See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/355031879

Analyzing the Effectiveness of Confluence of Price Action Disciplines in Forex

Market

Article · October 2021

CITATIONS READS

5 9,977

1 author:

Md. Chhali Uddin

Jashore University of Science and Technology
4 PUBLICATIONS 5 CITATIONS

SEE PROFILE

All content following this page was uploaded by Md. Chhali Uddin on 02 October 2021.

The user has requested enhancement of the downloaded file.

 ock & Fore
OPEN ACCESS Freely available online
St
Journal of

xT
rading
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 technical analysis 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

The foreign exchange market, which is referred as Forex, is the
market where a nation's currency is exchanged for that of another.
The Forex market is an online, Over-the Counter (OTC) market in
which the participants can trade 24 hours per day [1,2]. According
to the data from the Bank of International Settlements (BIS) Forex
Market is one of the fastest-growing sectors of financial markets
and the daily FX volume accounted for $5.1 trillion in 2016. So,
the daily Forex market turnover is multiple times higher than the
trading volumes on any capital markets [3]. Nowadays, anyone can
trade in Forex market through the internet and interbank networks
which made more people come into this market.
According to report, the majority of Forex traders fail to survive
and leave the market within six months to a year [4,5]. The
French financial markets regulator, (AMF) released a study result
in October 2014 which showed the rate of clients losing money
exceeded 89% (surveyed 14,799 active clients), with an average loss
of €10,887 per client.
Foreign exchange market is difficult to predict. Developing a
successful trading strategy for forex trading remains a significant
challenge for both traders and economists. One of the most
difficult aspects of forex trading is finding a systems, strategies, or
indicators that might work best for traders. There are numerous
ways of speculating the market which makes this journey even more
and satisfactory results over a subsequent period [6-8].
We have addressed this problem and developed a systematic
approach to trade foreign exchange market based on confluence
of price action trading disciplines. Confluence areas of price action
disciplines are defined as levels where more than one pattern shows
the same direction. The different levels of price action work best in
markets with high liquidity. Forex market has the highest liquidity
in the world and it produces some of the best price action levels
than any other financial markets.
Our method works as follows: at first, we have constructed our
own trading strategy using a combination of various disciplines
of price action (Japanese candlestick, support & resistance, trend
lines, channels and chart patterns) strategy which includes entry
and exit rules of a trade, money management and risk management
strategy. Then, from July 01, 2020 to 23rd December, 2020, we
have used that strategy in real market using MT4 platform. We
have executed 267 trades with ten pairs-EURUSD, USDCHF,
GBPUSD, USDJPY, USDCAD, AUDUSD, EURJPY, NZDUSD,
XAUUSD, and XAGUSD-to develop and evaluate our trading
strategy [8-9].
We have to acknowledge that the magnitude of analysis needed
to understand forex market is considerably greater than any other
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: chhali.mkt@just.edu.bd
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.
not need to be informed about the world’s social, political, and
economic situations, because price action trading strategy ignores
the fundamental factors and emphasis solely on price movements.
Every minute, hour and day, the Forex market is paving its own
road. If we know how to read it then this road can become our road
map to predict the future price movement. By studying the highs and
lows of the recent and past prices and support and resistance levels, we
can construct a general idea of what price may come next [10].
We believe this detailed guide of price action strategy would help
Forex traders to identify profitable trades, and control risk by
utilizing appropriate strategies. The result of this research can be
useful for Forex brokers, dealers and any financial institutions.
BACKGROUND
What is forex?
The Forex market which is usually known as “forex” or “FX, is
a global decentralized market for the trading of currencies. It
includes all aspects of buying, selling and exchanging currencies
at current or determined prices and remains open twenty four
hours a days, five days a week (Sunday 5pm EST through Friday
4pm EST) and all year round. Trading starts from the Asia-Pacific
region followed by the Middle East, Europe, and America. It is the
most liquid market in the world and in terms of trading volume;
it is by far the largest market in the world. The main participants
in this market are the larger international banks, central banks,
institutions, governments, hedge funds, corporations and private
speculators and retail investors. Since currencies are always traded
