- check the news and note any major news announcements from midnight on. I don’t choose to trade the event, but correlated pairs move in anticipation of certain data before it actually happens.
- I check the average true range of 12 pairs, 6 majors and 6 exotics that include mostly yen associated pairs. I’m looking for ATR of at least 90, but I prefer greater.
- I use no indicators on my charts, black and white candlesticks only.
- I pull an hourly chart at 1 a.m. e.s.t. and note the high and low of the midnight candle.
- My most successful pair thus far has been GBP/JPY, considering movement during news days and non news days. It would be wise to begin with one pair and master the system.
- subtract the low of the candle from the high of the candle. The pip difference is added to the low price of the candle. This is where we will begin our trade. This will also be the stop.
- Unless the pair ranges terribly, price will go in one of two directions, either up or down.
- From the start, set 2 pending orders, 40 pips out each, one to buy, one to sell.
- I set alerts at BOTH of those levels. When price triggers one of the levels, I’m alerted and I promptly delete the trade that did not trigger.
- I set a take profit of 40 pips for the trade that has just triggered.
- I ALWAYS move my stop loss to break even when the trade has generated 30 pips. Sometimes I move the stop to break even at 20 if I notice a stall.
- If the trade is 15 pips in the green, I’ll take the loss if price turns around kicks me. This has happened with certain exotic pairs.
- I always check the spread while attending to my pending order. If the spread exceeds 5 pips, I hold. I don’t mind paying 5 pips for a good 40 pip run. Yes, there are times when my trade gets triggered during the news. I don’t mind. Yes, I trade during the first Friday of the month. My order has likely triggered out or has propelled it to a win.
- I don’t check daily candlesticks.
- I began trading maximum 1% per trade, 3% daily max. Today, I trade more than that, it’s a personal matter to me. I’m happy with my numbers.
- I write down everything I do. Always maintain a journal.
- If you don’t want to be staring at a screen all night, set a second alert at 20 to 30 pips out immediately after you delete the pending order that didn’t trigger. I love watching money.
personal note- I’ve read some foul information from traders concerning bracket trading. This strategy isn’t for everyone but it’s one that I use often. As far as negative talk and naysayers go, I’ve never seen a dog bark at a parked car. i.e. if you make money, there will be hateful people.
HERE’S wishing you all the best in your trading.
Thx Reno
p.s. 01.20.16 at 3:19 this am, it took me 6 minutes to generate 48 pips. yes, I enjoy trading.
Excellent post!
Good to see that you enjoy trading as much as I do.
Enjoy that profit!
Toekan, thank you for the kind words. I’m confident we BOTH enjoy profit when it happens. Best wishes to you.
Thx reno