After nearly 2 years under the wing of my mentor Michael Huddleston i have started to find some consistency, and one of the methods i have learnt but not applied much is trading accumulation and distribution, which i will shorten right from the start to trading A/D!
There are many of us in baby pips who are learning from him but i never see anyone trading or even talking about this method…so i thought i would add this to my arsenal and go out there and see how good i can get at it…
By the way i’ll only be trading the cable and the fiber for now even though you can apply this to any pair.
Here we go…
i’ll try make this method a complete trading system and plan so that others can learn and trade this method too, hopefully it will be refined as i go along but for now here is what i’ll be doing.
Trading Plan
At the weekend draw all support and resistance lines from a weekly, daily and 4 hour charts.
On a 1 hour chart, bring up the A/D indicator on MT4 and a Williams percent R on a 10 period. I am monitoring the 1 hour chart for set ups and then drilling down to a 15 min chart for entries.
I’ll mainly be trading from Tuesday to Thursday and my main time zones will be London Open (LO) and New York Open (NYO), these days and times both fit in with my life and of course are the highest probability pay out times. Definitely No trading on Non Farm Payroll Fridays (first Friday of every month).
I will be looking for the A/D to have divergence with the asset i am trading when at a key support level previously drawn Or at either a 50 or 00 number, and i will only trade if the williams % R is oversold or overbought.
For the best entries I will use the OTE pattern, reflection pattern and/or turtle soup. Also looking for SMT divergence between the correlated pairs or the USDX. I will only look for one of these patterns for my entry I do not need to use all of them.
For exits I will either look for London close (3-4pm), average daily range to be reached and or swing extensions. There will also be times when we are in a nice buy or sell programme in which case i may hold for the weekly range, i may also wait for a second divergence to happen signalling that we have reached another intermediate swing point to go in the opposite direction.
When in a trade take off half of the position at 25-30pips and let the rest go to the target (stated above). Also move stop to break even once half is off.
Only take sell trades that are above the asian range low, and only take buy trades that are below the Asian range high. As a side note i will be taking into consideration the buy and sell zones on the daily pivots.
I am taking note of the market flow on the daily and 4hr, but not using these to decide which direction i’m trading. The point of keeping track of these is because when they are both flowing in the right direction I will be looking to hold the trade for longer and help with targets.
[B]Risk Management[/B]
Very important of course! i’ll be risking a maximum 2% of my whole account on any one trade, when i win i will continue to risk 2%, when i have a loss i will reduce my risk to half and then half again if i lose the next trade. i will only go back to 2% risk once i have at least recovered half of my first loss.
Pretty simple huh? …
hopefully i will fly under the radar for a while till i have some more content for this thread as i only expect to get one trade a week.
Ok lets get down to business and make some money!
Firstly and most importantly, i’m going to draw the support and resistence lines that are within 3-400pips of where price is now. I will do this every weekend.
Here are the levels i will be watching this week for the Cable and Fiber as well as the 50’s and 100’s.
Ok so i didn’t find anything in LO or NYO, I wasn’t watching the charts at LC and I miss one! its always the way lol.
So in hindsight we have our first trade, I missed it but i think at this stage the more we can look at the better.
Not sure if i mentioned it but i will be finding these trades on a 1hour chart and enter on a 15min chart.
So the trade… Fiber, at a level that i marked yesterday, 1.2620, and there is divergence between A/D and Fiber. A/D made a lower high while the Fiber made a higher high while the Williams%R was at an overbought reading. At a kill zone (London Close), hey presto that’s a trade!
Here is the chart to demonstrate, i don’t know yet if its a winner, but the main thing is that the asset travels at least 25pips, which would be the point where we take first profit and move to breakeven, giving us a win situation in my book…I’ll keep you posted on how this trade turns out.
ooopps forgot to mention, there was also SMT divergence between cable and fiber, the cable failed to make a higher high when the fiber did make a higher high. This is further confirmation that the trade should be successful.
Lol cheers bro! I’ve never traded this method before but I think I can get good at it, all I know is that it will be fun trading it and learning more. The only way I could do it is by making this thread because I know now people are watching so I can’t take stupid trades or revenge trades and I have to stick to the plan. The pressure is good pressure.
Couldn’t agree with you more, i think the transparency helps keep you on track… Ill be looking to start my own trading journal on here too, just waiting to pick my moment really lol… May do it when i fund a live account this summer - complete with MyFXbook
Oh and PM is taking time out celebrating his wedding! Honeymoon i presume by now, but im sure he’ll be back soon to tear it up once again !
Ok guys i’ve just taken a long on the cable but before I review that lets close up shop on the Fiber (short) trade we spoke about yesterday.
As we can see we have travelled 45 pips on the Fiber IF i had been at my screen and taken an entry at 1.2620. I would have exited at London Open (LO) because we had a judas swing down. So in summary we could have taken half off at 25pips and the remainder at 45pips, i’m not concerned if I have left anything on the table at this stage, I would have been happy to take just over 2% for the trade.
Here is a chart showing the entry and exit (Hypothetically) Arrows should hopefully help.
Ok lets go through a real trade i’ve just taken, as we speak its not going great but lets see how it pans out.
I went for a Cable long,
Reasons:
1hr chart, divergence between A/D and Cable, (see chart below, marked with yelow diagonal lines)
SMT divergence between Cable and USDX.
Below the central pivot and below the asian range low.
Oversold on Williams % R
Key resistance level marked from before, 1.5650
We have met enough criteria to take the trade, and I entered at 1.5651, allowing 1 pips for the spread. it proceeded to go through the 1.5650 giving me a bit of a scare, I looked across to the left hand side of my chart to see where stops could be resting and to me it seems that Fridays low was the target, I checked where my stop was and it just so happened that my stop was 11 pips below it so it gave me a bit of confidence that if this was a stop raid then I should hopefully still be kept in. Lucky enough I am still in as I write this but no where near taking first profit and moving to break even. I’ll keep you posted… by the way my stop on this trade was 25 pips, and in the future all stop will be either 25 or 30 pips depending on my entry pattern.
I’m not enjoying how this trade is going, since going through the 1.5650 level we have now come back up to the same level and it seems to be providing resistance, if we don’t get some candles closing above this level or a strong push past it i may close the trade around break even. …i’ll keep you posted
ok guys i’ve closed half my position (1%) for a 1pip profit lol.
the other 1% is still on, i will let this half just pan out win or lose. if it travels 25 pips then i’ll just move it to break even and not bother take any off.
The reasoning for this action is to reduce my risk, usually the good trades wont take long to go into profit and this trade didn’t look great especially when it started finding resistance at my entry! Lets see what happens.
Firstly, congrats on getting the thread going brother! It’s awesome to see the musketeers in action - we’re gonna be examples of how ICT’s teachings are pure gold!
Secondly, hahaha sorry bro I forgot to invite you and SanJ but I promise to make up for it We’ll meet up once we’ve raked in a few more pips and we’ll make up for lost time! Haha
Ok the reminder 1% was stopped out for a 1% loss. Not a great start, I shouldn’t have been trading today, forgot it was 4th July! Doh! but I won’t use that as an excuse, a loss is a loss, take it on the chin and move on to the next one.
It’s awesome to see the musketeers in action - we’re gonna be examples of how ICT’s teachings are pure gold!
We’ll meet up once we’ve raked in a few more pips and we’ll make up for lost time! Haha