1. PATTERN: Falling Wedge
2. TRADE TRIGGER: Breakout with an above-average-sized (open to close) bullish candle and above average volume.
3. TARGET: Outlined resistance area - previous support.
4. STOP-LOSS: 1 ATR, or 1x the average candlestick size (last 14 periods) below the 10 EMA.
5. RISK TO REWARD RATIO: abt 2.90
6. POSITION SIZE / RISK MANAGEMENT:
a) No more that 1% of your total equity at risk on an single trade, therefore: (Stop Loss (set logically as per above) / Entry Point) x 100 / Total Equity < 1
b) No more than 30% of your total equity at risk at any given moment
7. IMPORTANT NOTE: Remember that drawing lines on a chart means nothing if you do not command and deploy thorough risk management principles and rules.
===
Having this said, discretionary trading is a heavy burden, so many choices, so many doubts … At a certain stage of your development as a trader you will realize that setting a quantified trading system, which translates these biases and ideas into numbers, conditions, signals and commands, and is time tested, is your next step as a trader.
If that's the stage where you're at, then feel free to drop by my store for backtested, quantified trading strategies across all markets and asset classes.
Cheers,
Tenacious Tribe - Quantified Trading Strategies
2. TRADE TRIGGER: Breakout with an above-average-sized (open to close) bullish candle and above average volume.
3. TARGET: Outlined resistance area - previous support.
4. STOP-LOSS: 1 ATR, or 1x the average candlestick size (last 14 periods) below the 10 EMA.
5. RISK TO REWARD RATIO: abt 2.90
6. POSITION SIZE / RISK MANAGEMENT:
a) No more that 1% of your total equity at risk on an single trade, therefore: (Stop Loss (set logically as per above) / Entry Point) x 100 / Total Equity < 1
b) No more than 30% of your total equity at risk at any given moment
7. IMPORTANT NOTE: Remember that drawing lines on a chart means nothing if you do not command and deploy thorough risk management principles and rules.
===
Having this said, discretionary trading is a heavy burden, so many choices, so many doubts … At a certain stage of your development as a trader you will realize that setting a quantified trading system, which translates these biases and ideas into numbers, conditions, signals and commands, and is time tested, is your next step as a trader.
If that's the stage where you're at, then feel free to drop by my store for backtested, quantified trading strategies across all markets and asset classes.
Cheers,
Tenacious Tribe - Quantified Trading Strategies