Forex

How ecs.SWAT Method Keeps Your Trades Safe

August 5, 2017

6 min read

Christopher Svorcik

CEO

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How ecs.SWAT Method Keeps Your Trades Safe

Dear Traders,

Did you ever enter a couple of trades that really look good at first.. but then suddenly, you see the setup fail? Many traders shrug their shoulders and move on… but they do lose a valuable opportunity to learn.

Earlier this week we had a brave trader that decided to take matters in his own hands. He wrote us at EliteCurrenSea and asked our opinion of his two trades setups, including two screenshots so we could see his charts.

This takes courage and we highly recommend traders to share and reach out to us in a similar fashion via ecs site or twitter.

We compared his trades with our ecs.SWAT method and we saw a massive difference:

His 1st loss was a win with ecs.SWAT
His 2nd loss would have been avoided with ecs.SWAT
The 2nd loss could even have been traded as a reversal

The First Setup AUD/CHF

The first trade was entered as a long setup at a bullish support zone, indicated by the arrows in the image above. The bullish candlestick pattern at support confirmed the bounce and our friend took the trade setup. The stop loss was placed below the candle low.

Now let’s take a look at the ecs.SWAT charts. (Be aware that the colored candles are only used on entry charts and not on our analysis charts (we use normal candlesticks)).

The currency pair was entered long at the green arrow in the image below. The ecs.SWAT method is showing RED candles, which indicates bearishness. According to the ecs.SWAT rules we would be thinking this:

Trade is up as moving averages are bullishly aligned.
Divergence between the recent tops means that a retracement back to the 144 ema close is likely.
No entry is made when red arrows are below orange (bearish) angled moving averages, also not where our friend took the trade (green arrow).
Price hits long-term moving average and entry signal appears, which is the blue arrow.
Trade is also good according to our filter at the bottom, which shows multiple time frames and is all green.

The stop loss would be placed below the support fractals for a total risk of about 23 pips. The target could either aim for a break of the top (aggressive) or for a traditional 1.5 reward to risk (R:R) ratio (conservative). In most cases, a trail stop loss is used below new fractals.

The trade ended up moving 44 pips and would offered a sweet win of 1.5 R:R with the conservative target whereas the aggressive target missed and price hit the trail for +2 pips.

The Second Setup NZD/USD

Also with the Kiwi (NZD/UD) the trader was looking to trade the bullish bounce at a similar support zone and trend line. The long setup (black arrow in image below) failed as price quickly reverted against his position and fell through the support.

How did the same setup look on an ecs.SWAT chart?

You can see that price was in an uptrend and managed to break above the moving averages before. This is the long setup that I entered and shared as well earlier this week, which ended up for break even on NZD/USD and for +84 pips on EUR/USD.

The long setup of our friend, however, was much later and the candles were already turned RED. You can see the entry at the green arrows in the image here below.

The ecs.SWAT method allowed traders to simply skip any long setup here. Not only were the ecs.SWAT candles red but the bottom indicator was red too. Plus the special moving averages were bearish too.

In fact if anything a short trade setup would have made more sense then going long, based on the ecs.SWAT (at the orange arrow).