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TRADE RULES
- Risk
- Risk per trade will be limited to 1.5% or less per trade or an overall open risk of 1.5% or less
- Value per pip- determined by risk: risk per trade / SL amount = $/pip
- e.g. 5k account, 2% risk = $100 risk, SL is 25 pips :: 100/25= $4/pip or 4 mini lots
- Trade Entry
- Time: Look for entries near the open/close of a session; optimal entries are London open, NY open, London close
- Want bias confluence on daily/4hr or 4hr/1hr or all 3…regardless trade with bias direction of 4hr
- Optimal Trade Entry (OTE)
- Draw fib from swing of the day or yesterday high/low to today’s high/low (can use the 4hr fractals as quick showing of the swing)
- Look for trade direction in bias of 4hr
- Want to see confluence of key S&R areas (listed in 5) between the 62-79% fib zone
- Double check pivot trade zone
- Dealer’s Spread – Include the dealer spread when determining the price to enter a trade to ensure it is covered?
- Trade Into Opposing Direction – Enter trades on PA that is opposite the anticipated price direction. Enter long on down candles. Enter short on up candles.
- Take Profit Goals
- Using the fib to draw OTE, 127 and 168% are good TP zones
- Using the fib to draw OTE, move the fib so that the 50% is at the top of the swing (if long) and use 100% as TP
- Any confluence of major S&R areas that might exist, not necessarily a TP area but something to monitor
- Exit- Monitor trade risk until trade is closed
- 30-50% of trade taken off at 30 pips into move, remainder at ultimate TP
- Exit trade if trade bias changes during trade or analysis suggest trade is no longer valid
- Stop Loss
- SL- place 10-20 pips below/above swing used for Fib
- Move SL to BE when PA trades above/below the previous swing high/low used to draw the Fib
- Do not use trail stops, only manual stops