FCBR - Simple Scalping and Swing Trading Strategy
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Overview
This strategy can be used on all pairs, markets, metals, indices etc. You could say that in any market where you can use a graph.
The entry is most important. I recommend an hour or four-hour time-frame. Of course you can trade on any time frame, but lower frames demands for more observation. For example, we can trade the daily time-frame.
Strategy uses buy stop and sell stop order types. The time setting recommend to be careful, there is nothing worse than to set a short expiry.
Strategy
Money management is a very important thing. You should not risk more than 2% per trade from your trading account. This means If I have an $10,000 account, My stoploss will have a maximum value of
$200. Accordingly, we can calculate the maximum size of the position of our trade.
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Entry Rule - When you see the last high correction. And a new low is not created yet. Wait to hit the high correction and open buy trade. Similarly for sell trade, look for last low correction.
StopLoss - It is often about one of the biggest problems of trader. Stoploss will be set to the nearest low / high for some period of time. Often, it is the place where price turned around and went to fill our orders.
Another thing to keep in mind is the risk versus reward. The so-called RRR.
For starters, what is the RRR.
RRR is the ratio of risk versus reward. For example, we run the risk of 50 pips and our RRR 1:3, so our goal is 150 pips.
Generally it should be used according to the selected pair. For volatile pairs, RRR should be 1:3. For less volatile pairs such as USDCHF , RRR is recommended 1:1 to 1: 1.5 or 1:2. For EURUSD it may be even 1:4. In general, it would be logical RRR. This means that the market should have the potential to achieve this award.
Exit Rule - A good choice is when you achieve 1:1 RRR on your position, close half position (retailers, one lot, close 0.50 lot). When we closed half position, we have two options. The first option is to move stoploss to the opening price of our position. If Stoploss hit, we don't lose money. We profit from the first position.
The second option is to move Stoploss to a place opening. When the market reaches the 1:3 or 1:2 RRR move your stop-loss to RRR 1:1. Our Stoploss is now in the plus and trade will end up in profit.
