Trading Plan

Why. Price Action Context (PAC) provides probable structure to an otherwise random beat. PAC is a skill that can be learnt and continually improved. 

Task: (1) Continue to develop as a fulltime, PAC trader. (2) Build financial resources for my family and investors.

Daily preparation. Review my charts for structure, pattern and entry from a top down perspective, update my watchlist, know that before trading my diet and routine was correct, light exercise and stretching, and review the financial news releases.

Core trading mechanics:

Instruments: Currency pairings, the DAX, the US 500, gold and silver.

Timeframes:Weekly, Daily, 4hr, 1hr, 5min.

Risk profile: 1.0% – trade max, 0.5% for split positions, 5% – day, 9.9% -month

Trading analytics:

  1. Weekly: all trades opened/closed within that week logged
  2. Monthly: all trades opened or closed within that month/overall monthly performance
  3. Quarterly: quarterly trading plan review/performance
  4. Annually post investor results

Establish PAC:

  • Higher to lower timeframe analysis
    • Structure
    • Pattern
  • Forecast
    • probable vs possible
  • Neutral

Watchlist:

Entries:

  • Based on flexible rules

Stop positions:

Targets:

Accepting loss:

Strategy: Execute PAC setups: (see examples below)

Pre-breakout (PBO).

The USD/JPY example below supports a PBO build-up. The box below shows on the 1hr chart; however, in this trade, I referred to the lower (5min) chart for the PBO entry long.

USD/JPY PBO setup on the 1hr chart. Stop 12 pips, target 55 pips providing a 4.6R trade.
USD/JPY the same trade but now on the 5min chart for entry.

EUR/USD below is a suitable example of a diagonal PBO and from within a box pattern. Stop placement above the prior high or more conservatively above the high of the box pattern.

EUR/USD 1hr chart PBO short from diagonal support within a box pattern.

Roll reversal level (RRL).

The example below of USD/JPY is counter-trend on the 1hr entry chart but is near the top of a range on the 4hr chart; this is a 2R opportunity, but countertrend makes us more watchful.

USD/JPY counter-trend RRL short 1hr chart. Stop is 21 pips and target 41 pips making nearly a 2R trade if successful.

False break (FB).

Breakout pullback (BOPB).

XAU/USD below is a trade in-waiting short from a possible BOPB short CT. The CT is a concern as an engulfing close long would signal a FB and therefore change to trade direction to long. The conservative stop is above the box pattern drawn. About a 2.7R potential.

Waiting for the activation of a possible BOPB entry short in Gold.

Pure momentum breakout (PMB)

Usually a PMB shows on a higher timeframe chart.

The skill of interpreting between higher to lower timeframe charts is most prevalent in the PMB entry.

GBP/EUR a PMB on the 1hr chart, with the entry being a RRL setup (see below) on the 5min chart. Stop at 10 pips with a 31 pip target providing a comfortable 3R trade.
The 5min chart RRL entry of the PMB from the 1hr chart shown above.

Limit level trade (LLT).

The example below is a 1hr chart. On the higher timeframe price is in a downtrend. A short entry via an LLT with the target established on the 4hr chart. (The LLT must show on a higher timeframe chart to that of the entry chart)

AUD/JPY LLT 1hr chart short 15 pip stop, 78 pip target 5.2R trade.

3P

The chart below is an example of a 3P entry short from the 1hr chart USD/CAD. The 3P setup also provided a double top entry with a 28 pip stop (stop above the middle high) and a potential 178 pip target or 6R.

A 3P entry short 1hr chart USD/CAD.

Impulse, correction, continuation (ICC)

%d bloggers like this: