I am currently putting together my trading system. I want to take my time and get this right so I would appreciate it if other traders could look over it and point out any errors/oversights or give any advice, any comments welcome.
I have decided I am a swing trader since I can spend 2 - 3 hours most evenings trading. When I open a chart I glance at the daily chart to gauge long term trends, then switch to hourly chart which I trade off. When I decide to enter a position I switch to a 1 minute chart to determine my exact entry point.
My main objective is to trade on support and resistance levels, when a swing starts I usually assume the price will return to the previous level of support/resistance. I use 15 EMA and 5 EMA, I look for crossovers to determine when the price is going to swing then glance at Stochatics and RSI charts to make sure they aren’t saying the opposite. I also have 100 SMA on the graph to show me the long term trend, if a trade is going in favour of the long term trend I am more inclined to take it than if it is going against the trend.
I usually set my stops at 50 pips each side of the entry price, though this depends on how far the price is from the support/resistance level I predict it to return to. If the price is only 40 pips from previous support/resistance I will set stops at about 30 pips each side of entry price.