Before getting started, in case of wasting your time, I would like to remind you that this is an intraday trading system, which means you have to be able to trade at the time when the forex market is in most liquidity, including London time 8:00am to 11:00am and 1:00pm to 4:00pm (which is best with London market and New York market open). I suppose this system could work well on higher time frame for mid/long term trade but I never tried. Moreover, what I share here is a system, not an indicator or a strategy, which means you have to learn and try it (for a long time maybe) instead of simply following signals. This system was not created by me, I learned it from my tutor and would like to share it as he does. It only used simple analysis tools and rules, but it needs patience and discipline when you trade.
In my personal opinion, trading is not easy, especially for independent traders like us. It is irresponsible that simply sharing an indicator, a strategy, or signals here and tell others that trading is as easy as using ATM. I would like to help, but I have to say that not all traders will stick to the system and win. That is forex market, and it may not be suitable to everyone.
Introduction
I am an independent trader with more than four years trading experience. I have started following this high probability intraday trading system since the summer in 2013, and up to date the result is quite good.
I started this forum for two purpose: Firstly, Id like to use this community to push me to keep updating a trading journal. I used to ignore this step but now I realize that a trading journal is essential for success in trading life and I will talk about this later. Secondly, besides trading, I always wish to start a related career with so much spare time. This high probability system is from a Chinese tutor, Yuehua Shao, who learned and combined techniques from many famous trading masters (including Steve Nison, Peter Bain, Cris Lori, Vic Noble, Rob Booker, etc.) Following his spirits, I would like to share this trading system with independent traders around the world through community network just like he does in China.
I suppose that sharing this system would certainly take me much time on writing trading journals and answering questions, but at this start-up step, Id like to share core concepts and try to answer all questions here for free. In the meantime, I am working on preparing detailed training materials and establishing website, you can PM me for more details if you are interested in this system.
Brief to the system
This system uses a trend-following and right-side breakout strategy; therefore, I only try to find entries on one direction based on my daily analysis. It could be working on any forex pairs, and I also use it on gold, silver and oil. Generally, at the beginning of each day, I search all pairs on high time-frame charts (Day, H4) and find several ones with clear direction bias during the day; then I wait for the entry signals on low time-frame (H1, M15, M5) to take entry. If the price goes against me, I would not take any trades or would get a small loss by SL. Normally I could have several chances for entry in one day (especially on Tuesday, Wednesday and Thursday); however, there may be no chances in consolidating market just like it is recently, so it really needs patience.
Trading is an odds game. Though it is called high probability trading system, you cant always win. Ideally, it is possible to get a winning ratio between 60% and 70%, and some traders who strictly stick to the rules could get a winning ratio at around 80% but they take less trades.
Money management is essential to forex trading. I have experience on blowing several accounts, and after that I realize poor money management is the murder but not trading strategies or mindset. Now I follows a simple money management rules, never trade more than 2% risk of my account balance, and only take 1% risk on trades with uncertainty. With 2% risk management, even after five continuous loss, you will still have 90% balance and you may earn this back with next trade. Money management example: for an account with 10,000USD, never trade with potentially loss more than 200USD, the lot size is not fixed but the potential loss. For EURUSD, if your initial SL is 20 pips, take 1 lot trade; if SL is 40 pips, take 0.5 lot. You may find some EA tools to help you calculate this quickly on MT4 platform.
Five Basic Technical Tools for Analysis
Only five tools/indicators are used for technical analysis by this system, they are all basic to forex trading, including Candlesticks & Chart Patterns, Support & Resistance Levels, Moving Average, Multiple Time Frame Analysis, and Stochastic Oscillator.
Candlesticks Patterns includes Marubozu, Hammer, Shooting Star, Engulfing, Morning & Evening Stars, etc. They are mainly used on higher time frame to determine the direction. Chart Patterns includes Double Tops/Bottoms, Head and Shoulders, Rectangle Patters, Wedge Patterns, etc. They are used on higher time frame to determine the direction and trading room.
Support & Resistance Levels includes Horizontal S&R levels, Trendline, Fibonacci level. They are used to determine if there are enough room for trading.
Moving Average includes 15EMA used as S&R levels and 50SMA used as an reference for direction.
Multiple Time Frame Analysis. With other tools/indicators, we find the trading direction on higher (H4, Day) time frame and entry opportunities on lower (H1, M15, M5) time frame.
