Trading from an Experienced and Successful FULL TIME Trader
I wanted to show my system to help some struggling traders out and give back to the community since the community has been so good to me and I am a firm believer in you reap what you sow (Galatians 6:7-9). This system is very simple and I encourage you to make it your own and take from it what you want. I will go over the rules which are VERY simple. I customized my template but what I am using is the THV Trix and Coral from the THV system which is located in this forum. Do a quick search and you will find these indicators here Special thanks to those at THV for posting those wonderful indicators. Your success at this will be determined how patient you are to wait for the BEST set ups and how patient you are to let the market do its thing and run to your targets. It will also take a little time to determine proper support and resistance, which is very simple after you learn it properly. Lets get into the system.
First of all let me explain the psychology behind the system and why I have the rules that I have.
A. I decided I wanted a system that does not go against the trend as it is MUCH more probably that a trend will continue than it will stop and reverse.
B. I wanted a system where I can determine precise entry points and precise exit points. For this reason, I am buying at Support and selling at Resistance in the direction of the market. I can very successfully determine where market will stop and reverse by looking at prior price points, so why not put it in my favor by using these points in the direction that the markets are already traveling?
C. I also wanted to get in when the market BEGINS to head in my direction. Why would I want to try to guess where its going to stop? So I needed some sort of confirmation or indicator that tells me momentum has begun to turn. I have done just that.
So basically, All I am doing here is figuring out where the market is heading and trade in THAT direction, but entering after price begins to bounce off a VERY obvious price point. Its my objective to illustrate this to those reading. Trading is very sensible, simple and fun IF you know what to look for. Markets make much sense and there is really nothing tricky and confusing about it when you understand why its doing what its doing. Now the entry rules:
1. You must be on the 15m, 30m, or 1 hour time frame. I tend to watch the 1 hour for support and resistance although the 15 minute is fine as well. The BEST entries are off of the 15m or 30m. I will also at times go down to the 5m and look for MULTIPLE ENTRIES. More on that in a minute.
2. You MUST MUST MUST be at significant support and resistance and TRADING WITH THE TREND!!!!! These are so critical and if you do not listen to these rules you will FAIL. When I say significant support and resistance you must be talking about an area that was a recent SHELF or double top being retested or triple top or triple bottom or triple top. For example, lets say price is going up and keeps hitting 1.00. Finally price breaks above 1.00 and goes to 1.0050; price then comes back down to retest the 1.00 area. Because the trend is UP you want to go long when you get a signal at that NEW support level which was formerly resistance. You determine the trend by looking at the color of the coral. The coral should be green if you are going long and red if you are going short. The next higher time frame should match also! Otherwise you are not in a valid trend.
3. Stop loss is below the last swing low. Take profit is at last swing high AND AT LEAST equivalent to the stop loss in terms of pips. There is NO RISKING 50 PIPS TO MAKE 25. Your success is by making at least 50 pips. Your risk to reward must be 1:1 or better!!!!!
4. You enter only after getting a green or red arrow with DOTTED (or straight on some occassions) line. The Dotted line is a hidden divergence and telling you the market is oversold or overbought. The straight line is another form of divergence telling you the price and THV is not in sync and something is about to change. The HA candle must also have turned your color. Red if its a sell and green if its a buy.
Remember, you are capitalizing on a retest of significant support which has been broken and now is being retested WITH THE TREND. DO NOT PLACE COUNTER TREND TRADES.
I have been trading for nearly 10 years and this system works on all currencies, commodities, stocks, etc. It works best when you have good support resistance present. I usually will go to the higher time frame to see if there is any divergences as well. For example, if im trading off the 15 minute and a divergence pops up on the 30m or 1 hour (solid line on chart) and says price may be wanting to go the other direction I stay OUT of the trade.
This system is best during the London session and New York Session and I do not recommend trading it out of London Hours.
Hope this helps someone. I have attached pictures to illistrate.
A LITTLE ABOUT ME:
I have been trading for about 10 years and I started off trading penny stocks; I then moved to larger cap stocks and options. Several years ago I met a very successful forex trader and I started trading forex, as there were many pros (vs cons) that the other markets did not offer. I have received teaching from some of the BEST traders in the stock and forex markets; many of whom worked years on the trading floor of the NYSE and other major markets. Some of my mentors were actual market makers, and have taught me the tricks of MM's and how exactly the market works. I quit my very well paying job several years ago to trade FULL TIME and thats exactly what I do. I am a professional trader and TRADING is all that I do for a living. I have tried every system and thing you can imagine in finding my way in trading and I am sharing with everyone here what works the best. I trade about 2 hours a day and I rarely hold positions overnight. I am by nature a very conservative trader and I am fine with only placing 1 - 3 trades a day. QUALITY OVER QUANTITY. I wait for market to tell me what it wants to do and I do not try to GUESS what I think its going to do. My win rate is around 80% and it is not uncommon for me to predict MAJOR market moves before they happen and even tell you exactly where the markets are going and where they will reverse. Markets are DYNAMIC AND VERY PREDICTABLE.
