This thread is here to discuss a trading system using a simple buy sell line.
It is based on strategies used by Steve Primo, it is not my creation.
The concept is to use TREND>PRICE ACTION>MOMENTUM to get your trading consistent.
We identify a trend, we wait for a retrace, then a signal the retrace has ended and finally momentum back in the direction of the trend.
RULE 1 TREND
IF PRICE IS ABOVE THE 50SMA WE WILL ONLY LONG.
IF PRICE IS BELOW THE 50 SMA WE WILL ONLY SHORT
IF THE 50SMA IS FLAT OR PRICE IS CHOPPING ABOVE AND BELOW THEN THE TRADE IS HIGH RISK AND YOUR WIN RATE WILL BE AFFECTED.
ideally we are looking for a nice slope on the 50sma showing a sustained trend in one direction...
RULE 2 PRICE ACTION
BULLISH ENGULFING FOR LONG, BEARISH ENGULFING FOR SHORT. WE CALL THIS A SIGNAL CANDLE.
OPEN AND CLOSE OF THE CURRENT BAR MUST ENGULF THE OPEN AND CLOSE OF THE PREVIOUS BAR.
IF PRICE ENGULFS MORE THAN 1 PREVIOUS BAR IT IS A STRONGER SET UP.
IF PRICE BARELY ENGULFS THE PREVIOUS BAR IT IS A WEAKER SET UP.
AVOID H1 ENGULFS BETWEEN NY CLOSE AND ASIA OPEN.
RULE 3 ENTRY
PRICE MUST TRADE 1 PIP LOWER THAN THE LOW OF THE SIGNAL CANDLE FOR SHORTS
AND 1 PIP HIGHER THAN THE HIGH OF THE SIGNAL CANDLE FOR LONGS.
(dont wait for this candle to close, once you exceed the high or low enter the trade)
IF YOU ARE USING PENDINGS ALLOW FOR SPREAD.
ENTRY MUST BE TRIGGERED ON THE VERY NEXT CANDLE
WE ARE LOOKING FOR MOMENTUM BACK IN THE DIRECTION OF THE TREND.
RULE 4 STOP LOSS
STOPS ARE PLACED 1 PIP ABOVE THE HIGH OF THE SIGNAL CANDLE FOR SHORTS.
1PIP BELOW THE LOW OF THE SIGNAL CANDLE FOR LONGS.
RULE 5 POSITION SIZING
ALL TRADES SHOULD HAVE A RISK OF 2%, REGARDLESS OF PIP SIZE YOU MUST ADJUST YOUR LOT SIZE SO YOUR RISK IS EQUAL ON EVERY TRADE..... VERY IMPORTANT !!!!!!!!
RULE 6 TRADE MANAGEMENT
YOUR TARGET SHOULD BE 1/1
AT 1/1 R/R MOVE YOUR STOPS TO BREAK EVEN
if your risk is 50 pips you would move your stops at +50 pips.
AT 2/1 R/R TAKE SOME PROFITS OFF THE TABLE. THE AMOUNT IS ENTIRELY DOWN TO YOUR RISK TOLERANCE, I WILL USUALLY CLOSE 1/2 OR ALL OF MY POSITION.
ALTERNATE SIGNAL CANDLE
THE ENGULFING SET UP WILL NOT CATCH ALL MOVES BACK INTO A TREND SO WE HAVE AN ALTERNATE SIGNAL CANDLE THAT IS JUST AS SUCCESSFUL.
THIS IS JUST AN ALTERNATIVE TO THE ENGULFING PRICE ACTION AND ALL OTHER RULES REMAIN UNCHANGED.
1. FOR SHORTS THE SIGNAL CANDLE MUST CLOSE IN THE BOTTOM 25% OF ITS RANGE AND ITS HIGH OR THE PREVIOUS CANDLES HIGH MUST BE THE HIGHEST HIGH OF THE LAST 5 CANDLES.
FOR LONGS THE SIGNAL CANDLE MUST CLOSE IN THE TOP 25% OF ITS RANGE AND ITS LOW OR THE PREVIOUS CANDLES LOW MUST BE THE LOWEST LOW OF THE LAST 5 CANDLES.
EXTRA ANALYSIS
I tried to make this a non-discretionary system, but some basic understanding of the finer points of trend reading and stopping points will improve your results.
With that in mind this video goes over some techniques for setting up your charts.
PLEASE KEEP DISCUSSIONS REGARDING EA'S, ROBOTS OR EXTRA INDICATORS TO A MINIMUM, FOCUS IS ON LEARNING TO TRADE TREND, PRICE ACTION AND MOMENTUM. OUR ETHOS SHOULD BE TO KEEP THINGS SIMPLE AND CONSISTENT. WE ARE NOT CONCERNED WITH TRADING 100% OR HITTING HOME RUNS, WE WANT SMOOTH STEADY ACCOUNT GROWTH
M15 SCALPING IDEA
There is also a way to use the buy sell line for M15 scalping.... if you prefer that style of trading...
