40P Strategy

Sorry if my english is not good.

My strategy is a naked chart trading strategy. 40P means 40 Pip and this is a pullback and trend-following systems.

First of all, the very first of technical analysis you need to learn when you still a "newcomer" in this forex ecosystem is "The Market Structure". Many of you maybe have know this, but still not have an objective rules about market structure so you will be a little bit confused about that when you go to the real chart.

So in this first post, I want you all have rules for your market structure. Me, myself, like to trade at 15M TF at XAUUSD. For me, in XAUUSD 40Pips is a "safe" range to price to make a rejection and to take a trade. That's why I pick 40 Pips for my rules.

My rules for market structure is:
1. If price have move 40 pips from its highest or lowest point at the time, it a confirmed pullback. If not, it means it could be make a new highest point so wait for it to happen.
2. If after 40 Pips or more pullback, the price close above the highest point I mark and never close below the low of the previous BoS, it was a BoS (Break of Structure). The lowest point of that pullback into BoS is my new low. (And reverse for Downtrend market)
3. If price closed below my low of previous BoS. It was a ChoCh (Change of Character) and the trend is changing from bullish side to bearish side.

With this 3 rules of market structure, you can be profitable (really).
I will explain how to get the profit with this 3 rules in the next post.

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Will post another trade ideas on August later.
Btw, my WR is only about 30% but with this RR we still can get profit.

This strategy itself will get 20+% at May, around 7% at June, -10% at July, 20+% at August.
This was not a holy grail strategy. But with this objective perspective about the price, we "maybe" can get a little bit of edge.

Nice strategy, I've notice price tends to pull back around 40 pips on most pairs, which is why i always have a 40 pip take profit. They way you take your entries is interesting. i will look into this as well. thanks for posting.

Second trade in August.
It's just a pure luck that we get 2 win in a row, still it's a book trade.

I think with these two trade, you can get what I mean that even only looking to the Market Structure, you will get a little bit of profit. Next, we will talk about how to maximize this strategy with something like Support Resistance and Liquidity grab.

Okay, so let's now try about this "Market Structure" at real-time chart.
Here is my trade idea. Placing a limit buy order 20 pips from the last BoS Low.
If you willing to take this trade with another approach like take it with 1:3 RR or using fib for entry, its still understable. Atleast, you have know where is the point you must take the entry for you to get a little "edge".

Of course it will became invalid if price close above the highest point.

Hello Eskurrr.
Once the highest point is broken, you wait again for a retracement of 40 pips to start the cycle, is that correct?

A clarification, in its last capture in real time, If the price enters the delimited zone of 40 pips (20 above and 20 below the last Bos), it is very likely that it will close a candle below the minimum of the Bos, so you would be buying after a ChoCh (according to the first publication), so you would be on the wrong side, thus viewing the structure and the TP should never reach the highest point.

Yes, price now have closed above the range so we wait for another retracement to know where is our new high of the range. Btw, for my rules it need to be closed above to clarify it as as a new BoS.

And I will not wait for ChoCh. I will enter the trade when the price go 20 PIP above the low of the range with expectation it will make a rejection there.
Yes, it maybe very likely to close as a ChoCh. That is why, we need a bigger RR to make this strategy profitable. I have tell that my WR is only 30%, because it's very likely to go downside. But, we still have and edge because of the Risk and Reward and we still have 30% chance it will reject there.

And another of my rules is, "set and forget". If I take a trade yesterday and there is ChoCh confirmation, but it not hit my SL, I will not manage it and let it hit SL anyway. From my backtesting and my experience, set and forget is more "good" for me.

Okay, before covering the next method to maximize our strategy using this view of "Market Structure" with Support and Resistance, maybe I will explain my view about Multiple TimeFrame analysis first.

*Will be edit it tomorrow in this post*

Okay I understand
The capture would be correct according to the graph so far?.
I like it because it enters liquidity zones in favor of the trend that the structure is setting.

"Lucky" win. Or Mechanical Win?
Trust your own rules, get 2.3% for me.

Not put pending order for sell because I want to skip it because there is FOMC later and I still have trades open. Good for me though.

Get another Win tonight. Get 6% for me.

Can you post the trades please?

Another beauty setup guys.

Overall P/L:
+8.9% (with 2% risk)

How to determine the time horizon and timeframe for applying this strategy?

I choose 15M TF for my rules just because 40 pips movement in gold is somehow more visible for me than if I use 1HR Timeframe. But I have try to apply this strategy in other pair like GU, and it's not give me a good result. For me, this rules it's only work on gold.

I have 2 years data backtesting using for GU pair using this market structure, and the best result I get is using the fib retracement on 1 HR Timeframe, entry on around 70% retracement with 3:7 RR ratio, which is 62% in 2 years. So, I think how to determine the timeframe for other pair is just do backtesting and you will see the best option for your strategy.

Btw, yesterday we get a little bit profit if you can catch it around Asian Session. We will get 36 pips, which is 1.6% profit.
Overall P/L: +10.5% (2% risk per trade)

Yoohooo... Pocket another profit. Will update this post tomorrow.

Thanks!