Matrix trading system
Hello everyone, my name is Jan and i have been currency trader for few years. I thought to share system and trading approach i use to share ideas/entries with fellow traders. Why name Matrix system? Simply becouse matrix could be meaning of structure inside structure, a happening that is on different view also different happening. Trading perspective could always be folded into different layers of different time frames with different views across many, therefore it forms matrix structure.
This system does not use any indicators it is pure PA analysis approach to trading. Principle is to judge market structures-legs all the time to form opinion of buyers or sellers strenght, and define possible next targets and moves/bounces. Suggested is that you always use combo of at least 2 TFs to form up entry. For example for trend entry you use h1+m5, for double supply/demand same. H1 and M5 combo is example, you can use any of other, suggested is that you use at least 2 TF spread for combo. That means for example: h1+m5, h4+m15, m15+m1, etc…
I will not be giving you basics of supply and demand, nor what double bottom means, or head and shoulders. That is considered to be known ahead for trader who wishes to use this system. Porpuse of this system is only to share info that you most likely wont get on other learning sites, or being just part of theory.
If you wish to trade this system, one needs to understand how supply and demand zones work and how you find/plot them. I suggest studying videos on youtube along with other free resources on internet about supply and demand.
For short entry principle is that you want weakness on buying side. This means you want to see lower low for confirmation before entry.
For long entry its oposite, you want to see higher high.
Conceptual presentation(On default first example shows highest quallity signal for entry, as either side has lost defense and is usually followed by stronger drop or rally. Second example is middle quallity signal and third example is lower quallity as price is more likely to go against us/break. This is dependent a lot on situation and quallity of legs as well and more detailed analysis, so this is sorting is more of theoretical in nature):
Lower low/higher high signal:
Screenshot by Lightshot
Strong rejection against trend:
Screenshot by Lightshot
Range rejection, with higher low (for shorts) or lower high (for longs) already formed:
Screenshot by Lightshot
Trends:
Conceptual presentation:
Screenshot by Lightshot
Principle behind higher lows in up trend is that demand is healthy and buyers are willing to defend latest formed demand zones, or sellers are not strong enough to break it trough. Same goes for down trend, but instead of demand zones, its supply that is in focus.
Defining trends trough higher lows and higher highs for up trend, and lower lows and lower highs for down trend is more of theoretical or textbook approach, while for this system we only look for one part of equasion to recognise change. This means for down trend as soon as lows are being lower than previous, we are in down trend no matter what is happening with highs. For up trend, as long as we break previous high we mark trend change into up trend.
trend cancelation:
Screenshot by Lightshot
Screenshot by Lightshot
Screenshot by Lightshot
Screenshot by Lightshot
Legs:
Market structures:
trend shelf:
Screenshot by Lightshot
strong wave selling structure, sharp lows/highs:
Screenshot by Lightshot
Control:
Bottoming and topping processes:
Screenshot by Lightshot
How to read and expect bottoming or topping to do its job, and when to expect PA to go further with previou dirrection:
Supply and demand zones:
For plotting of demand and supply zones there are many different methods and reasonings how to do it, the important point to remember is there is no need to overcomplicate on ploting of such zones. You can use either last bull candle that was engulfed in drop afterwards for supply, and oposite for demand, or use wicks of candles to plot zones, or just use conceptually ploted zones near highs and lows in certain width.
Screenshot by Lightshot
Double supply/ demand entry:
For double supply/demand entry it is not required to enter along trend, as long as you are using strong (solid rally/dump) zones for entry scout on higher tf. If you are going along trend it is okay to use weaker zones for entry aswell (for example on down trend, looking on all supply zones).
Conceptual approach:
Example 1:
m15
m1
Example 2:
m15
m1
Screenshot by Lightshot
Example 3:
m15
m1
Example 4:
m15
m1
Example 5:
h1
m5
Example 6:
h1
m5
Example 7:
h1
Screenshot by Lightshot
m5
All presentations are in lightshoot screens instead of pictures attached due to limit of attachments per page, i might put it in PDF later.
Additionally to add if you are trading m1 and m5 TF with this system you need to follow strong impact news, becouse supply and demand on lower TFs will get distorted with them. If there are strong impact news do not place any entries before news move. If you are trading m15 or higher you can dissmiss most of the news, with exception of strong CB news every few months.
If you are posting call it is good if you also note what kind of entry it is, either double supply/demand, bottoming-topping attempt or simply trend entry. Its not a must but it would help newbies to grasp the reason for entry.
Green pips!