Simple, Non-subjective, Consistent, Effe
Hello. I want to share a strategy that follows the principles of being simple, non-judgmental, consistent, and most importantly, effective. If a trading strategy is not based on sound ideals, then no matter how many indicators or filters you use, it is destined to fail from the start. Beginners please understand this.
This thread is open to everyone. One of the benefits of the above four principles is that anyone can quickly learn the mechanics of the system because it is not complicated. This doesn’t mean you’ll succeed quickly. The real work lies in applying the strategy day in and day out and trusting that your strengths will prove themselves over time. But basically this is a freestyle thread. Please feel free to leave comments, thoughts, deals, whatever you want. As long as it's positive, productive and on topic.
I'll post the rules up front and then if there's interest we can discuss how these four principles relate to strategy.
The goal is to stack H1 and H4 positions in the direction of the daily and weekly trends. How is this achieved?
1. Only buy when prices increase that day
2. Only sell if the price drops that day
3. All H4 swallowing bars can be taken away
4. H1 engulfing line is ideal after a pullback, but not required
5. The trigger point is the price difference +1 breakthrough of the engulfing bar.
6. Stop loss 10 pips below previous swing low or engulfing line
7. Move your stop loss to the breakeven point of 1:1RR and keep the minimum 2:1RR. Once you reach a comfortable 2:1 (i.e. 3:1 or 4:1), move your stop to 2:1. Then either continue to chase the rise, or follow the trend of the previous day's closing price or H4 candlestick.
8. Previous monthly, weekly and daily highs/lows will be the only lines used for support/resistance. These lines can also be used for profit targets and directional deviations. For example, it would be prudent not to sell into a market that just broke above the previous week's or monthly high.
9. Each trade in the stack is considered a separate position
From this chart example, you can see that there may have been 5 accumulation signals over the past 2-3 days. All signals trigger above their respective daily open prices and on the next candle. The only exception is signal #3, which I think is more like a 2-bar phagocytosis pattern (the yellow arrow is on the 2nd bar). Prices have also recently broken above previous weekly highs, while also trading above previous daily highs for at least the past three days. Both are excellent signs of further upward bias.
Note the multimeter in the upper right corner. H1 to MN1 are all up relative to their current opening prices. If you have received any or all of these signals, there is absolutely no reason to quit any of them at this time. Quite the opposite. You will seek to accumulate as many effective positions in this direction as possible until the market proves your position wrong.
Below is a more detailed look at the same pair of stacks on the H4 chart. For the sake of illustration, entries and exits are rounded to the nearest 5 points. All signals close on their respective open and trigger on the next bar. There is currently no reason to exit any of these positions.
Not every engulfing bar that matches the daily trend will provide such an accumulation opportunity. Some will be stopped out. Some will be squashed. When you do it right, this is what it should look like. Ultimately the market will determine the frequency and length of the signals. The best thing we can do is always place ourselves on the right side of the odds.
One very important thing to note in the second screenshot example. Consider the “playing field” in which signals arise. Prices recently broke above the previous monthly high and subsequently broke above the previous weekly high twice in a row. Look at the candle above the monthly high: solid. Candlestick above weekly high for the first time: Dominant. Second candle above the weekly high: dominant. This market is screaming right now. Context has a huge impact on how individual phagocytic columns are interpreted.
Stack H4 and H1 together in the same direction at the same time. More selective for H1 signals.
Finally, consider a few quotes from a book called Zone Trading.
1. Anything can happen in the market
2. You don’t need to know what’s coming next to succeed
3. For a given advantage, there is a random distribution between wins and losses
4. A margin is defined as an indication that the probability of one thing happening is greater than the probability of another thing happening.
5. Every moment in the market is unique
Thank you.
This thread is open to everyone. One of the benefits of the above four principles is that anyone can quickly learn the mechanics of the system because it is not complicated. This doesn’t mean you’ll succeed quickly. The real work lies in applying the strategy day in and day out and trusting that your strengths will prove themselves over time. But basically this is a freestyle thread. Please feel free to leave comments, thoughts, deals, whatever you want. As long as it's positive, productive and on topic.
I'll post the rules up front and then if there's interest we can discuss how these four principles relate to strategy.
The goal is to stack H1 and H4 positions in the direction of the daily and weekly trends. How is this achieved?
1. Only buy when prices increase that day
2. Only sell if the price drops that day
3. All H4 swallowing bars can be taken away
4. H1 engulfing line is ideal after a pullback, but not required
5. The trigger point is the price difference +1 breakthrough of the engulfing bar.
6. Stop loss 10 pips below previous swing low or engulfing line
7. Move your stop loss to the breakeven point of 1:1RR and keep the minimum 2:1RR. Once you reach a comfortable 2:1 (i.e. 3:1 or 4:1), move your stop to 2:1. Then either continue to chase the rise, or follow the trend of the previous day's closing price or H4 candlestick.
8. Previous monthly, weekly and daily highs/lows will be the only lines used for support/resistance. These lines can also be used for profit targets and directional deviations. For example, it would be prudent not to sell into a market that just broke above the previous week's or monthly high.
9. Each trade in the stack is considered a separate position
From this chart example, you can see that there may have been 5 accumulation signals over the past 2-3 days. All signals trigger above their respective daily open prices and on the next candle. The only exception is signal #3, which I think is more like a 2-bar phagocytosis pattern (the yellow arrow is on the 2nd bar). Prices have also recently broken above previous weekly highs, while also trading above previous daily highs for at least the past three days. Both are excellent signs of further upward bias.
Note the multimeter in the upper right corner. H1 to MN1 are all up relative to their current opening prices. If you have received any or all of these signals, there is absolutely no reason to quit any of them at this time. Quite the opposite. You will seek to accumulate as many effective positions in this direction as possible until the market proves your position wrong.
Below is a more detailed look at the same pair of stacks on the H4 chart. For the sake of illustration, entries and exits are rounded to the nearest 5 points. All signals close on their respective open and trigger on the next bar. There is currently no reason to exit any of these positions.
Not every engulfing bar that matches the daily trend will provide such an accumulation opportunity. Some will be stopped out. Some will be squashed. When you do it right, this is what it should look like. Ultimately the market will determine the frequency and length of the signals. The best thing we can do is always place ourselves on the right side of the odds.
One very important thing to note in the second screenshot example. Consider the “playing field” in which signals arise. Prices recently broke above the previous monthly high and subsequently broke above the previous weekly high twice in a row. Look at the candle above the monthly high: solid. Candlestick above weekly high for the first time: Dominant. Second candle above the weekly high: dominant. This market is screaming right now. Context has a huge impact on how individual phagocytic columns are interpreted.
Stack H4 and H1 together in the same direction at the same time. More selective for H1 signals.
Finally, consider a few quotes from a book called Zone Trading.
1. Anything can happen in the market
2. You don’t need to know what’s coming next to succeed
3. For a given advantage, there is a random distribution between wins and losses
4. A margin is defined as an indication that the probability of one thing happening is greater than the probability of another thing happening.
5. Every moment in the market is unique
Thank you.
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