Hope all is well. I’ll try my best to explain everything and how I view a trade set up. Feel free to ask questions and bounce ideas off one another. Look forward to some opinions and different views.
First thing is…
*I identify Support/Resistance(S/R) off the daily chart and color those lines green.
*Identify S/R off the 4HR chart and color those lines blue.
*I use two indicators RSI and MACD with the default settings.
*I trade using 4HR charts.
For me to open a buy position…
The RSI has to be crossing and the candle closed above the value of 50.
The MACD line has to be above the signal line showing it’s starting to diverge
The price can’t be pushing up against a resistance zone. I put more emphasis on the Daily S/R zone than I do the 4HR S/R zone but still respect it.
For me to open a sell position…
The RSI has to be crossing and the candle closed below the value of 50.
The MACD line has to be below the signal line showing it’s starting to diverge
The price can’t be pushing down against a support zone. I put more emphasis on the Daily S/R zone than I do the 4HR S/R zone but still respect it.
If all 3 are met than I open a position.
*I set my stop loss at the last candles high/low depending the direction I’m taking. If the candle isn’t big enough and too tight I will set it at the last swing. (I have them on my chart I posted)
*I set my TP at the next S/R zone, but with each closing of the candle I move my SL to the high/low of the candle(depending on the direction of trade) that just closed given that the candle has some body to it. And only if the candle is going my direction, meaning if I have open a buy and the next two candles are in profit I move my SL to the low of the latest candle that closed. Let’s say the next candle the price moves down a little but doesn’t stop me out. I leave my SL at the last candle going my way not the one that just closed. (goodness hope that makes sense lol, I have shown it on my chart as well).
*Also have to be mindful of whipsaws, so I look at what the price has been doing and if it’s in consolidation I wait for it to make a break out and than open a trade once all the signals have been given.
*I also remove my Stop Loses during the swap just so the spread doesn’t take me out of the trade. Add them back in at 6pm eastern time.
Feel free to ask questions. I have used this strategy for the last three months but have backtested going back to Sep. 2020 with good results.
Good Luck Trading everyone. Look forward to chatting about trading ideas.