A LITTLE ABOUT THE MARKETS:
The markets often will give signals about what it wants to do before it happens. These are the areas I capitalize on. It's called CONFLUENCE. The more confluence and SIGNS the markets are giving about what it wants to do the higher the chances you have of winning a trade. If I dont see an abnormal amount of signs the market wants to do something I stay OUT of the market. I do trade several different currencies and commodities, basically anything that is moving in a sensible manner. I DO NOT trade markets where there is alot of wicks and up and down (choppy) price action. If markets are not moving in a sensible manner I STAY OUT. Rarely is there a day where a high quality trade set up doesnt appear in my 2 hour time window of trading.
Anyone that has questions or wants clarity on anything please just ask. Im more than willing to HELP and impart the wisdom and knowledge that I have about the markets, money management and anything else that will relate to trading.
HERE ARE THE INDICATORS I AM USING POSTED BELOW! (the three ex4 files and tpl file)
The candles are simly Heiken Ashi Candels that come with any mt4 platform. If for some reason one of those dont show up (my friend had that issue) just download the thv zip file which is posted (V3 (1).zip.
Please keep in mind you will have to go through and delete all indicators on your chart except for the THV3 Coral THICK.ex4 and THV3_T3.ex4 and THV TRIXV4.01 Div.ex4 if you download the zip. Thanks
THV3 Trix v4.01 Div.ex4
In my opinion, your last pic doesn't show a great example. Your entry signal is about 30 candles (15 hours) before the price start going in your favor.
Just a note ... not a critisism
Ferru, yes it did take several hours to go in my favor but thats how the market often works. Especially when you are trading the asia session. Thats why I said trading London is BEST. I realize most traders dont have the patience to wait on a trade that long. If it helps at all, there was an entry signal on the 15 minute during London session at the VERY start of that massive move to the target area off of that support area.
When price move in your favour long time after your entry, I don't consider that the entry signal was right!
I am enclosing an actual trade and WHY I took the trade as illustrated in the photograph. I will also explain here what I saw.
1. I noticed a huge shelf forming on the end of Nov 4 and early Nov 5. I KNEW if market could blow above that and come back and retest it the market would STOP there because it would act as a floor for the market. Remember, MAJOR shelf areas that market struggles at for long periods of time when retested (especially the first time!!!!!!!!!!!!!!!!!!!) will act as great support!
2. I then noticed markets dropped off this shelf and came back up to retest it around 9:30 on Nov 5 and failed AGAIN. At that point I thought to myself, this is going to be a MAJOR MAJOR area for price to bounce IF it can successfully move past it and then come back. Remember, the more times an area is hit (especially on the higher time frames) the more significant it will be when it comes back around to it.
3. Finally at about 13:30 market BLEW through it with FORCE. This told me this was a LEGITIMATE BREAKOUT and an uptrend was in place! Not only that, the CORAL turned green INDICATING markets were moving higher.
4. Markets then started to come back into this support area which I have noted by the TWO RED LINES. Again, I KNEW if price could come back into this area the likelyhood of a bounce was at least 80-90%. Areas like what we saw almost always hold up ESPECIALLY WHEN YOU ARE TRADING WITH THE TREND!!!!!
5. FINALLY! We have an arrow. As per the rules, we had a green candle so we enter on the yellow line. Also note a green dotted line appeared which is an indication that the price is overextended. Think about this: YOU ARE IN AN UPTREND. Price has pulled back to SUPPORT, MAJOR SUPPORT...and price is overextended. What is the likelyhood of a move up. ITS HUGE. 90% at least. Those are the set ups you want to look for.
6. I also noticed price was at the Coral which is a 60 period moving average, a very common bounce area as well, so this was more confluence and added even MORE support. This was virtually a PERFECT Trade set up.
7. I entered the trade and IMMEDIATELY place a stop. Normally, I would place a stop below the last swing low which was at .9980 or so...but that was pretty far away....either this trade is going to do what I want or its not. Plain and simple. I looked on my chart and could not help but notice that shelf. I realized this too would be very good support because the market stopped there MANY times before. This area is illustrated by the blue dashed line. It would be at this point I was willing to accept that I was WRONG about the trade. And again, look how far down the THVTRIX line was when the arrow came in...it was WAY OVERSOLD....and price was very unlikely to keep going because it was so oversold. For that reason I thought the blue line area was MORE than a sufficient stop.
