Professional Documents
Culture Documents
Forex 3T
Trading Strategy
eBook
By James Chen, CTA, CMT
IMPORTANT NOTE: Please direct all inquiries regarding this document and all requests for this
document to the website: FXpath.com, or to the email address: ebooks@fxpath.com.
Copyright
No part of this publication may be reproduced, transmitted, or distributed in any form or by any
means, mechanical or electronic, including photocopying and recording, or by any information
storage and retrieval system, without permission in writing from the Author (except by a
reviewer, who may quote brief passages in a review.)
Risk Warning
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all
investors. The high degree of leverage can work against you as well as for you. Before deciding
to trade foreign exchange you should carefully consider your investment objectives, level of
experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of
your initial investment and therefore you should not invest money that you cannot afford to lose.
You should be aware of all the risks associated with foreign exchange trading, and seek advice
from an independent financial advisor if you have any doubts.
Any opinions, comments, or other information contained on this document is provided as general
market commentary, and does not constitute investment advice. The author and distributor of this
document will not accept liability for any loss or damage, including, but without limitation to, any
loss of profit, which may arise directly or indirectly from use of or reliance on such information.
These comments are for information purposes only. The information contained on this document
does not constitute a solicitation to buy or sell, and is not to be available to individuals in a
jurisdiction where such availability would be contrary to local regulation or law. It is the
responsibility of readers of this document to ascertain the terms of and comply with any local law
or regulation to which they are subject. Opinions, market data, and recommendations are subject
to change at any time.
Hypothetical Results
Hypothetical performance results have many inherent limitations, some of which are described
below. No representation is being made that any account will or is likely to achieve profits or
losses similar to those discussed in this document. In fact, there are frequently sharp differences
between hypothetical performance results and the actual results achieved by any particular trading
program. One of the limitations of hypothetical performance results is that they are generally
prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial
risk, and no hypothetical trading record can completely account for the impact of financial risk in
actual trading. For example, the ability to withstand losses or to adhere to a particular trading
program in spite of trading losses are material points which can also adversely affect actual
trading results. There are numerous other factors related to the markets in general or to the
implementation of any specific trading program which cannot be fully accounted for in the
preparation of hypothetical performance results and all of which can adversely affect actual
trading results.
Mr. Chen contributes daily and intraday technical analysis to key financial
media, is a frequent speaker at trading seminars, and has authored numerous
articles on forex trading strategies and technical analysis in major financial
publications.
Daily Chart with Multiple Exponential Moving Averages (periods of 10, 20,
30, 50, and 100)
But how does a trader locate and identify these dips and
rallies on the intermediate timeframe? Simply, with the
intelligent use of oscillators. Please see chart below.
1-Hour Chart with a Trailing Entry Stop and an Initial Stop Loss
The 3T trader who has just identified the buy signals on the
two longer timeframes would plan on looking to the short-
term timeframe to enter the market on a breakout above the
previous bar’s high. If the current bar closes without
breaking the previous bar’s high, the breakout level for the
next bar would effectively be lowered to the current bar’s
high. If, in turn, the next bar does not violate the new
Good Trading,
James Chen, CTA, CMT
IMPORTANT NOTE: Please direct all inquiries regarding this document and all requests for this
document to the website: FXpath.com, or to the email address: ebooks@fxpath.com.