Daytrading/scalping with high leverage - my proven strategy

Setup 20 - aftermath

EURJPY

Perfect setup for both classic AND cloud pattern.



Big picture changed - now strongly supporting bullish trades.

All conditions are met for both classic AND pattern entries.

Price has nicely broken away from the H4 centre line. We have TMA H1 and H4 in agreement, and we have the cloud pattern, which signal strong momentum.

Marked re-entries are also valid (babon signal + break of recent bars).

Perfect entries with almost zero drawdown.

I did not enter because I thought we were approaching the end of the European session, and I closed the terminal when I decided not to take setup 20 (above).

But my clock is 1 hour ahead of GMT... it was actually 3PM GMT, so we still had at least another hour.

Also, when there's a perfect setup like this, it's ok to open a trade even at 4:00pm because the momentum is still alive, with no signs of exhaustion in sight.

This move was worth about +50 points (whether as a single entry or multiple re-entries).

Out of all the 20 setups I have posted today, this is the best one.

No regrets though, as I'm learning by analysing these setups.

Setup 21

AUDUSD Cloud pattern



Also, it is a little early to be trading AUDUSD.

I did not take this trade.

Trade 1

I took this EURJPY cloud pattern trade, but it was against the rules:



The reason I took it was H1 was showing signs of wanting to breakout to the lower side.
I expected that thee current pullback is a good point to enter with low risk, and I can get out very quickly with a small loss if price doesn't confirm my expectation. But if price does confirm my expectations and breaks lower, then it would be a very good profit, as I have an ideal early entry.

Aftermath:


Got out with -5 points

Reasons:
H1 has just closed with a pin bar.
TMA angle changed
Babon gave a buy signal
Price was at the cloud

Although this was a trade with a high r:r potential, I broke the rules, so no surprise.

Lessons from Trade 1:

When you have a good system like Babon, then there is no need to "guess the market".
Just be patient and wait for a good setup.

Trade like the Cheetah - when you are sure... not when guessing. If unsure, stay out.

I also broke one of my personal rules = no "expected" reversal trades.
It seems I have a problem with "expected reversals" because of another system which trades them.

With Babon - only take confirmed trend or confirmed reversal trades.
Probably best to stay away even from confirmed reversals for the time being.

Only good thing about this trade was the exit. Did not wait for a -15 point SL. Took -5.

Being trigger happy with entries = VERY wrong
Being trigger happy with cutting losses = VERY good

No more guessing, no more "expected" reversals.

Trade 2

AUDUSD Cloud pattern



Although I entered this trade based on another system, but I see that it corresponds to Babon, so I'm going to include it as a Babon trade.

Valid Babon entry would be the arrow and breakout (my entry from the other system was about 10 points above this level at 0.7700).

Why this is a valid Babon trade:
Price spiked due to High Impact news (Aussie Bank).
We followed the rules and stayed away for an hour after this news.
We see a good reversal on the Big picture, bouncing off the H4 TMA line (resistance), and forming a good engulfing candle.
Price is also above H1 border when usually means pull-back.
Also, entire TMA M1 was beyond TMA M15, when indicates strong pull-back.
Haiken Ashi showed bullish exhaustion, and TDI "hooked" down - confirming exhaustion, also TDI is at the 68 line, and about to cross.
We have also just had a 140 point move upwards without any notable pull-back, so we are due for one.
Babon signal and price breakout would be our entry.

Ideal exit would have been the circled area, when we crossed all 3 TMAs, for a good +25 points or more.
I got out above the circled area, not a great exit, but still got +23.
Yes price goes into the cloud in the middle of the trade and returns to Break even, but Big picture still showed bearish bias.

-5 + 23 = +18

Setup 22

EURJPY Cloud pattern which became a "Double Breakout" Pattern:



All rules are being followed, except TDI is at the line. But when momentum is this strong, we can use our discretion, while being on the lookout for signs of exhaustion.

Plenty of valid Babon and Cloud re-entries.

