Greetings.
I am here to post one of my systems for trading.
Those who would like to chime in on this strategy are welcome to, as this system is VERY flexible. There are (no hard rules) and this is meant to be more of a guide that you can use in addition to whatever trading method you may already have.
I have tested many complex trading systems, coded profitable EA's that turned out to have huge draw-downs or that only worked in certain market conditions e.g trending/ranging markets, and I have concluded that there are many different ways to trade and make a profit.
The key (I believe) to successful trading is finding a system that fits your personality, lifestyle, risk tolerance, and equity. Those things are extremely important to consider before you start trading imho.
Anyways, so here it is.
UNDER THE MICROSCOPE
The first thing you must do is decide what pairs you want to trade. For me, I look at all 28 major FX pairs. Though, I am sure this can work on ANY instrument as this strategy is based mainly around simple supply and demand, volume, and market structure entries.
The second thing to do after deciding what pairs you wish to trade is to go to start with the DAILY TF. You may be able to go as low as the H4 or as high as the Weekly but for my life I like using the Daily TF as I only need to check the charts once per day. So for me, the first thing I do every day is analyze all 28 pairs and see if any of them qualify as possible trade opportunities.
Some things to look out for on your higher TF is VOLUME, or lack there of if looking for reversals. It is a bit hard to explain so I will post some examples of my trades. An easy way to do this is to look at SR zones on the daily chart and identify areas where the market may reverse, or continue a current trend. An easy pattern to remember is when you see one daily bar engulf the previous days high/low especially after a large move, continuation of a move, or at a SR zone.
Here is an example on USD/CHF that I had on my watch list yesterday which I did take.
DAILY CHART USDCHF
As you can see in the photo above the price here is clearly bouncing off of a support level inside of a range. This pair has been trending down for quite sometime and now is ranging on the Daily TF. I look at many things before choosing a pair to trade but the clear things here are:
Bouncing off the support area, bullish engulfing bar indicating VOLUME, and also the interest rate decision by the FED came out as neutral (1.75%) this indicates
to me the reason behind this move is due to the fact that the price does not want to go any lower. I use many confluences to my analysis however you can be just as simple as technical but I do like to incorporate big news events such as interest rates in my decision making for even more confluence when I can.
Now you may be wondering why I call this strategy the microscope, well this is because we start on higher TF and slowly go lower to examine all lower time frames in order to gain even more confluence for our trades. I will not go into too much detail but for this trade the H4 H1 both also looked good for a buy e.g breaking structures to the upside, more engulfing candles etc. Hopefully you get the point.
I then use either the H1 or the 15 minute chart for my entry and my stop. Here is an example for this trade on where I put my stop and entry based on the lowest time frame I look at.
15M CHART USDCHF
Now here you can see the microscope approach in action. Once in the lower TF this is where the fun begins. You can now incorporate whatever entry rules you like. Because I had a bias already to buy from my higher TF analysis. All I had to do now is look for an entry point. I like to enter with the volume, this is a skill that may take some time for some people to develop and maybe you might want to use a different entry style but for me I like entering this way since it usually ends up in my trade going into profit faster. I entered here due to the small uptrend on the 15 minute chart to the upside. Price was slowly creeping higher and I anticipated a break even higher after it broke the daily highs. I placed my stop reasonably below the low for that day at about 30 pips. I don't look for any specific RR but once the trade reaches a 1:1 I start to manage it. If I feel like moving to BE I will, If I feel like taking 50% off the position and letting it run I will. If I want to simply take profits I will. This all depends highly on price action and what the market is telling me, also I may take profits just because I see better opportunities and feel they are a better use for my equity.
The key at the end of the day is to achieve the HIGHEST win rate possible. If you are very careful and use as much confluence as possible and then enter ONLY when you feel it is 100% the best entry possible you should be able to win much more often than not. The key is to try and win every trade. Many people say that its all about your win rate and win % and that's true positive expectancy is important. However, the problem with thinking this way is that some traders may take a trade knowing that it may lose blindly following a strategies rules without forming a good case for trading. Focus on winning EVERY single trade you take and when you lose try and understand WHY you lost the trade. There is always a reason. The market is not random. You may lose a trade because:
1. Your stop is too tight, didn't give enough room for your trade to breathe.
2. Your stop was too big and you didn't take profits early enough.
3. Your analysis was flawed, maybe you got in a trade to early or didn't follow the rules correctly.
Try and identify why you lose and why you win in order to increase your win rate. Pick the best trades. Don't be greedy and take every single set up just because it looks good on the Daily TF. Out of all the potential trades I had on Monday I only took 2. This USDCHF buy and a buy on CHFJPY. Notice how I took those trades specifically also to hedge my risk. They both were great setups and also both included CHF one on the buy side and one on the sell side. I did this purposely. Don't take 5 different EUR sells on different pairs. Be smart, be patient, and choose the best setups each day.
