LEARN HOW TO TRADE
This system, or “way” of trading is heavily influenced by (BV) Bob Volman’s work from his excellent book, “Understanding Price Action”. His book really helped me tie together the majority of what I have learned thus far. I've also added certain aspects of Stacey Burke's teachings that I feel compliment how I see the markets. Finally, I've recently been enjoying Tom Hougaard's book, "Best Loser Wins" which has given me a few tips on trading psychology which is an area that we can all get better at.
To me trading should be a constant learning process and one that is highly profitable. As I deepen my knowledge I will certainly add or even subtract parts of my method.
Chart Setup: (I prefer to use trading view for my charts)
Pair: EURUSD – 4 decimal chart
Timeframe: 5-minute
Trading View Indicators: 25 EMA HIGH / LOW Channel
Every trader is most welcome to add what they need to their charts. EDIT (Oct. 2022)
My Extra Indicators:
- Previous Day High and Low
- Round Num & Q. Lev
- FX Market Sessions
My Vertical Axis (Price) has a 20 pip spacing and the Horizontal Axis (Time) is spaced to show approx. the last 8 hours of price action
Risk Management:
STOP: BEYOND a nearby LTF PEAK or VALLEY
TARGET: NO SET TARGET [One position to gain 20 pips (Asian Session best to use 10 pips)]
ENTRY: Multiple At Market Orders on a 1 pip Break of each "Action" Candle.
Money Management:
Until I can prove to myself that I can trade my method in a consistent and process orientated fashion my individual preference is to only have a maximum open exposure of less than 2% of my account at a time across all of my positions. If I am satisfied with my process and my consistency over at least a quarter of a year I should be confident enough in myself to start dialing up my maximum exposure risk.
Simple Questions to help me keep my trading focused and efficient in the live market:
1. WHAT IS THE TIME?
- Am I trading in my three-hour trading window?
- What hour am I trading in? 1st, 2nd or 3rd?
- What quarter of the hour am I trading in? 1st, 2nd, 3rd or 4th?
- When are the major news items scheduled for today?
My chart is currently set to Central European Summer Time. Therefore, all times I quote here are in that time zone. [As of 2011, all member states of the European Union observe summer time (daylight saving time), from the last Sunday in March to the last Sunday in October. States within the CET area switch to Central European Summer Time (CEST, UTC+02:00) for the summer.] en.wikipedia.org/wiki/Central_European_Time
[24 hour time]
TKY WINDOW – 2 to 5
UK WINDOW – 9 to 12
NY WINDOW – 14 to 17
2. IS PRICE TRADING AT A KEY AREA ON THE CHART?
KEY AREAS:
- Near 50 or DOUBLE ZERO (DZ) levels
- Near PD H/L, TKY H/L, LON H/L or NY H/L
3. WHAT IS PRICE DOING NEAR THIS KEY AREA?
- Is an HOURLY PEAK / VALLEY forming near this key area
- Is price showing BUILD-UP in a pattern or box?
- Is there DOUBLE PRESSURE being set up? (Think LIQUIDITY)
Double Pressure
This is when both bulls and bears might have to trade in the same direction if a significant break were to occur.
4. AM I READY TO START TRADING?
- Am I physically, mentally ready to trade today?
- Have I had enough sleep / food / water?
- Have I watched my "book of truths" powerpoint?
- Is my trading environment clean and ready for me to trade today?
- Do I know my risk size in $ per pip for today?
5. TIME TO START TRADING = NO MORE QUESTIONS
TRADE FOR FAILURE - TFF (REVERSAL TRADE)
TFF BUY
- Wait for two consecutive hourly Lls @ a 50/DZ level and @ KEY AREA(PDL/LOD/TKYL/LONL/NYL)
- Start buying once a bullish M5 candle closes inside the drift from a potential higher hourly low
- Keep adding on every 1/2 N progression of price in my trading direction.
- Protection stops set at 2N from Entry
TFF SELL
- Wait for two consecutive hourly Hhs @ a 50/DZ level and @ KEY AREA (PDH/HOD/TKYH/LONH/NYH)
- Start selling once a bearish M5 candle closes inside the drift from a potential lower hourly high
- Keep adding on every 1/2 N progression of price in my trading direction.
- Protection stops set at 2N from Entry
TRADE WITH THE DRIFT - TWTD (TRENDING TRADE)
TWTD BUY
- Wait for a strong directional price move up that causes the M5 drift lines to be white and sloping up
- Let price return to the drift (1st touch has higher probability of being a strong trade)
- Wait for a white M5 candle to close higher than previous candle's extreme and then enter on a 1 pip break of that candle's high or at market.
- Keep adding on every 1/2 N progression of price in my trading direction.
- Protection Stops set at 2N from Entry
TWTD SELL
- Wait for a strong directional price move down that causes the M5 drift lines to be white and sloping down
- Let price return to the drift (1st touch has higher probability of being a strong trade)
- Wait for a black M5 candle to close lower than the previous candle's extreme and then enter on a 1 pip break of that candle's low or at market.
- Keep adding on every 1/2 N progression of price in my trading direction.
- Protection Stops set at 2N from Entry
$$$ BE HOPEFUL IN A PROFITABLE POSITION AND BE FEARFUL IN A LOSING POSITION $$$
$$$ DO WHAT THE 90% CAN'T $$$