in pairs (EURUSD, GBPUSD), the Forex market does not set any
absolute value of a currency but determines its relative value by
setting the market price of one currency with another.
Forex Market is one of the largest financial markets in the world
with $5.0 trillion average daily turnover which is more than 12
times higher than the average daily turnover of global equity
markets. The volume is 50 times higher than the average daily
turnover of the NYSE and the annual turnover is 10 times higher
than the world GDP. The spot market accounts for over one-third
of daily turnover.
Like any other market in the world, the prices of the currency
are set by the supply and demand of sellers and buyers. However,
there are other macro factors that play in this market. Demand for
particular currencies is also influenced by political events, economic
growth, inflation and other economic factors like interest rates,
central bank policy etc. Many events and reports like GDP growth,
unemployment levels and retail sales detail the levels of a country’s
economic growth and health.
How to read a forex quote?
A forex trader might buy U.S. dollars (and sell Pounds) if she
believes the dollar will strengthen in value against Pound. If the
pairs move in the desired direction then she makes profit.
The forex market uses symbols to designate currency pairs such as
the pound is symbolized by GBP (First two letter symbolizes country
name and last letter symbolizes currency name), the U.S. dollar is
USD, and so the Pound/U.S. dollar pair is shown as GBP/USD.
The currency on the left (GBP) is the base currency and is always
equal to one unit and the currency on the right (USD) is called
the counter or quote currency. The value of GBP/USD is 1.2820
which means 1 Pound is equals to 1.2820 USD [5-9].
J Stock Forex Trad Vol. 9 Iss. 4 No: 270
OPEN ACCESS Freely available online
Key forex definitions
The following are the key forex-related definitions:
Pip: The lowest increment in which a currency pair is priced.
EURUSD is 1.1820, when it moves to 1.1821 then it calculated
1 pip move.
Spread: The difference between the Bid price and Ask price for a
currency pair.
Leverage : It allows a trader to trade with higher amounts with less
capital. A leverage of 1:500 means a trader only need 200 USD to
place a 1,00,000 USD trade.
Exchange Rate: It is the value of a base currency against a quote
currency.
Bid: The price at which the market maker/broker is willing to buy
the currency pair.
Ask: The price at which the market maker/broker is willing to sell
the currency pair.
Forex trading sessions
The 24 hour Forex market can be broken up into four major trading
sessions. Below are the open and close times for each session:
• New York Session: Opens at 8:00 am and Closes at 5:00 pm
EST (EDT)
• Tokyo Session: Opens at 7:00 pm and Closes at 4:00 am EST
(EDT)
• Sydney Session: Opens at 5:00 pm and Closes at 2:00 am EST
(EDT)
• London Session: Opens at 3:00 am and Closes at 12:00 noon
EST (EDT)
And so, there are some hours when two sessions overlap each other:
• New York and London Session: 4 hour overlap between 8:00
am-12:00 noon EST (EDT)
• Sydney and Tokyo Session: 7 hour overlap Between 7:00 pm-
2:00 am EST (EDT)
• London and Tokyo Session: 1 hour overlap between 3:00 am-
4:00am EST (EDT)
The best time to trade forex market is when there is an overlap
ongoing between the sessions. During overlaps, the volatility in the
market increases which results in greater opportunities. More than
70% of the total trades happen during the U.S./London markets
which is the heaviest overlap within the markets.
What is price action?
Price action is the study of price movements in a market, with
no indicators required. It is a trading technique that allows a
trader to read the market to identify any clues on where the
market could move next. With price action, traders ignore the
fundamental analysis factors and focuses more on recent and past
price movement. They find support and resistance, trend lines, and
assess where the price is in relationship to these geometric points.
With indicators and indicator combinations, the variations and
the outcomes are endless. No two traders will interpret it in the
same way, as each will have his or her own interpretation, rules and
strategy. The reason price action works well, is because everyone
is looking at the same chart, and same time frame. A daily chart
2
Uddin MC.
of GBPUSD looks the same on our chart as it does to every other
trader around the world. When a large percentage of traders have
the similar levels on their charts, then the price action respects
those levels.
Price action trading has various disciplines which can range from
Japanese candlestick patterns, support and resistance, trend lines,
channels, price bands, break-outs, high and low swings, and chart
patterns.
What is confluence of price action disciplines?
According to Merriam-Webster, the word confluence means: A
coming or flowing together, meeting, or gathering at one point.
Confluence signal incorporates several technical analysis methods
and thus it becomes a very powerful trading strategy. Confluence
