I would like to share this with everyone, jeesh it was weird! Ok, I finished my days trading, and after 5 trades, I was up slightly for the day… Forgive my English, it is not my mother tongue. The market made a significant move, and I had 11 pips, not good.
As I fell asleep I dreamt I got lost in a forest, and as I ran around, just expending energy, there was this little village ahead. I went there and was met by a old man with a long grey beard, ha ha, bear with me fellow traders. He looked at me and immediately said, you are looking for the treasure? I said Yes of course. Then he told me to stop fighting, Hell, if this man just knew how I fought the markets today!
Ok he said, here is the treasure, if you find it you can always go back and fetch more,it is non exhaustible. but you will have to concentrate, the treasure consists out of 2 parts, here is part one
Look at your charts and use your RSI to establish the 20 .80 and 50 levels. I shouted Yes thats what I do! He said No my son, that is only half the treasure. you have to look for hidden divergence, divergence and positive divergence, and then, and only then do you go to step 2, wait for a hook on them that is, waiting for the RSI to reverse… He wanted to send me away to teach me discipline but I convinced him to help me with part 2.
He spoke to me in a low voice, and he said, When you have that, look for Dojis, engulfing and hammer formations. I said yes I know them. He the said Get your point of entry right, this is crucial. Only trade when both step 1 and step 2 occur at the same time. . Then you can unlock untold riches, but dont mess with any of these pointers I gave you, the universe does not like that.You can have untold riches, take it, you deserve it if you work hard at it, if you are at peace with yourself and if you do not wish harm at anyone. I wanted to thank him but then my dog licked my face!
This is not a system, but trading when the odds are in your favor
, and your system, YOU, are in good health.
Maybe I should give more formal explanations for this discretionary trading system.
Step 1; Get a 21 period EMA median price on the chart. Fibonacci number of course. It works very well on any time frame, Weekly Daily, H4, H1, MIN5, or whatever. It works on any market as well.
Step 2; , Use a RSI 8 period, median price, Fibonacci number of course.We are looking at the 80, 20 and 50 levels.
Step 3; Look for candlestick patterns, Engulfing, doji,hammer ,inside bar break.
Also look for Price action formations, Failing tops/ bottoms, double tops/ bottoms, head and shoulders, continuation patterns, flags pennants.
Step 3; Look if the market is trending or not. If trending ,ie staying above or below the 21 EMA, then wait for a correction towards the 21 avg. Now look for Candlestick or PA to confirm. The RSI must be at the 50 level and reverse. Then TRADE! Or else ,RSI shows Hidden or Regular divergence in the direction of trend, TRADE!
If the market is sideways, draw your channel lines and if broken, RSI confirming, divergence, Hidden or Regular appears ,MA21 breached, and CS confirms, PA channel broken ,then TRADE!
Basically the MA must be break at the same time when CS and PA confirms.I normally wait for Hidden or Regular divergence aswell, but NOT against a steep slope MA.