first of all , i rarely trade manually. almost over 95% of my Trades are placed Automatically Using my own EA (i will share it later)
but what about the rest of 5% ? how do i place it ?
well , let's get into it. but first , you have to Consider 3 things While Trading :
#1: Switch from accuracy to risk-to-reward
Look, I know it feels good to be right. I like being right too. But thats not what will make you money. Very few profitable traders make their money from being incredibly accurate. Its most often about having small losers and big winners.
And the good thing is that if you can do that, you dont even have to be that accurate to make a lot of money!
How nice is that? It makes life a lot easier, and trading becomes a lot less stressful.
So dont take any trades that dont have at least a 2 to 1 reward-to-risk ratio, and preferably 3 to 1 or more, and watch your results improve. (Read More)
#2: Make your stops dynamic
So many traders use a fixed sized stop and never change it. And unfortunately thats what most trading educators teach you to do.
But its not optimal.
Instead, you should be making your stops wider when market volatility expands, and tighter when it contracts. That way you dont get faked out and whipsawed when volatility is higher, and you dont take needlessly larger losses when volatility is lower.
Also, place your stops at a place where your trade idea would be invalidated.
Sometimes that means putting it beyond some support or resistance level, and at other times it means putting it below or above a wide range price bar. Either way, its not the same size every time but rather changes dynamically based on market action.
This way youre letting the market tell you where to place your stop, and that will increase your accuracy, and help you avoid getting chopped up- which can be insanely aggravating. (Read More)
#3: Watch the volume
Most traders dont know this, but volume is directly correlated to volatility. If there is a lot of volume being transacted in a particular day, the market is more likely to make a big directional move. If volume is light, were more likely to be range bound in a smaller range.
By watching volume on the day as a whole, you can quickly get a sense for whether you should be going with the move (i.e. jumping on board a sharp price move), or fading it because its likely to reverse.
Without knowing the volume picture on the day, you might do the exact opposite. In fact, most traders do, and understanding the volume/volatility dynamics of the market is what professionals do so well. (Read more about The Volume/volatility Here & Here)
with all that said. you have no reason to fail most of the times
Now Let's Talk About The Strategy.
Time Frame : D1 & H4 ONLY !
Pairs : All Pairs. and when i say all , i really mean it (even Exotics / Metals / BitCoin... etc)
Smoothed Moving Average (5) Applied To RSI Window
MACD With Default Settings For Filtering (Optional)
To Apply Smoothed Moving Average To RSI Window :
Drag & Drop The Moving Average Indicator Over The RSI Window and Change Apply to "Close" To "Previous Indicator's Data"
Entry Rules :
Aggressive Entry :
Buy When RSI Cross Above SMMA
Sell When RSI Cross Below SMMA
Filtered Entry :
Buy When RSI Cross Above SMMA + MACD Histogram Above Zero
Sell When RSI Cross Below SMMA + MACD Histogram Below Zero
Exit/Stop Rules :
ok , this is dynamic. it depends on which Pair you're trading
to know your optimal Profit Target , Apply The Template and see the average number of the pips after each cross
the safest way is to exit after 1 candle close (for Daily Time Frame) or to set a Break Even When you get at least 50 pips (500 for 5 digit brokers) and let the profits run
Set Stop Loss above/below the previous candle high/low (For Daily Time Frame)
Download the Template and apply it on GBP/JPY D1 Time Frame to see more entry examples explained
the reason behind using H4 and D1 Time Frames with such high volatility pair is that this strategy almost guarantee +90% that you get at least 50 pips in your favor after each cross even with unfiltered signals. but anyway ... you can use any pair you like.
so it's a little bit hard to take losses with this strategy
Stay Green , Trade Stressless
Tarwada Method.tpl 8 KB | 717 downloads
Think Twice , Code Once.