of price action trading is simply combining more than one trading
technique or analysis to increase the odds of winning on a trade.
In the world of Forex trading, the term confluence refers to the
intersection of two or more key levels or areas of value. The
advantage of confluence comes down to probabilities. Which
means the trend lines, horizontal levels, and even channels form
in a level or zone and give traders a better entry signal as these
intersections provide some of the best zones to watch for buying
and selling opportunities. The number of market participants are
more likely to gather around in an area where two or more factors
signal for a same decision.
These intersections are usually formed by the following:
• The formation of any Pin bar, inside bar or engulfing bar in
the chart
• The crossing of a trend line and a support and resistance level
• The crossing of a channel, flag pattern or any other chart patter
The most common type of confluence occurs when a trend line
intersects with a horizontal support and resistance level. These are
the most used areas to watch for buying or selling opportunities.
Although the best area to watch for entry opportunities are those
formed by a trend line, a horizontal support resistance level, and
a Fibonacci. When we find such a combination, it will be a wise
decision to keep that pair and level on our watch list.
We have to keep in mind that some of the best areas of buying
or selling opportunities are obvious and therefore require little
Figure 1: USDCAD 4-hour confluence chart.
J Stock Forex Trad Vol. 9 Iss. 4 No: 270
OPEN ACCESS Freely available online
effort to find so we should not try too hard to find these areas of
confluence. Let’s have a look on the intersection of a few price
action levels USDCAD 4 hour chart (Figure 1: USDCAD 4-hour
confluence chart).
We can see how the trend line intersects with a candle resistance
level and channel resistance which gives us an area with three
intersecting levels as opposed to just one standing on its own.
Of course, there is never any guarantee that the USDCAD will
bounce back from that level. Instead it may end up blowing right
through this confluence of resistance. But the high number of
selling pressure developing in the area ultimately results in favor
of the bears.
Looking for intersection of key levels is an excellent way to find
high probability setups because these areas of confluence tend to
attract more buyers or sellers resulting in a reversal or continuation
of the current trend.
FOREX TRADING STRATEGY SET UP
A successful Forex trading strategy is one of the most important
aspects of Forex trading. It requires putting together multiple
aspects to formulate a trading strategy. It involve sitting in front of
a computer screen, analyze the markets, looking for trading signals
and taking decisions whether to buy or sell and executes trades.
In order to make profit, traders need to identify hidden strength
and weakness of the market and should focus on eliminating the
number losing trades and achieving more consistent and profitable
trades.
We would set up a checklist that we follow before we take any
trades. The combination of price action levels is not the only
criteria for entering a trade. There are several other confluence
factors that come into play to achieve the most profits while using
the least amount of risk.
There are several factors such as trading with the trend, using
proper price action signals and always maintaining a proper risk to
reward ratio (1:2 or 1:3). So regardless of how good a setup looks,
we always have to remain disciplined and use an appropriate stop
loss strategy. After all, as Forex traders we only have two options-
buy or sell.
By using a simple checklist, we will be able to quickly and easily
identify the best setups. There are eight steps that should be taken
into consideration before we place any trade.
3
Uddin MC.
Step 1: Moving to the daily time frame
As we will follow the price action trading strategy, we would follow
a very simple trading strategy which allows us to make profit in
both the bull and bear markets and without any indicators. So we
will start analyzing the charts with time frame.
The daily charts offers a bigger picture of what’s happening with
the price action and provides more reliable signals. We can use the
4-hour charts and 1 hour chart for day trading, but the daily charts
work best.
Price action signals are more reliable once we move from the lower
time frames to higher ones. When we use New York close charts,
the last hour of each session (4 pm and 5 pm EST) can be extremely
helpful in determining a market’s likely path forward because it
shows whether buyers or sellers won the battle for that day.
We have to keep in mind that the daily time frame will usually give
us the best signals as we are trading with price action.
The London and New York sessions tend to be more liquid than
the Tokyo or Sydney session. But as we are trading at a higher
time frame such as the 4-hour or daily time frames, these sessions
become less important.
Step 2: Drawing key support and resistance levels
This is the most important step as it is impossible to identify