8. My target. When determining targets and stops you need to determine, where did price stop before? So I looked to my immediate left and noticed price stopped at .9940 TWICE. That was my initial target. I could have placed it at .9950 however, those are wicks and the market may not respect it. Market often respects both wicks and candle tops/bottoms as areas of support and resistance. Because at that point I was definately at my 1:1 reward to risk I was happy with that as a target. For this trade I was risking 15 pips plus spread (about 2 pips for me) and a target of 25 pips. MORE THAN sufficient risk to reward. I will note that because you are trend trading it is not abnormal for it to continue going many many pips, even hundreds of pips.
Now I just sit and wait to collect my pips Market did EXACTLY what I expected.
I have one more trade I want to illustrate today. I took this trade early in the week and I even pointed it out to some trading friends before it happened and even mentioned where the market could potentially go and I was 100% correct, within a few pips. So, I want to show this and how dynamic this system is when used properly. This is an "A Set up" and what I look for when trading. Again, they happen everyday in the London Market.
1. I could not help but notice price was hitting the same level OVER AND OVER AGAIN. This area was about 1.1440. I told myself, if this market ever drops below this level, the retest of this will be the trade of the century. Why? Any area that has acted like support for that long and that many times is almost a guaranteed failure when price comes back up to retest it after a REAL BREAKDOWN. Notice I said real breakdown. There were two fakes in this chart. Can you find them? On november 1 you see two large wicks. Price QUICKLY came right back up to support. This is NOT a real breakdown. A real breakdown will not snap back like that!!! When that happened the market was saying to me...OKAY SORRY BUT WE ARE NOT READY TO BREAK DOWN.
2. FINALLY, On November 5th around 11:00GMT the market proceeded to break those lows. However, this time there was no quick snapback. We were looking at a REAL breakdown. Notice several candles that spiraled down before the retest.
3. I then became very anxious as I watched for a legitimate retest as I knew IF price comes back into that area noted by the blue line, which is now resistance because it was at one time MAJOR MAJOR support, failure is almost guaranteed. Another thing to note, when you see an area of GREAT significance like this, often times the reaction is VERY DRAMATIC. Hundreds of pips often ensues. So, I told myself and some other traders who I connect with, if this happens you could be seeing a MAJOR MAJOR market move.
4. Well I watched for the move up and we TAGGED that Major resistance level. I thin noticed the red arrow which was telling me HEY ITS TIME TO SELL!!! And you had the dotted red line which was telling me price was over extended. Another thing to note. Notice the swing High with that candle and end of the dotted line. Now notice the high at the beginning of that dotted line (9:30GMT). Notice how much lower price is at the end of the dotted line but yet if you look at your THV at the bottom of the chart the THV is WAY higher in relation to the price at the corresponding levels. This is a HUGE indication that price is way way too high and will soon fall.
5. I also noticed the moving average was RED. This told me the trend was in fact down (as if you cant tell by the movement of the market LOL). Also, the next higher time frame (30m) said trend was down because its line was red. This is added confirmation that Im trading with the trend and i will rarely take a trade if BOTH are not in sync with each other. Also notice the positioning of the Moving Average (red coral). Price came up to it and thats where it failed. Again, the moving average will OFTEN act as support or resistance (resistance in this case). Another sign the markets were throwing at me. ALL OF THIS CONFLUENCE TOGETHER TOLD ME MARKETS WERE ABOUT TO FALL.
6. Well, as soon as I got my red arrow to sell at resistance I entered the trade! My stop loss was immediately placed above the last swing high as that was the level I was willing to admit to myself: If price goes above that area I have made a mistake! My target was also placed which was at 1.1410 BECAUSE that was the last level the market had a significant low at and ALSO you will notice the prior fake breakdowns on November 1 were at that same level. PAST PRICE TOLD ME MARKETS WOULD POTENTIALLY REVERSE HERE.
7. The trade played out exactly as I had guessed and even went much further, which I knew was a great possibility. Remember, a breakdown of MAJOR support like that often yields MASSIVE moves in the market. What caused this breakdown? NZD news came out. You may choose to trade or choose not to trade news but I will tell you the news is often the catalyst for major moves like this. The market knew where it was going, it just needed something to trigger it: NEWS
As a side note, in the event of news if I am in a trade I normally place a breakeven stop so that I dont lose in the rare event news takes it the OTHER WAY. Also, when im about half way to my target i put on a breakeven stop so that a winner does not turn into a loser.
In the end: 28 pips of risk to make 27 pips of profit with the potential to MAKE MUCH MORE.
Very nice! Could you, please, post a screenshot of your account summary (trade count; average win/loss (pips); win%;account growth chart)? ..or at least activate trade explorer?
It would make the story much more impressive and believable.
Be careful with systems because there is nothing consistently systematic about price, especially on lower time frames
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