Stochastic Oscillator (5,3,3) is only used on H4 chart to support our decision, confirm long when it goes up or above 80, or confirm short when it goes down or below 20. It is only a supportive indicator and sometimes it could be ignored.
Six Steps in A Trade
What I share here is six steps I follow on a trade, these include:
Determine the trading direction: use above tools on higher time frame and decide your intraday trading direction. It is quite simple, and if you cannot confirm the direction just ignore this pair today.
Search the support & resistance levels: find key S&R level on higher time frame to make sure there is enough room for you to trade on your direction. If the range between the price and the level is narrow (normally less than 20 pips), ignore this pair. You may find several suitable pairs after taking 1st and 2nd steps.
Wait for the price going into the key zone: normally these are S&R level tested on lower time frame or high/low of previous day.
Take the entry: when the price breaks out the key level and the SL is reasonable, take the trade.
Manage the trade: manage your trade with the market changing, choose to move SL (to smaller not larger) or close position if price goes with you or potentially against you. I don't recommend only leaving SL and TP without managing the trade, you may lose less or earn more with active management.
Record your trade on trading journal: I used to ignore this step but I finally realize this is the key to find weakness, be confident, and improve trading skills. After all, for intraday trading in forex market, history always repeats.
All above is the full structure of SPES high probability intraday trading system. For a trading system, of course, above is not helpful enough for you to survive in the market. I will keep uploading sample trades based on real trading, and this will certainly help you understand this system a lot. Please fee free to leave questions and PM me if you want more details about this system.
Once I was told that one had to spent 10,000 hours to be familiar with a skill. That's a lot! However, if you stick to this system and do 500 serious trades, you may find yourself a different life, so shall we start?
UPDATED 13/08/2015
Eight Rules for High Probability Trading
1. Follow the trend on high time frame
2. Have enough trading range between entry price and key S&R level
3. Reasonable risk - reward:risk ration should be more than 1:1
4. Right-side trading - only trade breakouts
5. Price has tested key level before breakout
6. Candlesticks pattern supports trading direction
7. Indicators support trading direction (H4 Stoch, lower time frame MA)
8. Price has a fake/cheat movement before breakout
Few breakouts could satisfy all eight rules but if you only take trades with eight rules you are likely to get a very high win ratio. Normally top four rules must be satisfied and the more conditions met the higher probability to win. Try to filter fake breakouts with these rules above.
In my personal opinion, trading is not easy, especially for independent traders like us. It is irresponsible that simply sharing an indicator, a strategy, or signals here and tell others that trading is as easy as using ATM. I would like to help, but I have to say that not all traders will stick to the system and win. That is forex market, and it may not be suitable to everyone.
Introduction
I am an independent trader with more than four years trading experience. I have started following this high probability intraday trading system since the summer in 2013, and up to date the result is quite good.
I started this forum for two purpose: Firstly, Id like to use this community to push me to keep updating a trading journal. I used to ignore this step but now I realize that a trading journal is essential for success in trading life and I will talk about this later. Secondly, besides trading, I always wish to start a related career with so much spare time. This high probability system is from a Chinese tutor, Yuehua Shao, who learned and combined techniques from many famous trading masters (including Steve Nison, Peter Bain, Cris Lori, Vic Noble, Rob Booker, etc.) Following his spirits, I would like to share this trading system with independent traders around the world through community network just like he does in China.
I suppose that sharing this system would certainly take me much time on writing trading journals and answering questions, but at this start-up step, Id like to share core concepts and try to answer all questions here for free. In the meantime, I am working on preparing detailed training materials and establishing website, you can PM me for more details if you are interested in this system.
Brief to the system
This system uses a trend-following and right-side breakout strategy; therefore, I only try to find entries on one direction based on my daily analysis. It could be working on any forex pairs, and I also use it on gold, silver and oil. Generally, at the beginning of each day, I search all pairs on high time-frame charts (Day, H4) and find several ones with clear direction bias during the day; then I wait for the entry signals on low time-frame (H1, M15, M5) to take entry. If the price goes against me, I would not take any trades or would get a small loss by SL. Normally I could have several chances for entry in one day (especially on Tuesday, Wednesday and Thursday); however, there may be no chances in consolidating market just like it is recently, so it really needs patience.
