The following is the description of my strategy as I understand it.
I look at the end-of-day daily charts as the main reference to decide on entries. I look at weekly and monthly charts to get the bigger picture 4-hour and 1-hour charts to get into details.
Respectively, I look to enter trades that last from 1-2 days to more than a week and potentially several weeks (although, I have never been into such long trades yet).
Framework of analysis
As far as I understand, I am more of a position/swing trader. There are three elements to my trading:
I look at the trend and try to take trades in confluence with it.
I look at long-term support and resistance zones and try to take trades near them.
I look at three types of candle patterns. Those patterns are tailed bars (pin-bars, multiple pin-bars, multiple tailed bars etc., those also include “fakeys” - pin-bars or two candles showing failed break-outs) and inside bars (both the ones after big breakout candles for continuation and the ones that are multiple insides bars aka coiling inside bars for trade with the trend).
I also look at EMA 21 as dynamic S/R and EMA 100 and 200 for longer term dynamic S/R and trend.
Reflection: you see, I wrote a line on trend and a line on S/R and a whole paragraph on candle patterns. That means that I am still paying too much attention to the actually least important. Hope to deal with this issue with your help.
Trade entry rules
Within my framework of analysis I try to take trades when I see them at important S/R zones and with confluence with the trend. I enter with predefined SL and TP that I define basing on analysis of S/R zones.
If I see exhaustion of the trend I might enter against it given the presence of long term resistance and strong pattern signal. But I have not done that in 2019 yet.
As most newbies, I have trouble following my rules and periodically enter trades violating the rules. I will mark and discuss them separately.
Trade management rules
I try to exercise set-and-forget approach to trades. That is, after entering them with predetermined SL and TP, I would look at them once a day (at day’s end) and would let them run till SL or TP.
I might interrupt trades before SL/TP if they were erroneous (based on greed, revenge and other emotions rather than analysis) or if I see a clear signal against the direction of my trade at important S/R level. In the latter case I would probably try to look at the news to understand what is happening.
I do “pyramiding” on successful trades trying to strictly keep the risk under control. That is, when trade goes in my favor, I would only add to it at 2:1 Reward/Risk point by moving initial SL to the first entry point and placing the SL of the second entry at 1 Risk (1 R) distance from the second entry point (to keep my risk at 1 R). The third entry would then see the first SL moving further to lock in 1 R amount of pips, the second SL moving to lock in break-even trade and the third SL set at 1 R distance from the entry point etc.
Money and risk management
My account is tiny now (100$), but I treat it as if it is equal to 1000$ (being ready to top up if needed). Based on this, I define my Risk per trade (1 R) as equal to 1% of my account (10$). This leaves me with trading only microlots (0.01-0.05 lot) depending on how big the risk is in pips. I am comfortable with 100 pips risk which equals roughly 10$ for 0.01 lot trade. If risk is over 100 pips, I still put 0.01 lot and have to accept the bigger risk (but that never happens). If risk is bigger moneywise when I trade Gold, Oil, Indices, I just have to accept it and treat it as if it is normal.
I stick to measuring my trades in Rs and am prepared for 20R consecutive losses (though would not like to see my preparedness tested). That means that while I made less than 20R consecutive losses, I would still be placing 1 R trades in money terms (equalling 10$). To be honest, I do not know what I will do if I take the 20R hit. Probably, make a lengthy pause in trading.
I try to avoid holding more than 2 trades at the same time. And I also try to avoid mirror trades. That means, if I see AUD/USD and NZD/USD opportunities at the same time, I would rather choose one of the pairs than trade both. However, if I see AUD/USD and EUR/JPY opportunities at the same time, I would probably take them both.
I look at forex majors, oil, gold and major indices (DJ, SP, FT, DAX, AUS200).
That is what I trade. I have some tweaks to my entry rules already, handy for filtering out low probability trades. I will talk about them a bit later, when I reveal my results for the January-February trading.