COMMON PROCEDURES AT ALL LEVELS
The purpose of these definitions and statements here is so that I do not have to repeat them in all the levels later. The operations here are explained in detail. Later I will simply use their names when referring to them so as to keep things simple.
Definition : Amount.
An amount depicts any number of lots together with any leverage.
For example 2 standard lots can be an amount.
Or 5 minilots can be an amount.
The amount is at the choice of the trader.
Definition : PCI stop loss.
Power, computer, internet.
This stop loss will be used and its intention is to prevent a margin call if there is a failure in the power supply, a computer failure or internet dropout.
The PCI stop loss is set using the standard order window and is generally set moments before entering a trade.
Definition : Floating profit/loss.
This window should be visible at all times on your charting screen.
It will be used extensively to open and especially close trades rather than set a new stop loss order which takes too long to do in a fast moving market.
Definition : Direct Deal Ticket. (DDT).
Hereafter referred to as DDT.
The name will vary with the broker you use but this is the fastest way of entering or exiting the trade.
It is a direct market order and places or closes an order immediately.
It will be the only means we use to enter or exit the price action.
Definition : Break Even.
This is the clever act of preventing trades from becoming losers.
The Break-Even involves moving the stop loss or trade closure to the trade entry point.
The worst that can happen now, is a price retrace to this point, giving a profit/loss of zero.
The Break-Even act can be done in two ways :
1)
The preferred way which is to watch the floating profit/loss window.
If this hits zero, we immediately close the trade using the Direct Deal ticket. (DDT).
No walking away from the computer.
2) Moving the stop loss to Break Even, that is, move the stop loss to the trade entry point.
Walking away from the computer is possible.
Definition : Multiple Amount trade.
This strategy is used at the Basic level and is replaced by the Starc bands at the Advanced level.
It opens the trade with two amounts instead of just one.
If we just trade 1 amount then the number of losing trades is likely to exceed the number of winners. In that case we are just wasting time and making a loss.
The 2 amounts strategy works as follows :
1) Firstly, we get one small profit from the 1st amount.
2) The stop loss or trade closure is now moved to the trade entry point. (Break Even).
The 2nd amount has a much larger profit target, but at worst, it would retrace to the trade entry point, giving a profit/loss of zero for this amount.
3) Therefore, at worst, we have the 1st amount profit only, but this is superior to a loss.
Using this approach gives us more winning trades, hence a winning edge, just like the visual ballistic player in roulette.
Definition : Starc Band Retrace Point.
This refers to the Starc bands and the diagram concerning them below.
The Starc bands are used to determine extreme (“retrace” or “pullback” are other words used) entry and exit points.
These points vary according to whether the Starc is going up, level or down.
It is all shown in a simple way in the diagram >>>
By
tymen1 at 2008-08-28
Please note that the examples below may seem extremely confusing at first, but when you are trading it is really very simple and obvious!!
However, you may want to print the Starc bands chart for reference.
a) For example, a long entry + starc going level means we consider the lilac lower dot on the “level” diagram and enter there.
b) For example, a long entry + starc going up means we consider the lilac lower dot on the “up” diagram and enter there.
c) For example, a short entry + starc going up means we consider the 3 dark blue upper dots on the “up” diagram and enter on the 3rd.
d) For example, a long exit + starc going level means we consider the dark blue dot on the “level” diagram and exit there.
e) For example, a short exit + starc going down means we consider the 3 lilac lower dots on the “down” diagram and exit on the 3rd dot.
f) For example, a short exit + starc going up means we consider the lilac dot on the “up” diagram and exit there.
(checked = no errors)
Definition : The Keltner Channels.
A 5 minute with Bollinger bands, Keltner bands (period 4, factor 1) and standard/inverse Di Napoli MACD’s is used to get better entries at the begin of the trade.
The slopes of the mid Bollinger and MACD are read as vectors.
They are then added to give a resultant.
The direction of this resultant points to one of the Keltner bands (or in between).
The selected Keltner band (or in between), thus gives the best entry.
Depending on whether the trade is long or short, a standard or inverse MACD is used.
The MACD’s are colour coded to prevent confusion.
Linear Mode