Trading is an odds game. Though it is called high probability trading system, you cant always win. Ideally, it is possible to get a winning ratio between 60% and 70%, and some traders who strictly stick to the rules could get a winning ratio at around 80% but they take less trades.
Money management is essential to forex trading. I have experience on blowing several accounts, and after that I realize poor money management is the murder but not trading strategies or mindset. Now I follows a simple money management rules, never trade more than 2% risk of my account balance, and only take 1% risk on trades with uncertainty. With 2% risk management, even after five continuous loss, you will still have 90% balance and you may earn this back with next trade. Money management example: for an account with 10,000USD, never trade with potentially loss more than 200USD, the lot size is not fixed but the potential loss. For EURUSD, if your initial SL is 20 pips, take 1 lot trade; if SL is 40 pips, take 0.5 lot. You may find some EA tools to help you calculate this quickly on MT4 platform.
Five Basic Technical Tools for Analysis
Only five tools/indicators are used for technical analysis by this system, they are all basic to forex trading, including Candlesticks & Chart Patterns, Support & Resistance Levels, Moving Average, Multiple Time Frame Analysis, and Stochastic Oscillator.
Candlesticks Patterns includes Marubozu, Hammer, Shooting Star, Engulfing, Morning & Evening Stars, etc. They are mainly used on higher time frame to determine the direction. Chart Patterns includes Double Tops/Bottoms, Head and Shoulders, Rectangle Patters, Wedge Patterns, etc. They are used on higher time frame to determine the direction and trading room.
Support & Resistance Levels includes Horizontal S&R levels, Trendline, Fibonacci level. They are used to determine if there are enough room for trading.
Moving Average includes 15EMA used as S&R levels and 50SMA used as an reference for direction.
Multiple Time Frame Analysis. With other tools/indicators, we find the trading direction on higher (H4, Day) time frame and entry opportunities on lower (H1, M15, M5) time frame.
Stochastic Oscillator (5,3,3) is only used on H4 chart to support our decision, confirm long when it goes up or above 80, or confirm short when it goes down or below 20. It is only a supportive indicator and sometimes it could be ignored.
Six Steps in A Trade
What I share here is six steps I follow on a trade, these include:
Determine the trading direction: use above tools on higher time frame and decide your intraday trading direction. It is quite simple, and if you cannot confirm the direction just ignore this pair today.
Search the support & resistance levels: find key S&R level on higher time frame to make sure there is enough room for you to trade on your direction. If the range between the price and the level is narrow (normally less than 20 pips), ignore this pair. You may find several suitable pairs after taking 1st and 2nd steps.
Wait for the price going into the key zone: normally these are S&R level tested on lower time frame or high/low of previous day.
Take the entry: when the price breaks out the key level and the SL is reasonable, take the trade.
Manage the trade: manage your trade with the market changing, choose to move SL (to smaller not larger) or close position if price goes with you or potentially against you. I don't recommend only leaving SL and TP without managing the trade, you may lose less or earn more with active management.
Record your trade on trading journal: I used to ignore this step but I finally realize this is the key to find weakness, be confident, and improve trading skills. After all, for intraday trading in forex market, history always repeats.
All above is the full structure of SPES high probability intraday trading system. For a trading system, of course, above is not helpful enough for you to survive in the market. I will keep uploading sample trades based on real trading, and this will certainly help you understand this system a lot. Please fee free to leave questions and PM me if you want more details about this system.
Once I was told that one had to spent 10,000 hours to be familiar with a skill. That's a lot! However, if you stick to this system and do 500 serious trades, you may find yourself a different life, so shall we start?
UPDATED 13/08/2015
Eight Rules for High Probability Trading
1. Follow the trend on high time frame
2. Have enough trading range between entry price and key S&R level
3. Reasonable risk - reward:risk ration should be more than 1:1
4. Right-side trading - only trade breakouts
5. Price has tested key level before breakout
6. Candlesticks pattern supports trading direction
7. Indicators support trading direction (H4 Stoch, lower time frame MA)
8. Price has a fake/cheat movement before breakout
Few breakouts could satisfy all eight rules but if you only take trades with eight rules you are likely to get a very high win ratio. Normally top four rules must be satisfied and the more conditions met the higher probability to win. Try to filter fake breakouts with these rules above.
