Comprehensive Trading System/Methodology

[bbmac]

Would like to check as I see in your post #248 that potential SBR is at 1.4975 to 1.5010

Why is it that you did not enter at that area circled?

Thanks

The reason is the entry trigger...remember the entry trigger to any set-up is the individual price action (candlestick )on the trigger time frame (at one of the tech indicator based patterns.) The area you circle could not really be called a reversal candle whereas my point of entry was at a 'real' reversal candle. Also in this particular example there was no hidden divergence in macd at the candle you highlight.

 

[bbmac]

BB,still dont really understand on the re entry setup. On the Bols... Should I wait till the 20 flip with the 10 or just when price touches the 10 or not even touching the 10 ... Don't really understand how Bols play a part in this way as it seems it can start a re entry setup at any point of time whether the Bols flip or not

Just to recap, there are 4 hidden divergence based Re-entry [to trend) set-ups that can occur after a retrace/pullback in price, as you know.

a. The Re-entry type 3 involves no bols (nearest is 10bol)
b. The Re-entry type 4 involves price only being involved with the 10bol
c. The Re-entry types 1 and 2 involve a 2bol flip (20bol coming inside 10bol) ...the difference between the Re-ent 1 & 2 being that at the time of the 2bol flip on the Re-ent 2 only osma is showing hidden div, so await the macd showing hidden div too at which point the 2bol flip should still be intact but the osma will now be showing effective regular immediate same peak/valley divergence from the original hidden divergence reading-This is the Re-ent 2.

Ok, so what you should wait for is a set-up at pre-identified potential sbr/rbs on next t/f up from the set-up into whose trend (+) you are seeking a high probability entry after a pullback...(buy the dips, sell the rallies.)

Any of the Re-entry set-ups can appear, first might be a Re-ent 3 or 4, but if that is not at the pre-ident potential sbr/rbs then stand aside, as price could continue retracing to the pre-identified potential sbr/rbs zone (if one exists) at which point a Re-ent 1 or 2 could develop.

A Re-ent 3 is rarer than the other types of Re-entry set-up and tends to be in fast moving trends after shallow pullbacks, like after a data release that moves the market. the most common are the Re-ent types 1,2, and 4.

Typically you will see a Re-ent 4 develop but if that is not at a potential sbr/rbs zone you have identified, see if price retraces further to either stay as a Re-ent 4 or develop into a Re-ent 1 or 2, at the pre-identified potential sbr/rbs.

Just always ensure that you act on a Re-entry set-up only at pre-identified potential sbr/rbs zone, as described above. it is this confluence of the band deviation and hidden divergence with potential sbr/rbs and the price action trigger that ensures a high probability trading opportunity. (Ensuring of course that there is at least a trend on the next t/f up, and that the macd hists are good per the system/methodology.)

Hope this is clear.

G/L

 

[babymush]

Hi

Thank you for all your advise.

I was thinking about my whole system and here is my plan. Please feel free to comment and correct anything.

I have currently a capital of USD 1300 in my trading account. Small but what I am prepared to risk currently.

Max Loss Per Trade: 3% of trading capital which will be at USD 39 per trade.
That will translate into 39 pips as I am trading on a mini account

So my stop loss will be at 39 pips for 1 lot traded and 20 pips for 2 lots traded

Aim: 10% growth in account every month
Equates to: USD 130 per month or 130 pips per month

Working days per month: 20 working days

Assuming I can make 10 working days profitable with the other 10 breakeven from all the losses and profit:

I would need 130 pips / 10 working days = 13 pips per day of profit which is my daily target

With a 10% growth: I should double my account size in 7 months or so.

Is there anything that I missed out in my trading plan?

Please feel free to comment anyone if I made some ridiculous assumptions

Thank you and have a great day.

 

[babymush]

The reason is the entry trigger...remember the entry trigger to any set-up is the individual price action (candlestick )on the trigger time frame (at one of the tech indicator based patterns.) The area you circle could not really be called a reversal candle whereas my point of entry was at a 'real' reversal candle. Also in this particular example there was no hidden divergence in macd at the candle you highlight.

Thanks for explaining. Could I get you to list out a few of your more popular Reversal candles as that is something that you have never gone into.

Thank you

 

[bbmac]

Hi

a. I have currently a capital of USD 1300 in my trading account. Small but what I am prepared to risk currently.
b. Max Loss Per Trade: 3% of trading capital which will be at USD 39 per trade.
That will translate into 39 pips as I am trading on a mini account
So my stop loss will be at 39 pips for 1 lot traded and 20 pips for 2 lots traded
c. Aim: 10% growth in account every month
Equates to: USD 130 per month or 130 pips per month
d. Working days per month: 20 working days
e. Assuming I can make 10 working days profitable with the other 10 breakeven from all the losses and profit:
I would need 130 pips / 10 working days = 13 pips per day of profit which is my daily target
With a 10% growth: I should double my account size in 7 months or so.

f. Is there anything that I missed out in my trading plan?