favorable trades without them. The first thing we should do when
opening a new chart is drawing the key levels- horizontal areas,
trend lines and chart patterns. It provides us a blueprint of what to
do next. It helps brining the market to us. So once we have these
levels identified, it’s just a matter of sitting back and watching to
see how the market reacts when it gets in the identified levels. We
can divide support and resistance levels in three category.
Horizontal support and resistance: Whenever we are marking
support and resistance levels, we should begin with the higher time
frames which allow us to identify the most important areas and
disregard the rest. If we use intraday time frame such as the 30
minute or 1 hour then we might get bogged down by insignificant
levels.
News causes too many price spikes in the market and can distract
us from what’s important. Once we have an accurate big picture
view from the daily and weekly time frames, we can move down to
a 4-hour chart or even 1 hour chart to fine tune as necessary.
Trend lines: We have to identify possible support or resistance
level within a trending market. We will draw all possible trend lines
in the chart to find the best trading opportunity in the break of the
swing highs or swing lows.
Chart Pattern: Wmost effective chart patterns which include the
head and shoulders, channels (bull and bear flags), and we will look
for the edges (rising and falling) pattern. We will look for the most
precise and easily found level because if we have 30 or 40 viewable
levels on a chart, we won’t be able to place a trade. So, by only
paying attention to the most obvious levels we get a greater chance
of finding quality trade setups.
Step 3: Evaluating momentum
There is a saying, “the trend is your friend”. Although it is one of the
oldest sayings out there, but it’s also one of the most accurate one.
The strongest trend momentum or market’s order flow that
continue for days, weeks, months are backed by banks and hedge
J Stock Forex Trad Vol. 9 Iss. 4 No: 270
OPEN ACCESS Freely available online
funds. So instead of trading against them we would rather trade
with these guys.
Step 4: Watching for price action signals
In the previous steps we have identified key support and resistance
levels and evaluated the market’s momentum using the daily time
frame. Now we are sure whether the market is in an uptrend, a
downtrend or range-bound.
If the market is in an uptrend, we would to begin watching for buy
signals from key support and if it is downtrend we would do the
reverse.
There are three types of candlestick patterns we look for during a
trading week namely pin bar, engulfing bar and inside bar. While
looking for trade setups, we have to be sure that we have scanned
the charts properly and there is a confirmation with the price
action signal.
Step 5: Watching important news, speeches and events
As soon as we have completed all the steps earlier, then we have
to check the economic calendar for that day and the following
day. Normally forex factory is the best and mostly used economic
calendar. We need to check if there is any high impact news of the
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
pairs moves in the same direction most often as the correlation
among them is very strong. So, if we see any event is coming then
we should wait for it to pass because during this time the market
becomes noisy and it can change its direction with the result of
the event. So after the noise is over and market is clear from all
biasness we will place our trades.
Step 6: Identifying entry point
We will use price action and confluence before we enter any trade.
A favourable risk reward ratio and a confirming price action signal
are necessary to make a trading decision. We can make a watch
list which means selecting the number of pairs that we understand
most. Maintaining a Watch List is one of the best ways to reduce
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
trade set ups. We will create our plan of attack for each week of
that selected pairs. Without a watch list, we have no compass to
guide our trading.
We draw the key levels, check the price action signals prepare our
watch list and then when the market opens, we sit and stare at our
screens. We find a favourable position and we enter a trade.
Step 7: Identifying exit points
Before we enter any trade we have to define a profit target and a
stop loss level. Many traders only identify a target and forget about
their stop loss.
In order to calculate the risk we must have a stop loss level defined.
So we will use the support and resistance levels in both identifying
and existing from a trade. We don’t need to catch the entire move
but the majority of the swing to make a profit.
Step 8: Calculating and managing risk
Once we have identified our exit points for the trade, now it’s time
for risk management. For example, a setup with a 50 pip stop loss
and a 150 pip target is (1:3 risk reward ratio). Similarly, if we risk
$100 and we want to make $300, the risk to reward ratio is 1:3.
4
Uddin MC. OPEN ACCESS Freely available online