I am here to post one of my systems for trading.
Those who would like to chime in on this strategy are welcome to, as this system is VERY flexible. There are (no hard rules) and this is meant to be more of a guide that you can use in addition to whatever trading method you may already have.
I have tested many complex trading systems, coded profitable EA's that turned out to have huge draw-downs or that only worked in certain market conditions e.g trending/ranging markets, and I have concluded that there are many different ways to trade and make a profit.
The key (I believe) to successful trading is finding a system that fits your personality, lifestyle, risk tolerance, and equity. Those things are extremely important to consider before you start trading imho.
Anyways, so here it is.
UNDER THE MICROSCOPE
The first thing you must do is decide what pairs you want to trade. For me, I look at all 28 major FX pairs. Though, I am sure this can work on ANY instrument as this strategy is based mainly around simple supply and demand, volume, and market structure entries.
The second thing to do after deciding what pairs you wish to trade is to go to start with the DAILY TF. You may be able to go as low as the H4 or as high as the Weekly but for my life I like using the Daily TF as I only need to check the charts once per day. So for me, the first thing I do every day is analyze all 28 pairs and see if any of them qualify as possible trade opportunities.
Some things to look out for on your higher TF is VOLUME, or lack there of if looking for reversals. It is a bit hard to explain so I will post some examples of my trades. An easy way to do this is to look at SR zones on the daily chart and identify areas where the market may reverse, or continue a current trend. An easy pattern to remember is when you see one daily bar engulf the previous days high/low especially after a large move, continuation of a move, or at a SR zone.
Here is an example on USD/CHF that I had on my watch list yesterday which I did take.
DAILY CHART USDCHF
As you can see in the photo above the price here is clearly bouncing off of a support level inside of a range. This pair has been trending down for quite sometime and now is ranging on the Daily TF. I look at many things before choosing a pair to trade but the clear things here are:
Bouncing off the support area, bullish engulfing bar indicating VOLUME, and also the interest rate decision by the FED came out as neutral (1.75%) this indicates
to me the reason behind this move is due to the fact that the price does not want to go any lower. I use many confluences to my analysis however you can be just as simple as technical but I do like to incorporate big news events such as interest rates in my decision making for even more confluence when I can.
Now you may be wondering why I call this strategy the microscope, well this is because we start on higher TF and slowly go lower to examine all lower time frames in order to gain even more confluence for our trades. I will not go into too much detail but for this trade the H4 H1 both also looked good for a buy e.g breaking structures to the upside, more engulfing candles etc. Hopefully you get the point.
I then use either the H1 or the 15 minute chart for my entry and my stop. Here is an example for this trade on where I put my stop and entry based on the lowest time frame I look at.
15M CHART USDCHF
Now here you can see the microscope approach in action. Once in the lower TF this is where the fun begins. You can now incorporate whatever entry rules you like. Because I had a bias already to buy from my higher TF analysis. All I had to do now is look for an entry point. I like to enter with the volume, this is a skill that may take some time for some people to develop and maybe you might want to use a different entry style but for me I like entering this way since it usually ends up in my trade going into profit faster. I entered here due to the small uptrend on the 15 minute chart to the upside. Price was slowly creeping higher and I anticipated a break even higher after it broke the daily highs. I placed my stop reasonably below the low for that day at about 30 pips. I don't look for any specific RR but once the trade reaches a 1:1 I start to manage it. If I feel like moving to BE I will, If I feel like taking 50% off the position and letting it run I will. If I want to simply take profits I will. This all depends highly on price action and what the market is telling me, also I may take profits just because I see better opportunities and feel they are a better use for my equity.
The key at the end of the day is to achieve the HIGHEST win rate possible. If you are very careful and use as much confluence as possible and then enter ONLY when you feel it is 100% the best entry possible you should be able to win much more often than not. The key is to try and win every trade. Many people say that its all about your win rate and win % and that's true positive expectancy is important. However, the problem with thinking this way is that some traders may take a trade knowing that it may lose blindly following a strategies rules without forming a good case for trading. Focus on winning EVERY single trade you take and when you lose try and understand WHY you lost the trade. There is always a reason. The market is not random. You may lose a trade because:
1. Your stop is too tight, didn't give enough room for your trade to breathe.
2. Your stop was too big and you didn't take profits early enough.
3. Your analysis was flawed, maybe you got in a trade to early or didn't follow the rules correctly.
Try and identify why you lose and why you win in order to increase your win rate. Pick the best trades. Don't be greedy and take every single set up just because it looks good on the Daily TF. Out of all the potential trades I had on Monday I only took 2. This USDCHF buy and a buy on CHFJPY. Notice how I took those trades specifically also to hedge my risk. They both were great setups and also both included CHF one on the buy side and one on the sell side. I did this purposely. Don't take 5 different EUR sells on different pairs. Be smart, be patient, and choose the best setups each day.