Before Trading
Review trading plan summary
Check for news. Red news at ForexFactory.com requires I am flat 15 minutes before and after announcement on new or whole trade.
Mark Weekly open (brown line) and Daily open (purple dash)
Mark fulcrums near price action (blue lines)
Note the actions and interactions of my 4 MAs (8, 20, 50, 200)
Pre-trade Checklist
Long:
Prior HH been broken? Yes
Pull back? Yes
Stop and T1 calculated? Yes
Risk to Reward acceptable? Yes
Bar taken out? Yes
Price to the left of 8, 20 & 50 MAs? Yes
Short:
Prior LL been broken? Yes
Pull back? Yes
Stop and T1 calculated? Yes
Risk to Reward acceptable? Yes
Bar taken out? Yes
Price to the left of 8, 20 & 50 MAs? Yes
After Trading
Review trades - Did I follow trading plan?
Journal trades
Review charts to ensure I took all the correct trades I could have.
Review targets to determine if I am too conservative or too aggressive.
The Basics
Currency pairs: E$ and TBD
Time of Day: TBD.
Timeframes to trade: 5m, 15min,
Remember to trade an area, not just bar takes out bar.
Must list three to five things I like about trade before entering.
I will trade two types of trades: Actions at Areas and Powerful Events regardless of Area.
Actions at Areas (Trend Established)
To enter a trade I am looking for reversal signs at specific areas. The areas are support or resistance as defined by the recent pivots or moving averages. The reversal signs include bottoming or topping tails and narrow range bars.
For a Buy, price should pull back and retest support. For a trigger, price should move above support and to the left of the MA. The 8 MA is preferred. 20 MA will work. (Price between 20 & 50 is no trade zone.) Execute the trade when a subsequent bar breaks the high of the event (setup) bar by 1 pip plus the spread.
For a Sell, price should price should pull back and retest resistance. For a trigger, price should be below resistance and to the left of the MA. The 8 MA is preferred, 20 MA will work. (Price between 20 & 50 is no trade zone.) Execute the trade when the subsequent bar breaks the low of the event (setup) bar by 1 pip plus the spread.
Actions at Areas (Trend not Established)
Breakout & Breakdown
Look for higher lows (or lower highs) to be ready for the next move during a pause in the market. These often happen at or near a Moving Average. The trade is taken when price breaks the horizontal pivot line.
Breakout Play
Look for a narrow sideways base with the 8ma and/or the 20ma rising (ideally). Price should stay above the MAs. Buy when a bar breaks above the last 2/3s of the base. Stop is one pip below the entry bar’s low.
Breakdown Play
Look for a narrow sideways base with the 8ma and/or the 20ma declining. Price should stay below the MAs. Sell when a bar breaks below the last 2/3s of the base. Stop is one pip above the entry bar’s high.
Actions not at Areas
These events are Single Bar Pullbacks and Big Bar Continuation.
Pullback (long) entry
Confirm the trend is upward and price is to the left of the MAs. Bar 1 must be a bullish green bar. Look for one or more bars to pull back toward the MAs (red bars). Immediately buy when the next green bar trades 2 pips above the highs of a red bar. (If a green bar does not take out the immediately preceding red bar, and the next bar is also green, trade can be taken when small green bar is taken out.) May need to be more than 2 pips, depending on spread.
Pullback (short) Entry
Confirm the trend is downward and price is to the left of the MAs. Bar 1 must be a bearish red bar. Look for one or more bars to pullback toward the MAs (green bars). Immediately short when the next red bar trades 2 pips below the lows of a green bar. (If a red bar does not take out the immediately preceding green bar, and the next bar is also red, trade can be taken when small red bar is taken out.) May need to be more than 2 pips, depending on spread.
Big Bar (continuation)
The Big Bar trades are the only entries that have no pullback or retracement. The move is so strong, that I enter the trade …