Tarwada Method (My Only Manual Trading S)

tawadafa

Hello everyone

First, I rarely trade manually. Almost over 95% of my trades are automated using my own EA (which I will share later)

But what about the remaining 5%? How should I place it?

Okay, let's get started. But first, there are three things you must consider when trading:

#1: Shift from accuracy to risk-reward

Look, I know it feels good to be right. I also like being the right person. But it’s not something that will make you money. Very few profitable traders make money through extremely accurate trades. The most common ones are small losers and big winners.

The good thing is, if you can do this, you don't even have to be that accurate to make a lot of money!

How good is that? It makes life much easier and trading becomes a lot less stressful.

Therefore, don't enter any trade where the reward-to-risk ratio is not at least 2 to 1, preferably 3 to 1 or higher, and watch the results improve. (learn more)

#2: Bring your stops to life

Many traders use a fixed size stop and never change it. Unfortunately, this is what most trading educators teach you to do.

But it's not optimal.

Conversely, when market volatility expands, you should expand your stop loss range, and when market volatility contracts, you should narrow your stop loss range. This way, you won't be cheated and suffer losses when volatility is higher, and you won't suffer unnecessarily larger losses when volatility is lower.

Also, set your stop loss at a point where your trading idea will expire.

Sometimes this means placing it above a certain support or resistance level, and other times this means placing it below or above a wider range of price lines. Either way, its size is not the same every time but changes dynamically based on market behavior.

This way you let the market tell you where to place your stop loss, which will improve your accuracy and help you avoid getting chopped off - which can be very annoying. (learn more)

#3: Watch the volume

Most traders don't know this, but trading volume is directly related to volatility. If trading volume is high on a given day, the market is more likely to see large directional moves. If the transaction volume is smaller, it is more likely to be restricted in a smaller range.

By watching the trading volume throughout the day, you can quickly understand whether you should follow the move (i.e. follow a large move in price) or fade out of it because it may reverse.

If you didn't know what volume was going to be like that day, you might do the exact opposite. In fact, most traders do this, and understanding the volume/volatility dynamics of the market is what the pros do best. (Read more about volume/volatility here & here)

In summary. Most of the time you have no reason to fail

Now let's talk strategy.

Time frame: D1 and H4 only!

Right: All pairs. When I say ALL, I mean it (even exotic/metallic/bitcoin...etc)

index:
RSI(21)
Smoothed moving average applied to RSI window(5)
MACD has default filter settings (optional)

Apply a smoothed moving average to the RSI window:
Drag and drop the Moving Average indicator onto the RSI window and change "Apply" to "Close Price" to "Data from Previous Indicator"

Entry rules:

Actively enter:
Buy when RSI breaks above SMMA Sell when RSI is below SMMA



Filter items:
Buy when RSI crosses SMMA + MACD histogram above zero Sell when RSI crosses SMMA + MACD histogram below zero



Exit/stop rules:

Okay, this is dynamic. It depends on the currency pair you are trading

To know your optimal profit target, apply the template and see the average number of pips after each crossover. The safest way is to exit after 1 candle close (for daily timeframe) or when you have gained at least 50 pips (500 pips for 5-digit brokers) to set breakeven and let the profits run.

Set stop loss above/below previous candle high/low (for daily timeframe)

Download the template and apply it to the GBP/JPY D1 time frame to see more explanations of entry examples

Notice:
The reason for using H4 and D1 time frames in such high volatility currency pairs is that even with unfiltered signals, this strategy almost guarantees +90% that you will get at least 50 pips in your favor after every crossover. But anyway... you can use whatever you like.

So it’s a bit difficult to take losses with this strategy

chart view



Stay green and trade stress-free

-Tawada