When calculating the risk of any trade, the first thing we need to
do is determine where we should place the stop loss. Once we have
the stop loss placement identified, next we have to determine the
trade lot size.
Let’s assume, we have a trading account with 10,000 US Dollar
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.
Next we have to check the previously identified stop loss and take
profit levels. Let’s assume the stop loss level is 50 pips away from
the entry price and the take profit level is 100 pips away from the
entry level. So the risk reward ratio is 1:2.
Now we have to set at which lot we will make the trade. Here we
will use a simple calculation. We will set such a trade lot where
50 pips loss equals to 100 USD loss. As we know, if we trade 1
standard lot then the variation per pip will be 10 USD so if we
trade 0.2 volume then the variation per pip will be 2 USD. So, 50
pips loss will be equal to 100 USD loss in monetary value. In this
way, we can minimize the risk of trading.
If we follow the steps described earlier then trading Forex won’t
be complicated. We will no longer feel the need to sit in front of
the computer hours after hours searching for setups. Instead, we
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
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.
be evolving as a trader. Now based on the steps mentioned earlier,
we will start analysing the market and taking trades. After taking a
number of trades we will analyses the result of the trades and will
evaluate our strategy.
METHODOLOGY OF THE STUDY
There are many characteristics and skills required by traders to
be successful in the Forex markets. The ability to determine the
various aspects and factors of the market is important for the
traders to win this game. If a trader does not know what are the
goals and the rules to enter a trade, then greed and emotion will
take over and make him lose money.
For this reason, the first step of this project was to learn the
various disciplines of price action trading and establish a trading
plan. With the understanding of price action trading strategy, we
mastered different analysis techniques to construct a composite
trading system.
In this paper, we first described the entry and exit rules for any
trades, then we set our money management strategy and finally we
have constructed our course of action to enter a trade. Then we
have made 267 trades in MT4 platform to evaluate our proposed
confluence strategy.
ANALYSIS AND FINDINGS
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
project. In other words it has no end date of it as we will constantly test period from July 01, 2020 to 23rd 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

