Quick Guide to: Z Pattern Trading

A quick and comprehensive guide to trade with the Z Pattern.

This guide will run you through the steps I take to analyse market movements and identify where to pull the trigger. All the way to my exit strategy.

First thing I take into consideration is which Weekday I’m trading in.

Different Weekdays have different recurring behavioural pattern. Monday trading is sometimes very slow throughout the day, or most of the action happens in the early trading hours. Friday can start off a bit slow and gains monster momentum during New York sessions but dies out pretty quick going towards market closing and the Weekend.

Time of the day is crucial too. As my trading edge plays out very well during UK and US sessions.

Early morning comes with a whipsaw and Asian market struggles to create a uniformed market condition. Whereas UK and US session create regular quality opportunities and have the volatility to meet expectations.

Keeping a keen eye on important news announcements. Not to trade around them but to anticipate when the action will kick off.

Anything red flagged on the Forex news calendar can be a catalyst to swing prices around and create new opportunities. The trading sweet spots emerge after the news release.

Everything until now is passive analysis that I am aware of before pulling up my charts. Basic information gathering all done under 2 minutes.

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The real magic happens on the charts. So I start off with a quick look on the weekly and daily candlestick chart, moving onto 4h,1h,30m,15 and sometimes lower. From the higher timeframe I spot any upcoming Value Zones on the lower I look for Price Voids .

Value Zones help me target levels, whereas Price Voids is my primary market profiling strategy. So I avoid running into noise. The more these two are in correlation the better.

Doing this gives me the ability to rapidly filter currency pairs and categorise them as pairs with potential or not.

Once that is out the road it’s all clear for signal hunting with the Z Pattern. I can take signals with confidence and open positions knowing that they are in line with my analysis.

A few valuable tips.

-Don’t always go for those massive pip hauls. They’re much more difficult to catch and take ages to play out. Regular trades that reach targets fast are much much more rewarding. Here is an eye opening short article revolving around this subject.

-Sometimes a good trade idea requires a ridiculous stop loss. That’s when Forex bargain hunting comes in handy. We used the same technique to risk as little as 6 pips and squeezed out over 120 pips! On this live trade.

There is a lot of information gathering done before pulling the trigger. But without it I couldn’t pull it off with confidence over and over again.

I hope you enjoyed this step by step article. Feel free to ask me any questions or share your opinion in the comment box below. You can contact me also at miadkasravi@zfxtrading.com and please like this post if you found it useful.

‘Best,

Miad

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