Trading under the microscope - MT4/MT5 resources
greeting.
I'm here to post a trading system of mine.
Those willing to participate in this strategy are welcome as the system is very flexible. No (no hard and fast rules), this is more of a guide that you can use in addition to any trading methods you may already have.
I tested many complex trading systems, wrote profitable EAs that turned out to have huge drawdowns or only worked in certain market conditions, such as trending/range markets, and I came to the conclusion that there are many different ways to trade and make profits.
The key to successful trading (in my opinion) is finding a system that suits your personality, lifestyle, risk tolerance and fairness. IMHO, it is very important to consider these things before starting to trade.
Anyway, that's it.
under microscope
The first thing you must do is decide which currency pairs you want to trade. For me, I follow all 28 major Forex pairs. However, I'm sure this can be applied to any instrument, as the strategy is primarily based on simple entries of supply and demand, volume, and market structure.
The second thing to do after deciding which currency pairs you want to trade is to start with DAILY TF. You can probably go as low as H4 or as high as weekly, but for my life, I like to use daily TF because I only have to check the chart once a day. So for me, the first thing I do every day is analyze all 28 currency pairs to see if any of them fit a possible trading opportunity.
Some things to watch for on your higher TFs are volume, or lack of volume if looking for a reversal. This is a bit hard to explain so I'll post some examples of my trades. A simple way to do this is to look at the SR areas on the daily chart and identify areas where the market is likely to reverse or continue the current trend. An easy pattern to remember is when you see a daily bar engulfing the previous day's high/low, especially after a big move, sustained move, or in SR territory.
Here's an example of USD/CHF that I put on my watch list yesterday, which I did.
Daily chart USD/CHF
As you can see in the photo above, the price here is clearly bouncing off support within a range. The pair has been trending downward for some time and is now hovering above the daily TF. There are many things I would consider before choosing a trading pair, but the clear things here are:
The bounce off the support area, the bullish engulfing bar indicates volume, and the Fed's rate decision is neutral (1.75%), which suggests to me that the reason behind the move is that the price doesn't want to fall any further. I use a lot of blending in my analysis, but you can make it as simple as technical, but I do like to incorporate major news events (such as interest rates) into my decisions to get as many blends as possible.
Now you may be wondering why I call this strategy a microscope, it's because we start with a higher TF and then slowly lower it to check all the lower timeframes in order to get more convergence for our trades. I won't go into too many details, but for this trade, H4 H1 also looks like a good buy, such as an upward breakout structure, more engulfing candles, etc. Hope you understand this.
I then use the H1 or 15 minute chart for my entries and stops. Below is an example of this trade where I set my stop loss and entry based on the lowest time frame I saw.
15M Chart USD/CHF
Now here you can see microscopy methods in action. Once you get to the lower TF, that's where the fun begins. You can now incorporate any input rules you like. Because I already have a buying bias from the higher TF analysis. What I have to do now is find an entry point. I like to enter on volume, this skill may take some time to develop for some people and maybe you may want to use a different entry style, but for me I like to enter this way as it usually makes my trades more profitable faster. I entered here because of a small uptrend on the 15 minute chart. Prices are slowly climbing and I expect further gains after breaking out of the daily high. I placed my stop loss reasonably around 30 pips below the day's low. I don't look for any specific RR, but once a trade reaches 1:1 I start managing it. If I wanted to move to BE, I would, if I wanted to cut the position by 50% and make it work, I would. If I just want to take profits, I will. It all depends a lot on price movements and what the market tells me, and I may also profit because I see better opportunities and feel they are a better use of my equity.
Ultimately, the key is to achieve the highest win rate possible. If you are very careful and use confluences as much as possible and then only enter when you think it is 100% the best entry, you should be able to win more often. The key is to try to win every deal. Many people say it's all about your win percentage and win rate, which is where positive expectations really matter. However, the problem with thinking this way is that some traders may enter a trade knowing that they may lose money, blindly following the rules of the strategy without developing a good rationale for the trade. Focus on winning every trade you take, and when you fail, try to understand why you failed. There is always a reason. The market is not random. You may lose trades due to the following reasons:
1. Your stop loss is too tight and doesn’t give your trade enough breathing room.
2. Your stop loss is too big and you don’t take profit early enough.
3. Your analysis is flawed. Maybe you entered the market too early or did not follow the rules correctly.
Try to figure out the reasons for losing and the reasons for winning to increase your winning rate. Choose the best deal. Don't be greedy and accept every setting just because it looks good on Daily TF. Of all the potential trades I made on Monday, I only made 2 USDCHF buys and CHFJPY buys. Please note how I specifically enter into these trades to hedge my risk. They are both great setups and both include Swiss Francs, one each for the buyer and seller. I did this on purpose. Don't do 5 different euro sells on different currency pairs. Be smart, be patient, and choose the best settings every day.
