Alifari's Trading Journal

USDCAD M30 supply zone - entry based on M5 & M1 to get precise entry level.

Detailed analysis will be posted once trade is executed.

Reference to above charts, trade triggered and closed for +1.50R

Trade Analysis

1) Identified supply zone on M30 time frame
2) Checked M15, M5 & M1 for precise decision point within supply zone
3) M5 & M1 clearly show where decision was made by sellers to move price down.
4) Sell Entry couple of pips below decision point
5) Profit target 1.50R

If you observe price action in a relaxed way, you would see that there is nothing new in the market, similar patterns are repeated day in day out on various time frames.

The job of a trader is to identify these patterns and keep adding it to your play book and constantly analyze it, once a week, so that when the pattern is forming you are ready for it. That is your edge.

These pattern may not by 100% exact in size, but the direction would be similar.

Not every high and low is significant. Why ?

Posting chart, if anyone is interested in posting their analysis. Otherwise, will revert back in few days with my analysis.

the magnitude of the move created from those highs/lows?......

1) Yes, that is first requirement "A significant move from a level" which in general indicate that there is heavy interest (buy or sell) from one side and that opposing side is weak.

2) The second requirement is "Did this significant move broke an important SR or SD level" and created a new lower low or higher high.

3) The third requirement is how price is reacting, once that important SR or SD level is broken. Was there impulsive reaction below that broken level or price moving slowly towards our significant level, where initial move was started.

If price is moving in waves towards our significant level, that is ideal, because it indicates that both buyers are sellers are active in that zone and when the significant level is reached there would be increased activity and with probabilities in our favor, there is higher chance price will move in our desired direction.

However, if there is impulsive price movement from or below that broken level and price is hitting our significant level in one wave then be cautious, it indicates that opposing side is very much active. In that case wait for our level to hit and see the price action before executing trade. We may get second chance on retest of our level.

To give you an idea of above explanation, see attached chart Level 5. The point is we are not looking for home run and expecting price to go in our desired direction for few hundred pips, but rather a reaction from our level of interest and price moving at least 1.5R to 2R which is all we need to make money.

AUDUSD M15 SR Level - Sell trade

The purpose of this trade is not to show off Winning trade, instead it is about how to actively manage a trade, if you are around your PC.

Here is complete thought process from start to end

1) Identified SR Level on M15
2) Drop down to M5 & M1 to check precise supply level.
3) Sell Limit entry order placed with 14 Pips Stop Loss and 21 Pips Take Profit (1.50 R)
4) Once trade triggered, actively watched charts on M5 and M1 to observe price action.
5) Initial draw down on this trade was around 9 Pips.
6) However, once price started moving in my desired direction close to 1R then moved Stop loss from 14 to 10 Pips. Thus lowering my Risk to 0.70. Usually my stop loss goes couple of pips above last high or low.
7) Also moved Take profit from 21 Pips to 28 Pips, was aiming for 2.0R. As there was plenty of downside room till next SR level.
8) Price missed my take profit by 1.50 pips and move higher again, so decided to cut off trade with 1.60R Profit.

Trading is not all about finding levels to execute trade, but you have to constantly think how I could decrease my risk and increase my take profit, once price goes in your desired direction. Always look for FLR / FLS (First line of Resistance or Support), where you expect price to reverse and adjust your stop loss and take profit accordingly. The move towards this level will give you clues, if you have reasonable understanding of how price moves.

* Missed the first lower low, as was not around my PC, but even if I saw that, may not have taken it, due to the way price approached that level. You would notice the difference, as to how price approached both levels.

If you want to succeed in forex trading, always keep an eye on higher time frames and take maximum trades in direction of higher time frames. Do this for few weeks and you will notice vast improvement in your win rate as well as your R/R.

For instance:

1) If you are trading 5 Minutes time frame, keep an eye on 1 Hour, 4 Hour, Daily.

2) If you are trading 15 Minutes or 1 Hour time frame, keep an eye on 4 Hour, Daily & Weekly time frames

3) If you are trading 4 Hour time frame, keep an eye on Daily, Weekly & Monthly time frames.

Here is a simple Trade management Excel Template, I use to see probabilities of my trades with different Exit scenarios.