Old Fashioned Trading - Aimed at First - Two Year Traders

Gartley Example (post #76)

Breaker Block Example (post #29)

I haven't mentioned time frames much because the most common mistakes in the beginning are risk management mistakes and being in too low a time frame for your experience. You believe that with the smaller time frame you will have more time to react, but it is easier to read and more reliable at higher time frames. 1-hour is best for XAUUSD intraday, 30-minute is a good compromise. I trade 15-minute, with 1-hour as structure, and occasional 5-minute when it's being temperamental.

When it starts to range, and I'm struggling to get a trade, I look for trades on 5-minute. You can get this trade from 15-minute too, but when it's noisy, it's often better to view on a lower time frame alongside the 15-minute. Several time frames on several monitors is best, but if you don't have multi monitor setup then arrange in windows; You can make a mistake if you stay too long on 5-mintute without the overall picture from 15-minute / 1-hour.

1. Break with open gap.
2. Round number.
3. Wait for a imbalance FVG and break, wait for pullback to an order block, breaker block or FVG. Be patient, they are obvious when it happens, if it's not obvious wait.
4. Entry doji.
5. Take Profit 1.25% fib - it makes it to 200% stop level above the zone: (Fib set from points A)

Round number is Confluence here (2), mark up with breaker block.

I don't track volume on 5 minute, or volume profile. I have the 15-minute on another monitor for that.

Entry is the doji (4), doji touched the FVG (3). Always look for dojis on these types trades. This was 4:1 80 stop, 360 take profit

Coin toss in profit - No further reports until end of month

I was running in another account, but it's difficult to manage, switching between the two resets everything I have setup. Demo I'm running the high score game, and it gets a bit confusing, with two accounts open. My age I will open the wrong order in the wrong account eventually. So, tracking like this

Times for rest of month are 23:00 US EST, 05:00 EST, 10:30 EST

Edit: Todays coins 05/11/25 US dates (11/05/25)

Expanding on Fear - ego (post #62)


Our thought process with losing, and is it ok to be wrong?


There is another topic that is linked to fear, or separate from hesitancy that leads down this path to hesitating, before ultimately ending at a fear dead end, and needing a U-turn or heavy tow-truck...

Personally, after I was truly honest with myself, the absolute root cause. Why was I hesitating by closing trades early, and avoiding the anxious feeling from fear? I have no attachment to money; I have always had bad habits towards it. I was not a saver; I would derogatorily call it hoarding. I am not competitive, I have no ‘ego’, or I would say I haven't. But in my past, I have had flashy cars. Arrogance is an outward show of ‘ego’. I know from interactions in a work environment; I can be arrogant. Everyone knows what their bad points are, but we try, ever so hard, to hide them, even from ourselves. To do this process properly, we have to be completely honest with ourselves. Until we are, we will continue having problems, waiting for the tow-truck.

I had a problem with losing and being wrong. I initially would explain it to myself, from my background in science and engineering. We deal in absolute outcomes. I can chart the flow rate to an engine, mark the point where the engine stalls, and if repeated, the flow of fuel where the engine stalls will be near enough the same value every time.

But is that the root cause? No, it’s my arrogance, even that statement itself is arrogant, cut the bullshit and ask yourself truly why?

Trading isn’t like this; it's a chaotic system (chaos theory). It’s a visible chart of human psychology and how we behave towards stressful events. There are no absolutes, but if I break that down further to a personal level, it's arrogance. You expect to be right, and don’t like or can’t deal with the feeling when you are not right.

With trading being a chaos system, trading is like predicting the weather. If you wake up sunny, it's June, and it's been sunny all week. If you wear shorts and go out for the day, and later it rains, are you wrong? This is a statistical game of probabilities; at some stage, a prediction is going to be wrong.

As professional gamblers, we need a statistically tested edge with money management and nothing more to be profitable, and then we roll the dice and keep swinging. This concept, after truly being honest with myself…That I am the problem, not the indicator, consequently spending time in a simulator and resolving and fixing fear from turning down that wrong road is why I didn’t need a tow-truck.

Daniel-san, put it together, sand the floor, wax on, wax off, paint the fence...

Another Breaker block example

This example, I'm skipping and not trading. I'm not confident in the outcome: It's not a Wyckoff (liquidity) spring at the bottom, but maybe at the top with the break at the top. Looking like an uptrend, but could be a continuing downtred, still not sure.

So, I'm waiting for another opportunity. Seeing as I had drawn on it with crayons, it might be of use to someone and show it here before deleting.

Image: 5-minute XAUUSD

Anchored VWAP

Before the market opens, quickly show how I use anchored vwap, I do have ema's on my chart but I don't display due to clutter.

