We define an oscillation as a price movement from one price level to another price level over a series of bars. Price may oscillate up and down intra-bar, but no price in the series can be outside the beginning price opposite the direction of price movement at any point in the range.

To help illustrate what I mean I have marked up the 150 tick bar as shown in Figure 5. We do not do this for trading purposes as one can easily visualize it all with a bit of practice. I did it here strictly to illustrate the process I use to visualize oscillations. The arrows are the beginning of the oscillation and the blue lines are the direction of the movement in price.

forex strategy which time frames for trading EURUSD 150 Ticks Per Bar Oscillations

What I am looking for is tradable oscillations – which I define as a sufficiently large price move to allow a potentially profitable trade based on the following logic:

80% of the move must be at least two times the risk of the trade – preferably three or four times the risk. If traders follow this logic they can be profitable with a fifty percent batting average – each winner should offset two losses.

The amplitude of the first oscillation at the left side of the chart is seen where the two yellow horizontal lines intersect the price axis on the right side of the chart. When trading I use the cross hair mouse pointer to perform this measurement for any oscillation I consider trading.

I try to capture the maximum portion of each oscillation that I trade. So I use an additional intra-day chart, which in this case would be ten times faster than the chart on which I construct my trade. The goal here is to time my entry and exit so that I have the best chance to get at least 80% of the price movement. If price is going to change direction on my trade construction chart, it will first change direction on my faster chart.

For example if I had chosen to go long at the last Yellow Arrow to the right of the 150 tick per bar chart, at about 12:00, I would have been able to use the 15 tick per bar chart shown in Figure 6.           

forex strategy which time frames for trading EURUSD 15 Ticks Per Bar

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