Lesson 16: Simple Trading Strategy
I begin by saying that this strategy worked for me initially, and it’s not sure it will work for all of you. Each one will improve over time, and you will understand the best strategy suitable for yourself.
As you can see, we are on G/J with a 1-day time frame. First, I identify the closest resistance and support zone to my price. I do this with the line chart, and then I check that they match up with the candlestick chart.
As a second step, I go down to 4h time frame to draw my Supply and Demand zones and make a projection of what could happen. As you can see, the Supply Zone has already been touched, but the price has never entered it, so I expect a new price rise within the Supply Zone, a possible Fake Out and then a beginning of a descending trend.
I went down to the time frame 1h and saw the price reaching my Supply Zone. Once reached, I control the volume, which in this case is high. Now, I wait patiently for a descent trend with the exit from the area of Supply.
As you can see, the price went out of my zone but closed badly. My entry is based on min. 15 Time Frame and are based on a strong output from the area with a high volume, which in this case is present. The exit is not the best as it has retraced, and a long shadow has formed, so I will wait for a new, stronger confirmation as the price has hinted that it wants to go down.
Once the price exited the zone with a strong candle, I went short with a S.L. at the beginning of the candle, and as a T.P. I had a R: R of 1:1.2, so I didn’t have a predetermined T.P. Remember that I am a Scalper and I am satisfied with few Pips. As you can see, there was a retest, but my S.L. was well positioned and, therefore, was not taken. T.P. reached up!
As you can see, I’m fine with a few pips, but I left a lot of PIPS as the price collapsed and the S.L. was positioned perfectly. As I have already said, I am satisfied with a small slice of the market, and my T.P. gave me a 3%. Remember always to follow your plan.
As I mentioned before, this strategy is suitable for me, but it may not be ideal for each of you; I suggest you understand through your mistakes what is best for you!
Good luck
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