Trading with Praised Prominent Zones (PPZ)

Complimented protruding area (PPZ thread)

Hello traders,

I decided to start my own thread to talk about charts and markets with all the good people...sharing, interacting, learning and humbly coaching/educating. I won't cover a specific system, but I will demonstrate a comprehensive yet simple way to watch the currency markets for high-probability setups.
(This post should more or less be under the interactive trading section, but since I don't have the lowest 4V posted in this section, hopefully it will be moved)

About Me.. Please see my profile if you think it is necessary.

Let me talk about my trading views. I should start by saying that versatility is crucial for traders as we deal with ever-changing circumstances. I don't believe that a successful trader can be a pony show. This makes me a believer in a non-"only/narrow" system. However, the core of my trading style is based on common philosophies rather than being rigid and all-encompassing. I would describe my style as a significant zone hunter...no matter when and where such meaningful levels/areas need to be discerned. I call these areas "Praised Salient Zones" (PPZ) , hence the thread name chosen. My long-term trading style is basically twisted around this mindset. Well, why the praise and prominence? .. Well, first of all, I have to observe something in the chart that catches my attention, starting with anything, which may lead to praising it on the way.. could be strong swings, impulsive moves, consolidation/reversal breakout patterns, etc. and that by itself does not add up to much in most cases or sometimes.. so it must also meet the significance level to make it a highlighted area. So, as has been said, first I have to have something eye-catching, which will be my "compliment", and then see if it covers an important level/area, which will be my "standout". Combinations of two explicit intensities as well as one without other intensities showed higher degrees of uncertainty. As a chart watcher, we can find many areas to praise and observe that a few areas stand out. A highlighted area by itself won't do the trick either, unless there's something commendable going on in that area! ! ..that last statement may catch you off guard, but in my experience it is a true fact and as the thread ages you will see my point on this. All in all, in order to become elite and consistent, the connection of the two introduced elements will bring about the ultimate lasting profitability in one's career.
I know this approach is nothing new to any seasoned trader, but at the same time, I know it is sometimes easy for even the best traders to overlook it. Entering trades from high probability areas more frequently will bring many benefits to traders. So amplifying it as a group of people in a corner can only do one good thing for all of us, which is probably the main goal of this article.

PZ definition..
Compliments Area: Eye-catching. The small fiber map will clearly define the area, 38.2% to 61.8%
Highlight Area: A significant level established by multiple reactions in the past, aka touch/bounce. The 20-30 point horizontal box plot defines this area.

Technically speaking.. there are a number of tools and techniques that each trader can use to measure these areas differently. I'll use anything that can prove I have enough clues to discover the PPZ settings. At the same time, when I choose what I want to see on a chart, I don't rush it, but rather take it as a clue to put it under my radar...and then build my trade setup around it to get the precise trigger point for entry. (will be explained in the next few paragraphs)

OK, let's get started...

Set up technology. . I use a combination of PA mode, TL and Fib levels to find my PPZ or PZ settings. So you'll often see the Fib level on my charts, but it's not the only target for setting up your assessment. In fact, it serves more of a horizontal definition and retrace measurement purpose. I plot TL to simply define the mid- and long-term overall PA direction. Basically, the core of what I do is that I look for at least the middle trend and pull the trigger on pullbacks with last minute tweaks.
So the main tools are not sexy but very effective like.. PA Pattern.. Fib Levels.. Trend Lines (TL)..
Long Term TL.. Orange Mid Term TL.. Gray

Details..I trade 1 hour tf and mainly analyze from the same tf and above. So that brings me and this thread to a swing/mid-term trading style. I look for a risk/reward potential of at least 1:2. Stop Loss: Set below/above the latest HH/LL (average around 45 pips). Profit taking: twice the risk and not less than 80 pips. I trade using PPZ and PZ settings.. everything depends on the market conditions that I adjust and adapt to. I monitor 6 major currency pairs. (eu-ej-gu-au-cu-cj)

Last minute confirmation.. After PPZ is re-established and Fib clearly defines the levels.. we need the next two confirmations.. 1) The first bold candle reverting back inside the Fib level and closing above it will mark the entry point.. 2) The distance between entries into SL (beyond HL/LH) will define the risk total. Setups must have at least 1:1 RR potential to qualify. (Measurement is from entry point to fib 0.0 line.)

Order placement.. Entry & Stop Loss: Hourly high/low closing candle + 3 pip buffer + spread.

Trade management (exit).. is selective and too broad to be restricted. However, for the sake of the thread, I have firmly set my take profit at 2x risk or greater than 80 pips. Experienced traders can and will obviously get crafty, which can obviously lead to mixed results. I personally can and do get crafty, but for the most part I keep the solid structure specified above. My advice is..reset..set your orders (trigger points, sl, tp) and let it be..in other words "stay away from the barrel".

Statistics.. this is just to give you an idea, so don't make me suffer for it. Between the six majors, you average about 60-70 hits per quarter (about 10-12 per pair), and depending on your PPZ skill the win rate can be as high as 70%+ (which is the main purpose of this thread, to improve your skills in this field).. But don't worry, if you only hit half the time, you will still make a decent profit, as the RR is 1:2.. A dismal 35% will leave you break even.. 60% Reaching your gold level..it just takes patience and diligence. The average loss is about 45 pips and the minimum profit is about 80 pips. Long-term trading styles are best recorded on a quarterly basis (if not annually).

MM..it depends on your experience, confidence and agenda. I recommend that you risk no more than 5% per trade, 2-3% is more appropriate. For example, if you are not overtrading, bet half a lot on a 10k account to be conservative. I also recommend using a fixed quarterly lot size from the beginning to the end of the period.

To summarize:
This depends on how connected the two PZs are. That is, praise areas to highlight areas in order to have reliable high-probability PPZ setups. The setting of a separate praise area can only be carried out when there is a solid and strong trend support.

What do you expect from me and other active contributors? More action than words. Chart explanations of before and after thoughts/opinions..overall and daily sentiment for each pair and last but not least forwards live trades. (Live trading is optional for contributors and general comfort with everything else)
BTW, I also have a fully visualized live browser account linked to this thread, which provides personal benefit for the public benefit of account preservation and witnessing actual trading demonstrations, etc.

Well, now..your experiences, thoughts, input, feedback, emotions, overall sharing, are highly encouraged and welcomed. Your activity will make this thread a great place to interact with each other.

Of course I know I'm not the only one nor the first to talk about this issue in FF. I'm humbled and honored to be another contributor and will continue to work on it as long as I see interest.

I have a set of hard and fast rules.. respect your trading partners no matter what . thanks in advance

Well..let the journey begin with lots of interesting people.

greeting,
Michael P

Disclaimer.. Market trading, especially Forex trading, is risky.. Everything said and done in this post is intended as advice and recommendations only, and any loss or damage resulting from it is entirely at your own risk and responsibility, nor is the OP or any active contributors responsible. Thanks

For clarity, I've attached 3 pictures of charts to start with.