[U][B]Counter Trend Trading Plan[/B][/U]
[B][U]Morning Routine[/U][/B]
Every trader needs a morning routine! This is a list of things you will do every morning before you begin trading, and here is mine:
[ul]
[li]Open Lot Calculator to calculate ideal position size.
[/li][li]Look at Economic Calendar to identify important news releases.
[/li][/ul]
[B][U]Indicators to use[/U][/B]
[ul]
[li]All charts will contain Bollinger Bands (BB) at standard settings (20-period with STD=2.0).
[/li][li]The 4H chart will also contain Bollinger Bands with STD=1.0 overlaid with the other BB.
[/li][li]The 15M chart makes use of the Stochastic Oscillator with settings (8,3,3).
[/li][/ul]
[B][U]Entry[/U][/B]
[ol]
[ul]
[li]Begin scanning currencies from the [B]4H[/B] time frame - we are looking for how price action (PA) interacts with the BBs.
[/li][li]If BBs are level (both outer bands and the mid-band), a breach of the outer BB is a valid signal for entry.
[/li][li]If BBs are contracting (in other words, whenever the outer-bands are not expanding), each breach of the outer-BB is a valid signal for entry.
[/li][/ul]
[ul]
[li]Entry into a trade is only taken from the 15M time frame.
[/li][li]To enter, construct a regular 2 candle count back line (CBL) and wait for a close beyond the CBL line.
[/li][li]If the close beyond the CBL line coincides with a crossover in the Stochastic indicator (ideally from oversold or overbought areas) - enter on the open of the next candle.
[/li][/ul]
[/ol]
[B][U]Stop Loss[/U][/B]
[ul]
[li]Stop loss must be placed at the last swing high/low + spread.
[/li][/ul]
[B][U]Break Even[/U][/B]
[ul]
[li]Set SL to Break Even (BE) when R:R reaches 0.5. That is, the point at which reward is exactly half the size of the Risk.
[/li][/ul]
[B][U]Position Management[/U][/B]
[ul]
[li]Entries are made with 1 lot to maximise R:R.
[/li][li]Each entry will risk 2% of the account value.
[/li][/ul]
[B][U]Exit Rules[/U][/B]
[ul]
[li]These are subjective - it depends on looking at the BBs of the home chart and deciding to stay in the trade or leaving the trade.
[/li][li]Because these trades are counter-trend - I set targets at R:R = 1, 1.2 and 1.5. If I believe price will go further, I will stay in. If I don’t fancy the chances, I will attempt to get out with at least R:R = 1.
[/li][/ul]
[B][U]Entry[/U][/B]
[ul]
[li]Stop loss must be placed at the last swing high/low + spread.
[/li][/ul]
[B][U]Trade Management[/U][/B]
[ul]
[li]Do not run any full screen applications whilst trading - you have to be able to view your trade’s progress!
[/li][/ul]
[B][U]General Trade Rules[/U][/B]
[ul]
[li]Do not entry 1H before a red-flag announcement.
[/li][li]Never move a stop against the direction of the trade.
[/li][li]Max 5 trades per day.
[/li][li]If confused or unsure, sit the trade out.
[/li][li]Close all trades by 8pm GMT on Friday.
[/li][li]Never take a flier in a good account.
[/li][li]Log all trades in journal 
[/li][/ul]
[B][U]Journal Rules & Post-Trade Analysis[/U][/B]
Things that must be logged:
[ul]
[li]Pair.
[/li][li]Time.
[/li][li]Long or Short.
[/li][li]Stop amount.
[/li][li]Won or loss amount.
[/li][li]Reason for taking the trade.
[/li][li]If you broke any rules.
[/li][li]Winning percentage to date.
[/li][li]Average R/R to date.
[/li][li]Profit expectancy to date.
[/li][li]Maximum profit available.
[/li][li]Profit efficiency (Actual profit / Max profit).
[/li][/ul]
