Trade the swing – One area of value to another on the daily timeframe
» Custom current and longer term (1×3) simple moving average to define the trend on the higher timeframe. Mentioned trend is just for a reference.
» Primary area of value – S/R Levels. 2 most recent supports and 2 most recent resistances
» Secondary area of value – significant channel, trend lines or fibonacci sequences (if any)
Trade the trend – which is a swing on the daily timeframe
» Custom current and longer term (1×3) respected simple moving average to create TAZ and define the trend. Trade with this trend, no going against.
» Additional S/R levels, trend lines, channels or fibonacci sequences for added confluence (if any)
Range ››› Breakout ››› Crossover ››› Pullback ››› Entry within TAZ
Limit order at confluence level or stop order on shorter term moving average or market order when price is inside with candlestick trigger.
If daily trend is aligned with its swing which aligns with the trend on the 4H timeframe, consider it a higher probability trade. Therefore, look to add and hold on to the position longer.
If breakout swing registers ADX > 25, trade also considered higher probability. Place a tighter stop loss and be aware price might not pullback to breakout point.
Alternative timeframes can be used, for example, the 4H as a reference and 1H or 30mins timeframe for executing the entry.
» Stop loss – 0.75% x capital based on 4H timeframe according to market structure and longer term moving average. General rule: 2 barriers broken and 2ATR to take into consideration volatility
» Risk:Reward – Ratio must be at least 1:2
» Target profit – Next area of value
» Shift point – When trade moves in favour equidistant to risk, shift stop loss to breakeven
» Trailing stop – Under/above swings or price closing and breaching longer term moving average
Greed killed you once. Do not let it kill you again.
Fear killed you once. Do not let yourself be in a position to fear again.
Panic killed you once. Do not be greedy and you will not have fear and you won’t have to panic and you won’t get killed again.