I display 50 ema over 200 ema and its outcome as 'Bullish or 'Bearish' I use 200 ema because it is also the 1-hour 50 ema. Anchored VWAP is my overall bias, but I still trade either way from break lines. It's the 1-hour market structure that decides if I go full risk trade or not (post #60).

The anchored VWAP is anchored to the start of the bearish move down volume (first image) 17/10/25 or US dates (10/17/25), where the anchored VWAP is in relation to today. (second image)

How I display EMA bias, I look at this to make sure I don't have an internal bias. (last image)

Predicting

I generally avoid predicting what I think the market will do, but I do use the daily as longterm overview. I try and resist predicting, because of internal bias and sitting waiting to trade what you've predicted, wanting to be right (post #84)

From the image below, Daily XAUUSD, you can see how fractal the market timeframes are. We are over the 'POC', but not moving away from it with an imbalance. The anchored VWAP is at around the 3720.00 ish area, which is 50 - 61.8% fib area. We have also touched the 'Value Area' of the volume profile at 38% area (Orange dotted line).

If we get a daily imbalance (FVG), "Looks like meat's back on the menu, boys!"...

Can you spot the Gartley?

(image) 5-minute XAUUSD

Return to NY Midnight (post #33)

Why I wait for a break, I don't short until a break

If you shorted before the break; Mr. Miyagi - root cause, is greed. You see an opportunity to make more money than if you waited for a break- Impatience & greed

Another possible Wyckoff spring (liquidity). No volume with the move down on the 15-minute, but went under the 8-hour 'POC'

The two marked candles are belt hold lines. They are similar to kickers, and I would classify them as institutional 'tent pegs' to be used with their mallets. At the moment, so far today, I've got one small ADR partial trade and stop loss now locked in at breakeven after a touch and moving away.

Edit: Closed early I don't want to hold overnight 200pip, 50pip from target

image: 5-mintue XAUUSD

Quicky post; how I change my setup, when I believe it's getting tricky to trade with pullback. I add vertical lines, set to follow the US EST 23:00, 03:00, 07:00, 11:00, 15:00, 19:00 open 4hr times, that match Comex (futures)

Divide the day into half from 12-hour candle, and move the lines to project across, showing the previous 12-hour high and low, and fill the area with light opacity. I look to trade off the top or the bottom. It's good for showing Wyckoff spring (liquidity), if it breaks, the area it is divided into quarters, and I use it like a fib. There is a fib 61.8% extension marked (red dotted). I look for candle shape and volume confirmation. Volume becomes more important, and I move the readout to the middle right of the screen.

Volume profile goes to delta mode and 12-hour candle. I've marked areas with a red ellipse that I would trade.

Although with price over the magenta anchored VWAP, which is from the move down and the all time high - I might be reverting to normal 8-hour mode.

The post I made concerning 4-hr candle times(post #32). I made an error with my timezone conversion and UTC and UTC+1; daylight savings time.

Investing candle times are US EST:

23:00, 03:00, 07:00, 11:00, 15:00, 19:00


The futures gap needs further clarification: (post #27)

The spot direction is in the direction of the futures gap, which must include the wick. If inside a wick, the result is not always in the direction of the gap:

E.g. one day in here, spot finished bearish & gap direction was bullish but inside the wick

Short version I'm referring to full gaps, not partial gaps (body gap)

Example to highlight the 4-hour candle times from Comex

23:00, 03:00, 07:00, 11:00, 15:00, 19:00

You can see there is usually a movement of momentum or a reversal at these times or just after

Why the coin toss works (post #63) is because of these times. 3 outcomes per day, win rate 50% and I'm running at 3:1.

Images, the last two weeks, as an example

Simple 1-hour Strategy

I used to trade this strategy when I was working, and I used the alerts from TradingView. It takes minimal chart time and works best with a trending instrument. Gold it would have been exceptional this year, but because I'm often already in a trade I don't enter.

You can use any momentum indicators; I have used stochastic, RSI, CCI.

Bollinger Band B, I prefer it because of the standard deviation (2.0), and it is a volatility indicator. I find it exceptional for divergence. If you haven't heard of the Bollinger band B before, it is the typical Bollinger band indicator converted to an indicator displaying overbought/oversold areas. It shows where the current price is relative to the upper and lower bands. You can use standard bands, but I hate the clutter and mess, and no way to determine divergence.

