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Set-ups for the day and what to watch during the day

1.   Strategic decision : Chart 4 hour

21 EMA :    heading up - heading down -  ranging (= no trend)
ADX : Over 30 = strong trend -  Under 30 = ranging (no trend)
OsMA :   heading up - heading down - divergence?
Stocs

Influences from longer term time frames:
Watch longer-term Fib levels: recently broken through and retracing for a re-test (leaving wick on longer time frame charts), recently finished re-test and now pulling away in direction of original break, in a range between two key Fib. levels, etc.) = Bull or Bear or Ranging

2.   Trading decision influences

News for the day? Time
Daily range at 09.00 GMT:  High – Low – Pivots - 50 SMA - 200 SMA

3.   Tactical - Chart: 1 Hour

Trend: trade only in the direction of the strategic decision
ADX: use OsMA or Stocs
ABC-D pattern: Entry and Exit levels (Fibs)
Trading / Trend... confirm trend by price moving outside of Tunnel of 5's

Ranging: between upper and lower daily range
Stocs (ADX under 30)
Pivots / 50 SMA / 200 SMA
Pivots or SMA or high/low of the range: Entry and Exit levels

Break of the range:
Take the 30 min chart to confirm a new strategic decision
Wait for breakout – pullback – continuation pattern to confirm the new trend

4.   Money Management

Risk only 2% of the account in one trade assuming stop gets hit.  To use more lots, use a tighter stop.  If the position requires a wider stop, use less lots.

Risk only 6 % of the account in the sum of several trades (if SL is set the break even in one trade, this trade does no longer affect the risk ratio 2% or 6%)

Calculate the risk/reward ratio before the Entry. Take only trades with a ratio of 1:2 or better. (pips to risk from Entry level to SL level : pips to make from Entry level to TP level)

Record the trade in the fxPlan excel sheet: make notes and give it a grade based upon how many pips you took out relative to the entire range of the move: 75%+ = A, 50-75% = B, 25-50% = C, under 25% = D, L = loss.

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Categories : Finance    Themes : Trading
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