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I am looking for some advice from some more experienced trader to improve on my trading system/rules. I have removed a lot of indicators from my system and I am designing my own based on the past 9 months experience in learning and experimenting.
Please review and add or take away what you feel may benefit my system.
Watch or read a motivational trading video or article and visualize your day
Log into your MT4 trading platform and broker account set up your charts
Check & print out news for the day stick on your whiteboard
Analyse forex factory interactive discussions to get a feel/buzz/hype for the day
Pre Trade Checks
Analyse the trend filter and look for multiple red/green circles
Analyse at major & minor pairs trending using the 3 SMA 30, 50, 100 and filter out good/bad opportunities (close down the bad ones)
Write down the pairs on your whiteboard your strongest opportunities in the market and reasons why
Analyze the average true range and projections check the overnight Asian session moves
Decide if market is in a Trend, Range or Breakout phase
Analyse longer timeframes for the trend ensure they match up approximately
Analyse M/W/D/4/1 candle colors match as many up as possible
Analyse and draw major and minor areas of support and resistance levels on higher timeframes preferable 4/D/W/M timeframes -
minor on the 1 Hour. Use market structure extreme points sharp swings.
Analyse the slope up/down detect harmonic waves bouncing off support & resistance, trend lines
Analyse market supply and demand zones (market turning points over previous few days) on multiple timeframes confluences
Analyse flags, triangles, range patterns vortex points and decide if you will be swinging or breaking out depending on pattern confidence (stay clear of expanding triangles and diamond patterns)
Detect psychological levels round numbers 1000, 500, 100, 20 and 80 levels check if you can match them up with major and minor structure points. Also, check If trend lines start and finish with round number both east and west points.
Match up Fibonacci points on the M/W/D/4/1 look for confluence points to match up on the above on your setup charts
Match pivot points M/W/D/4/1 to major and minor structure points of your own if they do not confirm leave them out
Switch to line chart and look for double/triple tops
Analyse candlestick formations on the higher and current timeframes look for patterns and confluences
Look for ABCD/Gartley/Butterfly patterns measure AB CD legs fall in line with 38-61.8% fib levels. Also, look for possible projections to the 100/127/161.8% fib extension levels.
Analyse MACD/RSI for trend points and divergence levels and extreme overbought and oversold levels
Measure risk/money ratio at least 1:1 or higher reward ratio to enable trade to take place
Write down all your analysis in a trading journal and decide if it sounds good and has multiple reasons 3-10 points to trade
Keep your mobile nearby and broker phone number on whiteboard
Enter trade on the 15/30 min charts
Look at the clock and session timings!
Wait for a rally or dip
Wait for the close of the candle
Look for double/triple candlestick formation analyse the momentum of the market
Set your stop loss, entry, 2 take profit levels BEFORE you pull the trigger
Hit Buy on a red candle and Sell on a green candle pin bar if possible
DO NOT MOVE YOUR STOP LOSS LET IT GET HIT
DO NOT MOVE YOUR TAKE PROFIT LEVELS
CLOSE 80% TAKE PROFT LEVEL 1 AT 22 POINTS/20% TAKE PROFIT LEVEL 2 AT 44 POINTS
WRITE DOWN YOUR RESULTS IN YOUR TRADING JOURNAL
AFTER 2 WINS OR LOSSES CEASE TRADING FOR THE DAY
In our humble opinion, it looks like you should simplify things since you're struggling. That is way too many things to think about if you are confused.
1. Just trade the "major" S&R, such as seen on the 4-hour charts. Bounce trades, as opposed to breakouts, would be a better idea for you since it is simpler.
Plot a simple fib retracement picture for exit levels. large moves will retrace to a minimum 23.6% level. Small moves to minimum 38.2. These are your high probability levels.
2. Stay out of the market during medium and high-impact economic data releases. Always check the full calendar.
3. Treat each of the 3 sessions like different days, whereby direction and sentiment can change. For a day trader, this means you may strongly consider exiting prior to next session or tighten S/L.
4. Money management as usual. Not sure why you cite fib ratios, but go on to use take-profit of fixed 22 and 44 pips. Be selective and look for R/R of 2:1 or more.
Then the percentages are on your side. For example, if you risk a total of 2% (of your account balance) for all open positions, a 5-5 win/loss would result in a 10% R.O.I.
Have a trailing S/L strategy, but don't tighten until profit is satisfactory.
Always scale the number of lots based on that max risk %, and have the calculator handy.
5. At this point, you may want to consider automated S&R tools, such as the MurreyMath1.0, and Gann_SQ9. It would eliminate some of the overthinking, which often can translate into uncertainty.
Look for clusters of S&R within the context of the bounce trade scenarios. They may exist at the entry and/or exit levels.
6. Never overtrade your account. If you get nervous, you are usually overtrading.
Keep things simple. Good luck.
Last edited by fxbaja; 01-22-2012 at 06:31 PM.
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