Hello Traders! In this week’s Lessons From the Pros article I’d like to explain a couple of tools that I call my “trading assistants” which help me filter out some of the lower quality trades that many of the novice traders out there take.
In numerous newsletters, we have discussed choosing the high quality levels of supply and demand to position ourselves to take the higher probability, higher reward, and lower risk trades. Some of the odds enhancers discussed here and in our Online Trading Academy classrooms are the departure from the level, arrival to the level, reward to risk ratio, etc. This week I would like to add in a combination of two very popular indicators to help us with our trade selection.
A couple of notes before we begin – no indicator or combination of indicators works every time. What do successful traders do when a trade isn’t doing what they planned? They take the small loss – always! Another note is the fact that many new traders try to use too many of these indicators on their chart. While one or two can be very helpful, having five or six or seven or more will cause us to take very few trades, if any. Here are my preferred steps to choose my trades:
Find a pair that is currently trending in a bigger time frame, for example a 60-minute chart.
Identify high-quality supply and demand zones on the time frame chart
Look for a reversal on a smaller time frame chart to “time my entry” in one of those supply/demand zones
Manage the… Continue Reading
