The System

No fancy name or whatsoever. This system is a synthesis not only of the knowledge acquired, required backtesting and experimentation, but most importantly the time frame, risk aversion and biases best suitable to my personality and lifestyle. 

It has been built to make sure I have the odds on my side, to make sure my only concern is to spend 1 hour a day scanning, analyzing set ups, checking my open positions and repeat the process autistically and emotionless.

The following are its cornerstones:

1. Markets traded:

    a) Stocks

    b) Commodities

    c) Crypto Currencies

    d) Forex

2. Timeframe: daily

3. Entries:

    a) Always long entries

    b) Market traded in a confirmed uptrend

    c) Price trading in a value zone

    d) Trigger: Ostensible price action change - ideally a strong bullish candle, backed up by above average volume, after low volatility-low volume consolidation of at least 20 bars

4. Stop loss: 1 Average True Range (20days) below the value zone identified

5. Take profit: Candle closes below the 1 ATR trail line

6. Risk (this should actually be rule 0 to rule 10):

    a) 1% of total equity at risk per trade

    b) maximum 30 trades open 

7. Indicators used:

    a) 50MA (200MA can also be used)

    b) ATR trail line 

Will be breaking down its cornerstones and story behind their adoption throughout this blog. You can also count on scanned trades meeting its rules as often as possible with correspondent analysis.  

The set up should look as follows: 

Risk management wise, say your account has a total equity of 2000 USD. Then 20 USD should be the most you can lose per trade. 

Taking into account our stop loss, your position size should be USD 87, 85. - Yes! Don't be greedy! The outcome of this trade was a nice profit (USD 57.48) but it could as well have been a loss. Your job as a trader is to stay alive to catch moves like this. They'll keep on coming don't worry.

Happy to develop in the upcoming posts :)

Cheers,

RR