I did not take this trade as I was pre-occupied the AUDUSD trade.

I would have probably gotten out when price crossed all the TMAs before the large spike for about +45, while missing out on the spike (another +45).

Can't catch all of them

Setup 23

AUDUSD cloud pattern



The breakout I pointed out seems a valid entry. Exit would be the circled area where price crossed all 3 TMAs for about +14 points.

TDI does not confirm the trade, and we are above the H1 TMA.

But H1 Price Action (pinbars) do show bullish bias.

It looked scary to enter, and I'm not yet experienced enough for this kind of setup.

I did not take this trade.

100% agreed! And i think learning this way is the best way, so keep posting
Wish you a lot of green pips!

Regards, Michael

Setup 23 - aftermath

Yesterday, EURJPY and AUDUSD both decided to do a HUGE double breakout.



I did not take these trades yesterday as I was afraid I would be "chasing" the price upwards.
But the momentum was very strong.

Trading reversal setups against a "Double Breakout" pattern seems like a very bad idea.

Both pairs are currently in TMA H1 beyond H4 Pattern, which means we better stay away.

Can you please share the Excel file? I mean, the original to set up the trade.

Thanks,

Ivan

Hey guys,

I'm normaly a silent reader here in the forum but started now practice with this system.
Maybe someone can review my first trades?

I dont know what i did wrong,
First trade i thought there will be a tma channel beyond the cloud, i was wrong. thought the correction will be longer..
Seccond trade i thought the opposit, again wrong

http://fs1.directupload.net/images/150604/q778vo5f.jpg

sorry for the link, how can i upload images direct to ff?

thanks and good trades to everybody.

Hello themoney,

May i ask why did you take these trades ? There wasn't TMA beyond cloud patterns. And also they are not in agreement with big picture (the first trade)
Regards, Michael

hey, thanks for your answer.

so in the first trade i thought the correction would be longer, tma wasnt looking so bad, much space to tma 15. i think after such a big h1 candle we can expect a correction.

second was the opposit, price is now under the cloud, and formed a lower low - I entered too early i think, id better waited until it really breaks the lower low... (what did not happen)

are u trading this strategy? thanks and peace

Hi and welcome to the forum.

I could share the file, but I genuinely do not think that would be good for you...

As I mentioned, I believe it is best that each person reads the rules of the system which Favorite explained in depth - with illustrations etc... and makes their own summarised checklist - using their own understanding, their own words.

You can then ask if there's anything which is not clear, or you can put a screenshot of your checklist, and people can correct you if there's anything incorrect.

As you see from my list - its a LOT of rules - and there's a lot of discretion involved. It's not a "simple" system. You need to know the rules very well. And a very good way of learning something is by summarising it in your own words.

I'm very sorry that I do not agree to your request - but honestly - I feel I would be doing you a disservice if I sent you my list.

But here's an empty checklist file you can use to write your check-list.
Right click on the check boxes to select them, then you can move them, copy/paste etc...

Here's your trade:


Im not the expert, but here's why I think both these trades were against the rules:
It seems there's a "clear trend" to the downside...


x (NOT) Distance of TDI lines is 10+ (TDI green and red and more than 10 points apart - so we don't trade)
x (NOT) TMA H1 beyond H4 Pattern (H1 TMA is beyond the H4 TMA - so we don't trade - at least for us who are learning)
x (NOT) TMA H1 & H4 disagree Pattern (H1 price direction is down, H4 price direction is up - so we don't trade)

Even if all the above was "ticked", for the cloud pattern entry:
x TMA M1 shows good angle (you entered when TMA changed direction...)
x Exit if TMA M1 changes (if TMA changes direction - we should exit - not enter)

-

But well done on coming out of the "silence". Keep learning, and post any question and setups and get feedback from the traders here. That is how I'm learning.

Setup 24

GBPJPY cloud pattern.



There are multiple arrows showing multiple entries.

