation: We started the test on a demo account with 0.1 standard lot trade on EURUSD or GBPUSD made 1 USD 5000 US Dollar. The test period was started on July, 2020 up or down in each pips movement whereas it was 1.11 USD and it ended at the end of December, 2020. Each trade was in USDCHF pair. The 0.01 lot in XAUUSD pair made 1 USD different in its nature. We took different number of trades up or down in each pips movement whereas it made 5 USD on different number of pairs in each month. The number of up or down in XAGUSD pair. We traded on 10 currency pairs trades, duration of trades, pairs to trade- all were depended on and we made the most profit on XAUUSD (6140 USD) pair only condition that is availability of a trade opportunity. So and the second highest was GBPUSD (1204 USD). The lowest the profit or loss we made was not the same on each month. profit was made on USDJPY which was only 100 USD. Net Like in the chart, we can see that the highest profit was made Profit made per pair (in USD): (Table 12, Graph 4, Figure in December which was 2458 USD whereas the lowest was 18) and Table 13. made in August which was 1190 USD. DISCUSSION AND CONCLUSION Net profit made per Month (in USD): (Table 9, Graph 1, Trading Forex market is often considered as an art rather than Figure 15) a science because it requires the use of practice, experience and • Interpretation: Our starting balance was 5000 USD and it intuition to generate profits. Trading with confluence gives a trader ended with 15011 USD at the end of test. During the six an increased edge to look for more than one element to confirm the months period we made 10011 USD net profit. The net bias. Price action levels are no different. When price approaches to balance started to grow in each and every months. We can these levels, traders look for the potential of a reversal and when see on the chart that at the end of July the balance was 6412 multiple price action levels exist in the same region or area, then USD, who rose to 9592 in September and 15011 USD at the this confluence of price action becomes stronger and offer traders end of December. There was a steady growth in profit and multiple reasons for prices to reverse. net balance in every month. Net Balance at the End of each After a thorough analysis of the price action levels over the Month (in USD): (Table 10, Graph 2, Figure 16) duration of six months and taking a number of real trades based • Interpretation: The net profit percentage of a month is on the strategy we can conclude that if the candlesticks (Pin bar, calculated based on the starting balance. Like In July we Inside bad and Engulfing bar) are properly identified, the key calculated the profit percentage on the starting balance which support and resistance levels are properly drawn, the trend lines was 5000 USD. The profit made on July was 1412 USD which are properly plotted and the chart patterns (Head and Shoulder, was 28.24% based on the starting balance. But in august we Wages, Channel, Flag Pattern) are properly recognized then the calculated the profit percentage based on the starting balance chance of winning of a trade becomes 88.39%. of August which was 6412 USD. So we can see from the chart The main point of this project is: a trader do not need a complicated that the highest profit was made on July (28.24%) and the or confusing trading strategy to find high-probability entries in lowest profit was made on November (14.01%). Net profit Forex market. All he needs is the ability to recognize price action made per month (in percentage)- Based on Starting Balance levels in the chart. If a trader just focus on this one strategy and in each month: (Table 11, Graph 3, Figure 17) master it over time then he will be able to look at any chart of any

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