It is based on strategies used by Steve Primo, it is not my creation.
The concept is to use TREND>PRICE ACTION>MOMENTUM to get your trading consistent.
We identify a trend, we wait for a retrace, then a signal the retrace has ended and finally momentum back in the direction of the trend.
RULE 1 TREND
IF PRICE IS ABOVE THE 50SMA WE WILL ONLY LONG.
IF PRICE IS BELOW THE 50 SMA WE WILL ONLY SHORT
IF THE 50SMA IS FLAT OR PRICE IS CHOPPING ABOVE AND BELOW THEN THE TRADE IS HIGH RISK AND YOUR WIN RATE WILL BE AFFECTED.
ideally we are looking for a nice slope on the 50sma showing a sustained trend in one direction...
RULE 2 PRICE ACTION
BULLISH ENGULFING FOR LONG, BEARISH ENGULFING FOR SHORT. WE CALL THIS A SIGNAL CANDLE.
OPEN AND CLOSE OF THE CURRENT BAR MUST ENGULF THE OPEN AND CLOSE OF THE PREVIOUS BAR.
IF PRICE ENGULFS MORE THAN 1 PREVIOUS BAR IT IS A STRONGER SET UP.
IF PRICE BARELY ENGULFS THE PREVIOUS BAR IT IS A WEAKER SET UP.
AVOID H1 ENGULFS BETWEEN NY CLOSE AND ASIA OPEN.
RULE 3 ENTRY
PRICE MUST TRADE 1 PIP LOWER THAN THE LOW OF THE SIGNAL CANDLE FOR SHORTS
AND 1 PIP HIGHER THAN THE HIGH OF THE SIGNAL CANDLE FOR LONGS.
(dont wait for this candle to close, once you exceed the high or low enter the trade)
IF YOU ARE USING PENDINGS ALLOW FOR SPREAD.
ENTRY MUST BE TRIGGERED ON THE VERY NEXT CANDLE
WE ARE LOOKING FOR MOMENTUM BACK IN THE DIRECTION OF THE TREND.
RULE 4 STOP LOSS
STOPS ARE PLACED 1 PIP ABOVE THE HIGH OF THE SIGNAL CANDLE FOR SHORTS.
1PIP BELOW THE LOW OF THE SIGNAL CANDLE FOR LONGS.
RULE 5 POSITION SIZING
ALL TRADES SHOULD HAVE A RISK OF 2%, REGARDLESS OF PIP SIZE YOU MUST ADJUST YOUR LOT SIZE SO YOUR RISK IS EQUAL ON EVERY TRADE..... VERY IMPORTANT !!!!!!!!
RULE 6 TRADE MANAGEMENT
YOUR TARGET SHOULD BE 1/1
AT 1/1 R/R MOVE YOUR STOPS TO BREAK EVEN
if your risk is 50 pips you would move your stops at +50 pips.
AT 2/1 R/R TAKE SOME PROFITS OFF THE TABLE. THE AMOUNT IS ENTIRELY DOWN TO YOUR RISK TOLERANCE, I WILL USUALLY CLOSE 1/2 OR ALL OF MY POSITION.
ALTERNATE SIGNAL CANDLE
THE ENGULFING SET UP WILL NOT CATCH ALL MOVES BACK INTO A TREND SO WE HAVE AN ALTERNATE SIGNAL CANDLE THAT IS JUST AS SUCCESSFUL.
THIS IS JUST AN ALTERNATIVE TO THE ENGULFING PRICE ACTION AND ALL OTHER RULES REMAIN UNCHANGED.
1. FOR SHORTS THE SIGNAL CANDLE MUST CLOSE IN THE BOTTOM 25% OF ITS RANGE AND ITS HIGH OR THE PREVIOUS CANDLES HIGH MUST BE THE HIGHEST HIGH OF THE LAST 5 CANDLES.
FOR LONGS THE SIGNAL CANDLE MUST CLOSE IN THE TOP 25% OF ITS RANGE AND ITS LOW OR THE PREVIOUS CANDLES LOW MUST BE THE LOWEST LOW OF THE LAST 5 CANDLES.
EXTRA ANALYSIS
I tried to make this a non-discretionary system, but some basic understanding of the finer points of trend reading and stopping points will improve your results.
With that in mind this video goes over some techniques for setting up your charts.
Inserted Video
PLEASE KEEP DISCUSSIONS REGARDING EA'S, ROBOTS OR EXTRA INDICATORS TO A MINIMUM, FOCUS IS ON LEARNING TO TRADE TREND, PRICE ACTION AND MOMENTUM. OUR ETHOS SHOULD BE TO KEEP THINGS SIMPLE AND CONSISTENT. WE ARE NOT CONCERNED WITH TRADING 100% OR HITTING HOME RUNS, WE WANT SMOOTH STEADY ACCOUNT GROWTH
M15 SCALPING IDEA
There is also a way to use the buy sell line for M15 scalping.... if you prefer that style of trading...
Inserted Video
Attached Image (click to enlarge)
tradewith60