The rules: there is no bias filter, but there is a filter with the candle shape; it has to be 'Engulfing', 'Piercing Line', or a 'Dark Cloud'. This candle has to appear in no more than 5 candles since leaving the overbought/oversold area. The middle line, which is the standard Bollinger 20-sma, is allowed, but it has to go over/under and then retouch the middle and create a small step (see image examples), again with a candle shape, but it has to be that candle, and not a piercing line.

'Piercing Line' is the exception, 'Dark Cloud' is a good bearish signal, but the bullish alternative 'Piercing Line' is unreliable; trade this as a buy only with a divergence.

If you are unfamiliar with divergence, it's best to Google and look at the images. The highs or lows on the chart, you can draw a trendline linking them; on the indicator, you can draw a line from the same high or lows, and the trendline on the indicator will be a slope in the opposite direction (see images). I have plans on the front page (introduction) to cover divergences.

Short Summary of Rules:

Buy (2 options)

1. Price in oversold territory.
2. Price leaves oversold (alert).
3. Within a maximum of 5 candles, a 'Bullish Engulfing' candle forms.

Or

1. Price in oversold territory.
2. Prices leave oversold (alert).
3. Within a maximum of 5 candles, a 'Piercing Line' candle forms, with a divergence.

Buy Middle Band (2 options)

1. Price is under the middle band.
2. Price is now over the middle band.
3. Price retests the middle.
4. Price leaves the middle with an 'Engulfing' Candle.

Or

1. Price is over the middle band
2. Price retests the middle band
3. Price leaves the middle band with an 'Engulfing' Candle


Sell

1. Price is in overbought territory.
2. Price leaves overbought (alert).
3. Within a maximum of 5 candles, a 'Bearish Engulfing' or a 'Dark Cloud' candle forms.

Sell Middle Band (2 options)

1. Price is over the middle band.
2. Price is now under the middle band.
3. Price retests the middle.
4. Price leaves the middle with an 'Engulfing' Candle.

Or

1. Price is under the middle band
2. Price retests the middle band
3. Price leaves the middle band with an 'Engulfing' Candle

You can bring volume as a confluence, but in the 1-hour timeframe, the high volume is often the candle before.

Stop above a low or high, R:R at least 3:1, sometimes 4:1, recommended going partial at 3:1, stop to breakeven, and leave a runner for 4:1.

You have to be sure these are engulfing, zoom in to make sure the open engulfs the previous close.

Image examples: The first Buy is divergence and the piercing lines. Second Sell, it is the fourth candle that is a bearish engulfing.

Attached Image (click to enlarge)

Third Sell retest the middle band and engulfing. Fourth sell under, restest, engulfing, and the step pattern. (this is a kicker not an engulfing - difficult to find a sell example, it is the step pattern that is important to show) Fifth Buy, engulfing is the fifth candle.

Attached Image (click to enlarge)

Sixth Buy middle over, retest engulfing, and the step pattern. Seventh Buy retest the middle band and engulfing.

This is a good pattern to look for with 'POC' and volume profile; it's more noticeable when 'POC' is from delta. Price sits on top, and either the candle wick before or the current candle wick touch or pass through the 'POC'. The close/open price sits on the line and doesn't pass under.. You see the same with sells (second image).

How to build a Starter Strategy

If you are under 6 months of experience and you are not sure how to put together a strategy, then hopefully this will help. You do, of course, need to have a bit of spare time to do this, and enjoy looking for ways to solve problems, spend time testing, be prepared to discard a whole day's worth of testing with no outcome, and use a calculator.

If you don’t like the sound of all that, the one I suggest at the bottom of all this, or trading systems, rather than YouTube, is probably a good start.


Common mistakes are too many indicators, trying to trade naked, and too low a timeframe for your experience.

Fix

1. A maximum of two indicators
2. Don’t trade lower than 1-hour
3. Wear clothes

Trying to think of an example that doesn’t make it patronising. Think of learning to trade as similar to learning to drive. You don’t start to learn in a fast car, trading on the 5-minute with a naked chart, is a fast, twitchy, tail-happy car. Trading the 1-hour, with two indicators, is a L plate learner setup. If you have full-time employment, it is generally the best fit for your lifestyle and is often all that is required.

The other mistake often made, or forgotten, is that the chart is a visual representation of mass human psychology. An indicator is a mathematical formula that will hopefully signal patterns, from either passing a boundary or crossing a moving average. Due to this reason, it will never be more than 55% accurate, most of the time, 40-45% accurate. If you have a problem accepting this, the coin toss training exercise will be worthwhile (post #63).

In summary, from using historical data, we are looking to build a system that will highlight an area of interest. We don’t want this system to be too dialed in; we want it to be flexible with market conditions throughout the year, and we have to accept that at times it will be wrong. However, with money management and discipline, it will be profitable.