Hi I have broken your plan down into bulletpoints, labelled a,b,c etc...and will comment below;

a. Good idea to set an amout that you are comfortable putting at risk....the start of a good plan.
b. I personally risk only 1.3% / trade max, but given my high strike rate I could risk more I guess. Given your limited capital I understand your desire to grow the account, But I am thinking 2% max/trade risk given your limited experience is probably more sensible.

I tend to designate a volume traded that will leave me the same risk of 1.3% max but give me a wider stiop if needed, ie

max vol @ 1.3% risk/trade = 13stop
3/4vol @ 1.3% risk/trade = 17stop
1/2vol @ 1.3% risk/trade = 26stop.

Consequently most trades I make are 1/2 - 3/4 of the maximum volume available for a13stop @ 1.3% risk. (Reversal Extremes being the set-up that I favour for max vol @ 1.3%risk=13stop.)

I appreciate though that using mini lots at this a/c size, the above is difficult to impliment, and you will have to make some comprimises.

c. Given where you are in respect of experience that is a robust target but given your use of this high probability trading system/methodology, and what you have learned already, sticking to the rules/guidelines, being partient, and disciplined, awaiting the best set-ups @ pre-identified potential supp/res/sbr/rbs (confluence, confluence,confluence) I am hopeful you can achieve it.

d. Fair assumtion, but given holidays, bank holidays and illness, I tend to see it now as 200trading days/year which averages at 16.33/mth.

e. Yeh, assuming you stick to your plan outlined above, a 10pip gain will equate to a circa +1% gain on account... so a good way to look at it.

f. I don't think there is anything you have missed, bar setting yourself a max amount of time to be at screens during each trading session,An example may be after say 3/4hr start up/getting in the zone, time [updating all potential supp/res/sbr/rbs re prev sw hi/lo's on trend and intermediate t/f and fibs, t/lines ..checking what data is due out..checking y/days daily candle, noting asian session hi/lo, noting y/days hi/lo etc...] then 5rs trading session

Other advice

i. Keep a log of each trade made and why you went in, ie the justification.
ii. Review the log at trading session end.
iii. Stick to your plan, stay disciplined, don't chase the market, a set-up[ wilol develop at some point, just have patience
iv. Be aware if a trend is developing on the intermediate and trend t/f's, be looking to find the set-ups after a pullback @ potential sbr/rbs to get involved with trend direction.

Be looking at the intermediate and trend t/f candlesticks, what are they telling you about

1. Whether to stay in a trade
2. What the momentum is in any move/trend.

v. Remember that the stronger the trend , the more confluence (of set-ups) and pot supp/res you should seek to trade a pullback.
vi Read widely.


Good Luck with it.

 

[bbmac]

Thanks for explaining. Could I get you to list out a few of your more popular Reversal candles as that is something that you have never gone into.

Thank you

Plenty of free resources on the internet in respect of Reversal candles, google them for more...briefly though, typical examples of reversal candles include;

a. Doji (strictly a candle that implies indecision)
b. Hanging man
c. Inverted hammer
d. Evenening star
e. Morning star
f. Pin bar
g. Inside bar/Harami
h. Inverted hammer
i. gravestone doji
j. Bearish engulfing
k. Bullish engulfing

G/L

 

[babymush]

Would like to check too. I got 50 pips today from 2 trades. 1 - 20 pips profit and the other 30 pips profit.

If my target is at 13 pips per day, would you continue trading and if so, is there any change in strategy of stop loss or take profit? Or would it be as normal?

 

[bbmac]

Would like to check too. I got 50 pips today from 2 trades. 1 - 20 pips profit and the other 30 pips profit.

If my target is at 13 pips per day, would you continue trading and if so, is there any change in strategy of stop loss or take profit? Or would it be as normal?

Wow, well done!! Re your question, you know it doesn't matter when you take the next trade it still has to be taken...it's purely a personal choice, stop @ a target or carry on till your time limited trading session ends.

I wouldn't say that taking 2 trades in a day is over-trading using this system/methodology on the 1/5/ 30min [trigger/intermediate/trend t/f's.] Beware the ' Joe Trader ' syndrome though, ie where you start thinking it's easy and get involved in trades you have no business being in, resulting in giving all gains back.

As for stops/targets they don't change.

 

[babymush]

Thank you. I will remember that and only take trades at potential SBR or RBS or Resistance or Support zones and not rush it. Will have to learn to sit on my hands sometimes too and watch the trade play out.

 

[babymush]

Now waiting for a potential Reversal signal to play out

Support level @ 1.4690 to 1.4681

Waiting to see if a Reversal signal appears on the 5 mins and narrow down to the 1 min

 

[bbmac]

Now waiting for a potential Reversal signal to play out

Support level @ 1.4690 to 1.4681

Waiting to see if a Reversal signal appears on the 5 mins and narrow down to the 1 min

Yeh can see that potential support zone=previous minor swing lo=potential support...Nothing else in terms of the other potential supp/res factors there to add any confluence, but the area has been tested a few times as the 4hr chart shows, see below;

Nice 1624pm gmt 1min Rev A at top of the zone....has seen +30+ pips at time of writing.

 

[bbmac]

This was the 1hr pot supp zone [=prev sw lo=pot support] Not much in way of a 5min main chart supporting set-up but reg immed bullish div on that t/f, 1 and 5min small charts offered some supporting conditions though.

