Some traders use the words interchangeably, I do not. A strategy is a set of conditions that signal you to enter the market, for example, A moving average crossover, RSI going into oversold/overbought and then reversing, Divergence, etc. and combinations thereof. A Methodology, on the other hand, is a systematic approach to the market that a trader does on a daily basis. It is this process that leads to trade set-ups. The following is how I approach the market each day: First, I do a top down analysis starting with the monthly moving to the daily and then the 60 min Timeframe. Second, I do a strength and weakness analysis of each of the following currencies AUD, CAD,CHF, EUR,GBP,JPY,NZD and USD. From this I derive their relative strength from the previous day. This gives me a) A directional bias and b) the best pair to trade (Strongest v weakest) Third, in the hour before the European open, I analyze the 60 min chart, primarily focusing on how they correlate with Ichimoku theory. Fourth, I drop down to the 15 min chart, which what I trade off of. I look for top down alignment on each pair. The pair with the best alignment is the one I will trade. Fifth, using Ichimoku and alignment, I either confirm, or change the directional bias from strength/weakness analysis. Sixth, I mark the most recent Support/resistance, which I call the Asian box. Seventh, From all of the above, I now have the best pair, direction and usually both a breakout entry or pullback entry. Eighth, correlation, I look for all of the same currency to move together, For instance this morning, as shown in the chart above, only GBPAUD was a Buy breakout, while all the other GBP pairs were sells. Hence the reason I did not post or take the GBPAUD trade. (which would have gotten about 10 pips before crashing). Ninth: Execute, collect your money, go to the Beach.
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