Start with a blank 1-hour Chart

Attached Image (click to enlarge)

The basis for any system is a moving average or, supertrend.

Start with adding a simple moving average and 50-period. 50 is a good start due to the common four times higher timeframe. The 4-hour 50 sma is also the 200 sma on the 1-hour (4 times as many candles on the 1-hour in the same 4-hour period).

From this moving average, you can start to see trades already. The problem moving averages have is with periods of ranging conditions, and signals will whipsaw from being over then under the line repeatedly. The long-term win rate of a single moving average is ~30-40%

To do this properly, you have to go through and count the number of trades, then with you're targeted R:R, count how many trades are winners. Divide winners by total trades x 100 = Win Rate %. You need a higher n number for this to be accurate, and is time-consuming.

To increase this number and reduce the whipsaw, you can bring in a second moving average, the 200 SMA

Then you have to repeat all the data with the new rules. As I have highlighted, this has to be clearly defined and not subjective. From the work I have done in the past, depending on R:R, this will improve win rate slightly, but drastically reduce the number of trades.

The number of trades is a constant relationship with win rate and R:R, with the target being to optimise and maximise account balance, with draw down minimised. If you are not careful, you will spend too much time obsessing over the optimum.

Profit factor is a useful way to determine if you are too dialed in to the optimum and you are consequently no longer flexible to market conditions. Imagine you have perfected a profit factor of over 4, this is usually an indication that you have settings of 2.34563, with a period of 141. It is too specific for this period of historical data, as soon as market circumstances change, it will start to lose money.

Profit factor

 

1. Calculate total gross profit: Sum the profits from all of your winning trades.
2. Calculate total gross loss: Sum the losses from all of your losing trades.
3. Divide: Divide the total gross profit by the total gross loss

e.g. Started with $1000, after 100 trades, $244 profit, with $63 losses

Profit factor = 244/63
= 3.88

A mechanical style system with a profit factor over 4, I would be concerned that it is too specific to the historical data at that time. Over 5, is over-optimised. 1.5-2.0 is a good starter system, 2.0-3.0 is good.


A momentum or Strength Filter

There are hundreds of indicators out there, you will seldom finding anything new or different that has existed before. The common ones often are the best because, the more people that use, the more likely the outcome is to be, from a 'Self-prophesying' effect.

RSI (Relative Strength Index) - Momentum
Stochastic Oscillator - Momentum
MACD - Momentum
CCI (Commodity Channel Index) - Momentum
MFI (Money Flow Index) - Momentum with a volume weighting
ADX (Average Directional Index) - Strength
Aroon - Strength
Williams &R - Momentum
ATR (Average True Range) - Volatility
Bollinger Bands - Volatility
Keltner Channels - Volatility

In my opinion, this is all you need. All the other indicators that are available will be slight variations of the themes above. They may indicate another entry that your original indicator does not, but in replacing it with the new indicator, it will miss an entry that your existing indicator highlights. You are often dealing with fractions of a percent, and from the risk management exercise, you will see that R:R is the real winner, not the win rate from a signal (post #60).



Next Stage

From here, you have a couple of options. Picking RSI as an example, you can use RSI as an entry when overbought/oversold and then leaves the area. This won't match up well with a moving average, because for that to occur, it will be above or below a 50-period SMA

All the examples in the image above, in combination with a moving average, you can not trade. You're only option is to make the moving average period smaller, or you can drop the moving average altogether, and then trade. From my experience, RSI is not much better than a coin toss, so not much benefit in running with RSI on its own. Another option is to use the middle line of the RSI.
This is very similar to running with a 34-ema, so it is essentially using 2 moving averages. However, this is usually an effective use of RSI, with a moving average as a direction bias filter. Stats from this over the year with gold, typically 45-50, occasionally 55-60%.


The last option (image above) is to use RSI as a momentum indicator, buying when overbought, and selling when oversold. This generally works well, with slightly worse stats than the middle line, due to it occasionally putting your entry high or low, and your stop is about to be taken from an impending pullback. In a strong trending instrument, with high R:R, regarding maximising account balance, this will deliver the best stats. A strong trend is usually a short-term prospect and will not last longer than a couple of months.


Abandon Everything

It's usually at this stage that a rethink is needed. ADX can be used as a trend strength; only trade when ADX is over 25-35. ADX is a very effective trend strength filter, and then win rate will increase drastically. Unfortunately, drastically reducing the number of trades, and sometimes as low as one trade per week. Aroon will accomplish similar results and will also function as a trend direction check. Removing the moving average and replacing with supertrend, will function like a market structure and break indicator. Supertrend, French trader and author Olivier Seban, around 2009, described its use in his book “Everyone Deserves to Be Rich” (French: Tout le monde mérite d’être riche). The SuperTrend indicator is a trend-following overlay that runs directly on a price chart. It uses volatility (via the Average True Range or ATR) and a multiplier to plot a line either below the price (indicating an up-trend) or above the price (indicating a down-trend).

