Sunday, April 22, 2012

Trading Plan: Trading with just 6 rules:

Setups:
  • Looking for an entry in a "decision point area" (price range of 20 ticks above/below last swing high/low on 10 min chart
  • Looking for an entry after there was a trend change and price retraced back to the 50% level
Entries:
  • Confirmed Breakout (2nd time price goes above a 30 sec. bar that closed above the highest high of the prior two 10 min bars)
  • AB Correction (price goes below last swing low on 30 sec. chart and then goes up again)
Exits:
  • Trailing the stop below the bar that closed below the lowest low of the prior two 10 min bars (alternative automatic 3x atr trailing on 3 min chart) 
  • Exiting at the decision point on fast upmoves or session close or trailing below the 10 min bar that closed below the daily target.
Keeping in mind that after 3 moves up usually then trend is over:


Never the less the risk to miss a re-entry its better to just trail the stop rather than exit and make a re-entry:


and of course dont use any other trading method such as automated trade setup, as there needs to be price action at certain entry levels (50% or DP):


one last note: sometimes trailing a stop with atr trailing on very volitle markts can be not so profitable,
in that case volume spread (spikes) analysis helps me to decite to exit a trade or let it run at a new high or low:







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