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Trading Systems - I call this one the "scalp to trend"

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Ninja
Super Contributor
HI All , well its a new year and here's to making loads of lovely lolly on the markets! I wanted to share one of the systems I trade below, it is my favourite system and gives between 1 and 2 entries per day. I trade it on the indices and forex, namely FTSE, Dow, Oz/$, EUR/$, GBP/$. I have not traded it on SSF's, CFD's etc as I believe these products to be reckless and dangerous and far to costly. Set Up: (Daybreak) 1) Draw in key levels of support and resistance. (I use the 30 min chart for this as it will draw right through to 1 min but gives clear recent high's, low's and supp & Res) 2) Determine trend. 3) Print out all news releases for the day. I do not trade news releases and will always be out of the market at these times. I find fundamental news moves the markets but not always as you expect - so I avoid it like the plague and just trade the price. Trade Entry: 1) 15 Min chart to be OB or OS on RSI. This has to be on the close of the candle. I also use Stochastic and MACD but these are simply for additional momentum insight and are not essential to this trade set up. 2) Check where price is in relation to .50 and .00 numbers and the trend. Price can be drawn to these levels especially if in line with trend - be aware! 3) Use 5 min chart for entry - must also be OB/OS on RSI 4) Enter once price closes below(RSI > 70)/above(RSI < 30) SD1 BB on the 5 min chart.( It's that simple, do not wait, second guess etc, just enter) 5) Profit target 10 points. Here bank half profit, move stop to break even. You are now in the best position possible - banked cash, impossible to take a loss on the trade but with infinite profit opportunity! Stop Loss: 6) Exit trade if price closes back above SD1. 7) Exit trade if price moves above 10ema (once closed below) 8) Exit trade if price moves above 20ema (once closed below.) 9) Exit trade if price moves out of bull/bear channel.( Between SD1&2) 10) Use fib retrace to monitor trade momentum, however do not close or enter on Fibs, rather ema's. As price moves further in your direction on the 5 min chart you will close past key markers - 10ema, 20 ema, BB mid poits and opposite side BB SD 1. As you move through these levels so they become your dynamic stop loss markers. For example, if you are short and have closed below 10ema and then below 20 ema and then below BB mid point and are on your way to BB SD1, a close back above the BB mid point would be my stop. It is a clear sign that the short term trend is faltering. Chart set up: BB SD1 & 2. 10 EMA, 20EMA 200 SMA. Pivot points with S1-3 and R 1-3 plotted on chart. Recent highs, lows, supp and res drawn in. I trade candlesticks. RSI, MACD, Stochastic. Thats it, I try and keep charts uncluttered. Remember Supp and RES lines along with pivots are watch out points, not exit /entry points, your price action in relation to the trend (ema's, BB) determines your entry and exits. Good luck, I hope this is useful - remember you set up on the 15 min but enter and trade the 5 min. As always, may the charts be with you!
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