I'm here to post a trading system of mine.
Those willing to participate in this strategy are welcome as the system is very flexible. No (no hard and fast rules), this is more of a guide that you can use in addition to any trading methods you may already have.
I tested many complex trading systems, wrote profitable EAs that turned out to have huge drawdowns or only worked in certain market conditions, such as trending/range markets, and I came to the conclusion that there are many different ways to trade and make profits.
The key to successful trading (in my opinion) is finding a system that suits your personality, lifestyle, risk tolerance and fairness. IMHO, it is very important to consider these things before starting to trade.
Anyway, that's it.
under microscope
The first thing you must do is decide which currency pairs you want to trade. For me, I follow all 28 major Forex pairs. However, I'm sure this can be applied to any instrument, as the strategy is primarily based on simple entries of supply and demand, volume, and market structure.
The second thing to do after deciding which currency pairs you want to trade is to start with DAILY TF. You can probably go as low as H4 or as high as weekly, but for my life, I like to use daily TF because I only have to check the chart once a day. So for me, the first thing I do every day is analyze all 28 currency pairs to see if any of them fit a possible trading opportunity.
Some things to watch for on your higher TFs are volume, or lack of volume if looking for a reversal. This is a bit hard to explain so I'll post some examples of my trades. A simple way to do this is to look at the SR areas on the daily chart and identify areas where the market is likely to reverse or continue the current trend. An easy pattern to remember is when you see a daily bar engulfing the previous day's high/low, especially after a big move, sustained move, or in SR territory.
Here's an example of USD/CHF that I put on my watch list yesterday, which I did.
Daily chart USD/CHF
As you can see in the photo above, the price here is clearly bouncing off support within a range. The pair has been trending downward for some time and is now hovering above the daily TF. There are many things I would consider before choosing a trading pair, but the clear things here are:
The bounce off the support area, the bullish engulfing bar indicates volume, and the Fed's rate decision is neutral (1.75%), which suggests to me that the reason behind the move is that the price doesn't want to fall any further. I use a lot of blending in my analysis, but you can make it as simple as technical, but I do like to incorporate major news events (such as interest rates) into my decisions to get as many blends as possible.
Now you may be wondering why I call this strategy a microscope, it's because we start with a higher TF and then slowly lower it to check all the lower timeframes in order to get more convergence for our trades. I won't go into too many details, but for this trade, H4 H1 also looks like a good buy, such as an upward breakout structure, more engulfing candles, etc. Hope you understand this.
I then use the H1 or 15 minute chart for my entries and stops. Below is an example of this trade where I set my stop loss and entry based on the lowest time frame I saw.
15M Chart USD/CHF
Now here you can see microscopy methods in action. Once you get to the lower TF, that's where the fun begins. You can now incorporate any input rules you like. Because I already have a buying bias from the higher TF analysis. What I have to do now is find an entry point. I like to enter on volume, this skill may take some time to develop for some people and maybe you may want to use a different entry style, but for me I like to enter this way as it usually makes my trades more profitable faster. I entered here because of a small uptrend on the 15 minute chart. Prices are slowly climbing and I expect further gains after breaking out of the daily high. I placed my stop loss reasonably around 30 pips below the day's low. I don't look for any specific RR, but once a trade reaches 1:1 I start managing it. If I wanted to move to BE, I would, if I wanted to cut the position by 50% and make it work, I would. If I just want to take profits, I will. It all depends a lot on price movements and what the market tells me, and I may also profit because I see better opportunities and feel they are a better use of my equity.
Ultimately, the key is to achieve the highest win rate possible. If you are very careful and use confluences as much as possible and then only enter when you think it is 100% the best entry, you should be able to win more often. The key is to try to win every deal. Many people say it's all about your win percentage and win rate, which is where positive expectations really matter. However, the problem with thinking this way is that some traders may enter a trade knowing that they may lose money, blindly following the rules of the strategy without developing a good rationale for the trade. Focus on winning every trade you take, and when you fail, try to understand why you failed. There is always a reason. The market is not random. You may lose trades due to the following reasons:
1. Your stop loss is too tight and doesn’t give your trade enough breathing room.
2. Your stop loss is too big and you don’t take profit early enough.
3. Your analysis is flawed. Maybe you entered the market too early or did not follow the rules correctly.
Try to figure out the reasons for losing and the reasons for winning to increase your winning rate. Choose the best deal. Don't be greedy and accept every setting just because it looks good on Daily TF. Of all the potential trades I made on Monday, I only made 2 USDCHF buys and CHFJPY buys. Please note how I specifically enter into these trades to hedge my risk. They are both great setups and both include Swiss Francs, one each for the buyer and seller. I did this on purpose. Don't do 5 different euro sells on different currency pairs. Be smart, be patient, and choose the best settings every day.
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