 

[bbmac]

Final example of the year.

Final example of the year, Today 0842am gmt, the 1min trigger Reversal Extreme set-up, no real 5min main chart supporting set-up but 1/5min small charts confirming conditions (ie o/b) and 15min Rev A ii seq set-up to support. Bearish divergence in the 30min oscillators also @ the pot res zone on 1hr shown belo that included a fib.

The 15min Rev Aii seq supporting set-up is shown below:

The 1hr pot sbr/res zone that included the 23.6% fib of the 5613-4683 fall is shown below;

 

[babymush]

Cannot seem to find any good Support or Resistance today ... it seems to be hovering sideways in a Support/Resistance zone ... what is your take

 

[bbmac]

Cannot seem to find any good Support or Resistance today ... it seems to be hovering sideways in a Support/Resistance zone ... what is your take

Sorry am away from office since yesterday so no access to charts, can't therefore offer any comment, and in any event it would be retospecvtive now.

 

[tradias]

Wow bbmac, You are one dedicated individual to work on a methodology so diligently and then publish those . how many markets do you follow and trade with real money??

 

[bbmac]

How many markets do you follow and trade with real money??

My preference is to trade the muliple set-ups this system/methodology indicates on one instrument, gbpusd -spot forex pairing, (yes with real money.) Some opt to trade preferred set-ups over more than one/multi instruments, such as the Re-entry (to trend) set-ups that can present themselves at pre-identified potential sbr/rbs zones after a pullback.

It's a personal preference reallly. Whatever you do though, Support/Resistance and Price Action (overall and individual) analysis can form the basis of any sound technical tactical trading approach to a market. The indicator use is again personal prefence and certainly on a lower time frame trigger like 1min it may be useful to identify repeatable high probability patterns at which you can seek an individual price action trigger.

G/L

 

[babymush]

Hi BB

Just wanted to check something on your support and resistance.

I understand that you use a A4 piece of paper in 4 different columns to put your support and resistance.

Would it be better if we plot it on a chart with horizontal lines?

2nd) Would it be necessary to plot the 5 mins Support and resistance as they will be repeated in the 1 hours support and resistance plotting too?

Thank you

 

[bbmac]

Hi BB

Just wanted to check something on your support and resistance.

I understand that you use a A4 piece of paper in 4 different columns to put your support and resistance.

Would it be better if we plot it on a chart with horizontal lines?

2nd) Would it be necessary to plot the 5 mins Support and resistance as they will be repeated in the 1 hours support and resistance plotting too?

Thank you

Hi

Dealing with your points in order

a. My starting point for pre-determining potential supp/res/sbr/rbs on the trend t/f chart (1hr if using the 30min as trend t/f) is to identify the previous swing hi/lo zones on the trend t/f by way of plotting horizontal lines on a chart as you suggest. I then make a manual note of any of these zones that are likely to occur within the average pip range noting too any of the other main potential supp/res/sbr/rbs factors (bids/offers, fibs, t/lines) that occur within the zones as well as any of the minor potential supp/res/sbr/rbs factors (Pivots) in the zones.

b. I tend to use the crosshair tool on the 5min chart to guage this intermediate chart's potential supp/res/sbr/rbs zones and of course where they co-exist in/with a trend t/f zone so much the better.

This is the way that my own method for pre-identifying potential supp/res/sbr/rbs has evolved as I have become more proficient, ...yours may be different, and may indeed involve the 4 column approach that is outlined in this trading system/methodology, and to which you referred,...reading across the colums to see where the most potential supp/res confluence lies. [This 4 column mapping approach to potential supp/res/sbr/rbs is outlined in the douments attached to this thread that occur on Page 1, Post 1. This approach is re-visted in the Part I Doc that can be found on Page 10, Post 74 of this thread ...these Parts I, II and III docs being briefer summaries of the docs that are attached to Page 1, Post 1 ]

 

[bbmac]

Hi BB

Just wanted to check something on your support and resistance.

I understand that you use a A4 piece of paper in 4 different columns to put your support and resistance.

Would it be better if we plot it on a chart with horizontal lines?

2nd) Would it be necessary to plot the 5 mins Support and resistance as they will be repeated in the 1 hours support and resistance plotting too?

Thank you

The way I choose to lay out my trading set-up is 6 screens, reading left to right...

Screen 6...30min/1hr main charts, minimised newsfeed on sound alart
Screen 5...Fibs
Screen 4...1hr potential supp/res/sbr/rbs zones (horizontal lines plotted, as well as T/lines,) Dealing platform (minimised until in a trade) Dealing ticket always on show.
Screen 3...1min Main chart
Screen 2...5min Main chart
Screen 1...15min Main chart

2 of the 6 screens (Screens 5 and 4)are therefore effectively dedicated to 3 out of the 4 main potential supp/res factors (Previous swing hi/lo zones, fibs, t/lines.)

The 1min main chart contains the Daily pivots, the 5min containing the Weekly and the 15min the Monthly, these pivots being minor potential supp/res/sbr/rbs factors. The touted bids/offers are obtained by sound alert from the newsfeed/rss.