TRADING WITH INSANE ACCURACY
“Never move your stop away from your entry level if the trend is moving against you. The market won’t disappear if you get it wrong, but you will.” – Paul Day
Hello:
Sometimes a gap may be filled and sometimes it mayn’t be filled. Once a gap occurred, the market may later turn contrary to the direction of the gap and move fast for the rest of the week, and vice versa (which means the market may also continue in the direction of the gap and trend nicely for the rest of the week). What you need is the ability to identify the right market direction and take advantage of it. This is the reason behind the strategy discussed in this article. It’s a new and advanced gap trading method - yet simpler and more effective. It makes you stay in the right direction of the market after a gap occurred; whether it got filled or not. Moreover, gaps are no longer traded exclusively off the hourly charts; they’re now traded off 30-minute charts and 4-hour charts. This ensures that we don’t need to wait for weeks, looking for gaps on hourly charts, for the lower and the higher timeframes also have trading opportunities.
Why these settings work, I don’t know nor do I really care. When you find something that works, stay with it.
A long and prosperous career as a trader depends on the ability to be on the right side of a trend. Wise traders stack the probabilities in their favor by only trading trending markets. Strictly speaking, trading in trend markets should only be done in the direction of the prevailing trend, i.e. in long markets only long and vice versa. This could be the beginning of your financial freedom.
Strategy Snapshot
Strategy Name: Advanced Gap Trading
Time Horizon: 30-minute, hourly, and 4-hour charts
Indicator: RSI, parameters customized
Trading orders duration: Maximum of 2 weeks
Average monthly signals: About 30 trades per month
Number of pairs and crosses: 23
Performance: An average of 1000 pips (one thousand pips) per month. This can only improve more!
As far as the strategy discussed here is concerned, there may be other relevant questions in the mind of potential and existing subscribers. Some of the questions are answered below.
When do you place a trade?
Answer: New trades are usually placed on a Monday, at the close of the New York Session
Do you go long or short?
Answer: I go long when the RSI is above our customized level and go short when it’s below the customized level. It should be noted that, as a rule, downward trend occurs much faster than upward trends. That’s the case in all markets. I judge the market to be neutral when the RSI is neither above nor below our customized level. I’d not enter a market that shows some degree of neutrality.
What’s your position sizing?
Answer: I use 0.01 lots for each $2000 (therefore making it 0.05 lots for each $10,000 and 0.1 lots for each $20,000). Always be cognizant of your position size and focus on how much you can potentially lose on a trade instead of simply focusing on the profit.
Where do you place your protective stop?
Answer: The stop is placed at 100 pips away from the entry price. The initial stop is absolutely vital and must not be altered or widened under any circumstances.
When do you move your protective stop?
Answer: The protective stop is moved to breakeven when about 70 pips or above have been made, plus about 100 pips can be locked if the profit goes up to 180 pips or above.
What’s the correct entry price?
Answer: For a trend follower, an order is placed when there’s a confirmation of the trend. There’s no correct entry price, though some price levels have better chances of turning the odds in our favor. A trend may continue when you think it’s gone too far; and what you judge as a correction may be the beginning of a new trend. Even the acclaimed psychological levels aren’t a guarantee that the price would move in your favor or against you. You can’t get more than a long-term 50/50 chance of winning or losing. So the only way you move ahead is to use a sensible risk-to-reward ratio.
What type of entry order do you use?
Answer: Instant executions.
When do you take profit?
Answer: A profits is taken when the Take Profit level is hit or when the Trailing Stop is hit or when the maximum trading duration has expired.
Taking Advantage of the Strategy
This strategy is another example which shows that you don’t need a complicated trading system to make consistent profit from the markets. Below is the login detail of the account on which this trading idea is practiced. My existing clients have this account details with them, and you can have it too. This gives you the opportunity to see how I place trades live so that you can do so accordingly.
Account Details
Broker: FX Clearing
Platform: MT4
Server: Demo
Initial deposit: $10,000
Login: 1001084791
Investor’s password: You can get it by joining me at: http://www.fxinstructor.com/en/analytics/ituglobal
Besides their overall concern for Forex traders, the team at FXInstructor.com has constantly demonstrated an intense interest in an individual trader who signs up for their services. This team has prepared many mentorship services to help new and advanced traders. Time-tested trading principles have been incorporated into these services. Do yourself a favor by signing up for their services.
This article is ended with another quote from Paul Day:
“Many traders enter positions with a scary risk-to-reward ratio, causing them to frequently risk more than they can actually win. In fact, many traders trade emotionally without thinking of a stop loss at all. And that’s exactly the beginning of the end.”
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