I have decided to write my trading journal here for all to see and share my trading strategy. I will post all my trades live as they happen.
The Strategy:
Money Management:
1. Max risk per trade is 2-3% of equity.
2. Only 5 open trades at any one time (excluding final 1/3)
3. Initial capital is 3000aud
4. I will be using multiple lots on a micro account
Trade strategy: I will be using the 4hr chart for trade entry & main analysis, the daily & weekly for background.
The basic plan is, I will be looking for false breakouts on the 4hr chart, with particular attention to significant background support/resistance & trend. I will post some examples soon. I am looking for areas of consolidation after a trending period.
Trade selection rules:
1. Consolidation range to be at least 150 pips
2. False break to be at least 10pips (some discretion to be used at significant levels)
3. Entry to stop must be less than entry to first profit point.
4. Judgement to be used on which side of range to take a trade.
Things to consider
1. What is the previous trend, 4hr, daily weekly. If for example there is a strong uptrend, then ideally you want to get into the false break at the bottom of the consolidation range. This will put you back in the direction of the trend.
2. Is it over bought/sold.
3. I use the 10, 35 & 200ema for trend indication; only go against these if you are at significant support/resistance.
4. False breaks at old tops or bottoms or major trend lines or 200ema are strong.
5. Be careful if testing the same area of range for 3rd or 4th time
6. Reversal candle/bar patterns can add to trade confirmation.
Trade management:
1. Stop to be placed 10 pips away from low of reversal bar
2. Take 1/3 profit at 50% of range
3. Take 1/3 at 100% of range
4. Final 1/3 to be given plenty of room to move. If we get to this stage hopefully price has broken out of range, use trailing stop until stopped out.
I will post some back test charts soon.
The Strategy:
Money Management:
1. Max risk per trade is 2-3% of equity.
2. Only 5 open trades at any one time (excluding final 1/3)
3. Initial capital is 3000aud
4. I will be using multiple lots on a micro account
Trade strategy: I will be using the 4hr chart for trade entry & main analysis, the daily & weekly for background.
The basic plan is, I will be looking for false breakouts on the 4hr chart, with particular attention to significant background support/resistance & trend. I will post some examples soon. I am looking for areas of consolidation after a trending period.
Trade selection rules:
1. Consolidation range to be at least 150 pips
2. False break to be at least 10pips (some discretion to be used at significant levels)
3. Entry to stop must be less than entry to first profit point.
4. Judgement to be used on which side of range to take a trade.
Things to consider
1. What is the previous trend, 4hr, daily weekly. If for example there is a strong uptrend, then ideally you want to get into the false break at the bottom of the consolidation range. This will put you back in the direction of the trend.
2. Is it over bought/sold.
3. I use the 10, 35 & 200ema for trend indication; only go against these if you are at significant support/resistance.
4. False breaks at old tops or bottoms or major trend lines or 200ema are strong.
5. Be careful if testing the same area of range for 3rd or 4th time
6. Reversal candle/bar patterns can add to trade confirmation.
Trade management:
1. Stop to be placed 10 pips away from low of reversal bar
2. Take 1/3 profit at 50% of range
3. Take 1/3 at 100% of range
4. Final 1/3 to be given plenty of room to move. If we get to this stage hopefully price has broken out of range, use trailing stop until stopped out.
I will post some back test charts soon.