Both the red arrows would have hit the 15 point SL.

The first red arrow is an entry on a breakout of the recent swing. This swing was about 25 points, so if were waiting for price to go up 25 points to break the swing high - we can easily get stopped out by a pull-back, as it happened.
The correct entry was the previous arrow - a bob signal and/or breakout from the recent few bars (not the whole swing).

The second red arrow was incorrect IF we entered on the breakout line I've drawn. This is because again - this is a breakout of the swing - which is against the rules - AND this candle is 10+ points long, and we don't enter on a large candle.
But if we had entered on the same candle just as price was breaking out of the few recent candles, it would have been a good entry (10 points below the top of the candle).

So this is an interesting one. Same candle... entry at the beginning is valid and profitable, but entry at the end of it is invalid and a losing trade!

All the other arrows are valid setups.

Favorite is a genius! You can tell just by this screenshot!

From the first arrow - this move was about 86 points!!!

I was away and did not take this trade.

Trades 3 and 4

GBPJPY cloud pattern (right after the setups above).



So I arrived at the pc, having missed a huge move, but momentum was strong and it looked like the Double breakout pattern was forming.

So I entered on the first arrow at the break of the recent few bars.
Only problem was, price jumped so quickly as I was clicking that I got in right at the top of this 15 point candle.
So I've broken 2 rules here:
1 - I'm entering on a "swing" breakout instead of a recent candles breakout and/or babon signal, which would have gotten me in about 6 bars earlier (and about 20 pips better entry). I did this because I came late to the show.
2 - The candle is too large.
Luckily, even though this entry was terrible, I got away with it.

But I did not get away with the exits... I could have taken about +20 points at any of the circles, but I convinced myself it would go higher.

I even took another entry on the 2nd arrow on the Babon signal... even though TMA was changing direction...

I was convinced in my head that price is going up. But it was clear that price tried to break above 191.50 area THREE times and failed.
After my 2nd entry, it tried to breakout for the FOURTH time and failed.
TMA M1 changed direction - which is an exit signal for the cloud pattern, yet I stayed...

Even though both entries broke the rules, I could have closed both of them for profit on the last circle - but I didn't.

Price went into the cloud and I didn't exit... and I waited until both these trades hit their 15 point SL.

Terrible trades. I lost on two invalid entries while I could have taken +20 on the first and +10 on the second.

Luckily, because I came late to the whole move, I entered with SMALL sizes, so the losses were not big. Maybe that's the reason why I got sloppy with these trades.

I took these and lost -15 and -15 points.

Lessons from trades 3 and 4:

- In any trend, price will eventually stop going up/down. At the end of the move, maybe some valid re-entries will take a loss. I say "maybe" because if we follow the entry rules correctly, some of these "final" bad re-entries would be filtered out (in this case, TMA changed direction, and Price Action was showing strong resistance, price went into the cloud etc).

- Therefore avoid "chasing" big moves, and if you do, be VERY trigger happy with the exits, get out with small tp or small loss, and do not wait until the whole -15 SL gets hit.

- Don't enter two trades at the same time (unless each is half/quarter size etc).

I was lucky because I took small sizes on these trades, and I think that's why I broke the rules as I didn't really care if they made a loss.

Trade 5

AUDUSD cloud pattern:



I entered at the line.

Invalid because big picture shows we are at the centre line area, and I'm chasing a weak momentum cloud pattern!

Even still, I could have taken profit at the TMA, but didn't.

I got out as soon as price went into the cloud for -5 points.
Being trigger happy with cutting losses is VERY good. This would have been a -15 points if I had left it.

But I took a small size on this trade (because it was centre line) so the loss at -5 points was small.

Trade 6

GBPUSD cloud pattern.



I took a full size trade on this as I was more confident with it, quickly took +15 points at the TMA, and made back more than all the losses from trades 3, 4 and 5.

I got out early because I was happy with the +15, and had just made back the losses on a few bad trades.

Price actually went down another 20 points without me