I'm not changing so much anymore, only tuning. Feels good. This time I've added psychological rules and an alternative exit method.
Blue text is new text.
Current pair and timeframe: EURUSD, daily.
The Strategy Rev. 5
Trading rules
Blue text is new text.
Current pair and timeframe: EURUSD, daily.
The Strategy Rev. 5
Trading rules
- With the trend on the chart I'm trading, but also stay tuned on larger time frames.
- No indicators.
- No day trading. Aim towards "investing" rather than "trading".
- Look for higher highs/lows and lower highs/lows for an indication of trend changes.
- Enter according to trend/price action. See "The Tactics".
- Majors (forex, commodities, ...). EURUSD as a starter, though, until I reach the promised land.
- Always use Stop Loss orders.
- After a losing trade, figure out what went wrong before jumping in again.
- Maximum risk of 5% in any one trade.
Psychological rules
- Don't watch the market more times than what is absolutely necessary.
- Don't ever check account status when in a trade.
- Let the trade play themselves out.
The Method Rev. 3
These guidelines are written for a north-going market. The reverse applies to a trend heading down. Candle stick bars are assumed.
Remember that this is still a discrete process and not an automatic system that can be implemented in an MT4 EA or something.
- Enter after a visible (clear and significant) retracement: at the close price of a green bar (A+ setup) with a high above the high of the previous bar (A++ setup).
- Stop loss a few pips below the low of the green bar mentioned above. 10-20 pips on a daily chart, for example.
- Lock in profit by gradually move the SL order.
- Exit at the close price of a red bar (A+ exit) with a low below the low of the previous bar (A++ exit). An alternative is to use a manual trailing stop loss to lock in profit and let the trade run longer.