In short: SuperTrend = ATR × multiplier → a band/line that flips above/below price to tell you direction + possible stop/trail point.



Trading in direction, whenever the supertrend line flips from top to bottom.

From trialing a few settings, you can find a setting that fits nicely with current market conditions

Supertrend, from the pullback movement of markets, will highlight areas. After breaking the supertrend line, price will pullback and sit on the line (see image above). Now all that is required is to find a way to target this area and determine when the pullback has ended. From a trading position point of view, the stop will be well positioned, R:R should be high. If price doesn't pullback then we are probably in a correction wave and we can sit the trade out, rather than being trapped.

Continuing Build a Strategy from above

From here, we can add a low-period moving average, a low-period RSI, stochastic, or MACD
5-sma works well in this case, but even on this small chart period of a month, you can see a couple of issues.
The second option is RSI with a low period of 2-6, waiting for price to pullback in vicinity of the supertrend line. Trading in the direction of the supertrend line, and using overbought/oversold from RSI as a pullback area, once the price leaves overbought/oversold area open a trade. I know from previous work that this is ~60% win rate for most trending instruments, averaging throughout a typical year, delivers 2.5:1 - 3.5:1 trades, with a good profit factor, decent amount of trades, maximising account balance and with minimal drawdown.



A Few More Things

Average True Range

TR=max(High−Low ∣ High−PreviousClose ∣ Low−PreviousClose)

| = Or

And then is smoothed with Wilder's method, usually 14 periods




Average true range (ATR) can be used with a 50-period simple moving average of its value. If the ATR is over the average value, a trade is allowed. It is similar to ADX filter but more responsive. Bollinger band can be used inside a Keltner channel, which is based on ATR, and with similar settings can be used to identify areas of consolidation. This is another with a good profit factor of 2.0, and a decent number of trades.
It is quite cluttered on the display, but the rules are simple: the green Bollinger bands must be inside the red Keltner channel, and price must be inside the green Bollinger bands. When price breaks outside the top or bottom green Bollinger band, open a trade in that direction, top band - buy, bottom band - sell.


I was reliant on this method for quite some time, and I still display on my chart from a piece of code into a display with text. I can't remember the last time I traded from it, and I should probably remove it, but nostalgia and history prevent me from deleting it. However, it is a good, reliable, profitable method to target consolidation and breakouts. The method is good with lower timeframes too.

For ranging markets, you have stochastic and matching with equal highs and lows.

RSI can be substituted with stochastic, CCI or MFI.



MACD in any professional picture of a trading desk, it will have ema's, sma or MACD and volume, once I have seen a stochastic. I used to use MACD for divergence, but I use Bollinger Band B for that now. Aroon, I have used it once or twice. ADX is always included with the ATR readout on the same display text. Again, for nostalgia reasons, as it is not included in my rules, but I look at the display to make sure I have not formed an internal bias, and the market is so dead that maybe I should stop trading. Image , Bollinger/Keltner its called squeeze.

Divergence

Will cover in more detail later, but seeing as 1-hour has just provided an example, I will show it. In this case, it's Bollinger Band B, applied to close price levels. From drawing a line from the first low area. The line starts on the close value, not the wick, and joins the next low area close. The angle is a negative 7. Do the same on the indicator, which is applied to the close values, and the angle is positive 5.


The explanation of this, Standard deviation, is the deviation from the mean, and the further you deviate from the mean, the more statistically unusual an event it is. At 2.0 deviation, it is 95.45% likely to be on the other side, 2.28% for data to fall outside on each tail (band). For 2.5 standard deviation, it is 98.76% and 0.62% of an occurrence outside the bands.

The price close level is slightly lower than before, but the deviation from the mean has interest at a smaller standard deviation than before. Or, traders have shown interest at an earlier standard deviation than previously, the statistical unusual event is now less a statistically rare occurrence, and higher up the histogram bell curve.

In simple terms, traders are getting greedy and displaying FOMO, rather than waiting for a deeper correction, this will do me...

I am almost new to trading. Some points i understand, some didn't i.e. i don't understand point number 3 at all. Please also guide me regarding ADR and volumn related things, these features freely available on tradingview? You mentioned 9 conditions here for a setup, are all these parameters freely available on tradingview?