J Stock Forex Trad Vol. 9 Iss. 4 No: 270 5

Uddin MC. OPEN ACCESS Freely available online

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

J Stock Forex Trad Vol. 9 Iss. 4 No: 270 6

Uddin MC. OPEN ACCESS Freely available online

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%.
We see from the graph that the highest number of trades
Number of win trades vs. Number of loss trades: (Graph 1,
was on December which was 52 and the second highest was
Figure 2)
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

J Stock Forex Trad Vol. 9 Iss. 4 No: 270 14

Uddin MC. OPEN ACCESS Freely available online

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.
Table 12: Net profit made per month (in percentage)- Based on Starting Balance in each month.
Months July August
Net Profit (Month %) 28.24 18.55
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
Net Profit 995 300 1204 100
It is important to note that past performance of any strategy never
guarantee future performance and the trading environment of
demo account is a bit different from real account
• Interpretation: We started the test on a demo account with
5000 US Dollar. The test period was started on July, 2020
and it ended at the end of December, 2020. Each trade was
different in its nature. We took different number of trades
on different number of pairs in each month. The number of
trades, duration of trades, pairs to trade- all were depended on
only condition that is availability of a trade opportunity. So
the profit or loss we made was not the same on each month.
Like in the chart, we can see that the highest profit was made
in December which was 2458 USD whereas the lowest was
made in August which was 1190 USD.
Net profit made per Month (in USD): (Table 9, Graph 1,
Figure 15)
• Interpretation: Our starting balance was 5000 USD and it
ended with 15011 USD at the end of test. During the six
months period we made 10011 USD net profit. The net
balance started to grow in each and every months. We can
see on the chart that at the end of July the balance was 6412
USD, who rose to 9592 in September and 15011 USD at the
end of December. There was a steady growth in profit and
net balance in every month. Net Balance at the End of each
Month (in USD): (Table 10, Graph 2, Figure 16)
• Interpretation: The net profit percentage of a month is
calculated based on the starting balance. Like In July we
calculated the profit percentage on the starting balance which
was 5000 USD. The profit made on July was 1412 USD which
was 28.24% based on the starting balance. But in august we
calculated the profit percentage based on the starting balance
of August which was 6412 USD. So we can see from the chart
that the highest profit was made on July (28.24%) and the
lowest profit was made on November (14.01%). Net profit
made per month (in percentage)- Based on Starting Balance
in each month: (Table 11, Graph 3, Figure 17)
J Stock Forex Trad Vol. 9 Iss. 4 No: 270
OPEN ACCESS Freely available online
September October November December
26.17 14.18 14.01 19.58
USDCAD AUDUSD EURJPY NZDUSD XAUUSD XAGUSD
369 170 213 170 6140 350
• Interpretation: Due to the difference in wining pips in
different pairs, the amount of profit made on each pair is also
different. Another important issue is the pip value. Like for
0.1 standard lot trade on EURUSD or GBPUSD made 1 USD
up or down in each pips movement whereas it was 1.11 USD
in USDCHF pair. The 0.01 lot in XAUUSD pair made 1 USD
up or down in each pips movement whereas it made 5 USD
up or down in XAGUSD pair. We traded on 10 currency pairs
and we made the most profit on XAUUSD (6140 USD) pair
and the second highest was GBPUSD (1204 USD). The lowest
profit was made on USDJPY which was only 100 USD. Net
Profit made per pair (in USD): (Table 12, Graph 4, Figure
18) and Table 13.
DISCUSSION AND CONCLUSION
Trading Forex market is often considered as an art rather than
a science because it requires the use of practice, experience and
intuition to generate profits. Trading with confluence gives a trader
an increased edge to look for more than one element to confirm the
bias. Price action levels are no different. When price approaches to
these levels, traders look for the potential of a reversal and when
multiple price action levels exist in the same region or area, then
this confluence of price action becomes stronger and offer traders
multiple reasons for prices to reverse.
After a thorough analysis of the price action levels over the
duration of six months and taking a number of real trades based
on the strategy we can conclude that if the candlesticks (Pin bar,
Inside bad and Engulfing bar) are properly identified, the key
support and resistance levels are properly drawn, the trend lines
are properly plotted and the chart patterns (Head and Shoulder,
Wages, Channel, Flag Pattern) are properly recognized then the
chance of winning of a trade becomes 88.39%.
The main point of this project is: a trader do not need a complicated
or confusing trading strategy to find high-probability entries in
Forex market. All he needs is the ability to recognize price action
levels in the chart. If a trader just focus on this one strategy and
master it over time then he will be able to look at any chart of any
16
Uddin MC. OPEN ACCESS Freely available online

financial market and find high-probability trading opportunities 4. DraKoln, N. Winning the trading game: Why 95% of traders lose and
and can be a consistently profitable trader. what you must do to win.Wiley trading. 2008;322.

CONFLICT OF INTEREST 5. Hayley S, Marsh IW. What do retail FX traders learn? J Int Money
Finance. 2016;64:16-38.
None.
6. http://www.babypips.com/school/preschool/what-is-forex/what-is-
REFERENCES forex.html
1. Geromichalos A, Jung KM. An over-the-counter approach to the 7. http://www.babypips.com/school/preschool/when-can-you-trade-
FOREX market. Int Econ Rev. 2018; 59:859-905. forex/tradingsessions.html
2. Ranaldo A, Somogyi F. Heterogeneous information content of global 8. https://en.wikipedia.org/wiki/Foreign_exchange_market
FX trading. 18th cologne colloquium on financial markets, University
of St. Gallen. 2018. 9. http://www.investopedia.com/articles/forex/08/3-market-system.asp

3. Baruník J, Kočenda E, Vácha L. Asymmetric volatility connectedness 10. http://help.tradestation.com/08_08/tradestationhelp/charting/

on the forex market. J Int Money Finance. 2017;77:39-56. candlestick_chart.html

J Stock Forex Trad Vol. 9 Iss. 4 No: 270 17

View publication stats