TRADING PLAN

General Rules:

• You will only change your plan on the weekends when the market is
closed and you are not in any open trading positions. This is to avoid
changing the plan and making changes due to emotions.

• You will stick with this plan for a minimum of 25 trades as you realize
your edge needs many trades to play out.

• You will only begin to trade live on the daily and 4hr charts after you
have proven you can be profitable on a demo account.
After this when you have become profitable on a live account trading
daily and 4hr charts you may consider beginning to demo trade smaller
time frame charts. Only after proving yourself profitable on the demo
account trading smaller time frames you will consider going live.

• If you have 3 losses in a week you stop trading until the next week.

• If you lose more than 15% of your account in a month you go back to
demo trading.

What Price Action Signals To Enter ?

General Rules: (For All PA Signals)

• Must form with trend or in range
• Must form at swing high or low.
• Retracement needs to have a few bars to be valid.
• PA signal must be large and obvious.
How big is the signal compared to the other story of price around us?
• Must be form at logical pullback area in the trend such as logical support
or resistance.
• Needs to have enough room to run till faced with next troubling area
Pin Bar

• Must stick out away from price.

• Must have nose 3x size of body.
• Must form with open and close within previous bar.
• If pin formed in range it must be from extreme high or low of
range. (not in middle)

Engulfing Bar

• Must fully engulf minimum 1 previous candle.

• If trading in range it must form at extreme bottom or top and not
in the middle.
• You can take retrace entry when there is an obvious previous bar
low or high that would be reasonably expected to act as support or
resistance.
2 Bar Reversal
A 2 Bar reversal is a Pin Bar that has formed over two sessions. Keep in
mind the 2 bars open is formed on the first bar and the close is on the
second bar. When you blend them together you will get a long nose
which must stick away from price.

• It must stick out away from price.

• It must form with open and close within previous bar.
• The second candle must close:
- below the first bars open for bearish.
- above the first bars open for bullish.
• It must have nose 3x size of body.
• It must stick out away from price.

Pin Bar/Engulfing Bar Combo

• Must fully engulf at minimum 1 previous candle.

• If trading in range it must form at extreme bottom or top and not
in the middle.
How To Manage Trades ?
• Plan your trade management BEFORE entering the trade.
The trade plan will include the break-even level, profit levels and exactly
how you will manage the entire trade.
Always trade according your plan no matter what happens in the market.
• Risk max. 3% every single trade.
• Use a trade size calculator to work out the required trade size.
• Trades will be opened when confirmation is given from a break higher or
lower. (Via pending order, Buy stop or sell.)
• Round numbers are important psychological levels due to a lot of traders
placing buy and sell orders at these points. Put your SL, Entry & TP
positions just above or below those numbers when they are very close.
The round numbers are only valid if they have previously been respected
• Use buffer & spread to calculate your Entry, SL & TP position:
Buffer: 1H: 2-4; 4H: 4-8; D1: 5-10; W1: 10-20
Long : Entry=Position+Spread+Buffer TP&SL=Position+Buffer
Short: Entry=Position–Buffer TP&SL=Position-Buffer-Spread
The more volatile the pair the more the buffer should be.
• Set price alerts for each TP position so you get emailed when it has been
hit and protect your money that way (Change SL): www.alertfx.com
• Never trade similar two currencies or split you risk between them
• Do not trade against the trend.
• No intraday trading:
- During weekend (close your positions Friday evening)
- Friday evening after NY Close & Monday morning before London open
- No USD pairs first Friday of month: NFP announcement.
- When a 4 Hr candle is less then 30 Pips (No convincing momentum)
- Pairs that aren't active during a session.
No trading of USD, CAD, EUR, ... pairs during Asian session
AUD, JPY, NZD, … pairs are OK during Asian session

Trading with Trend - THREE Positions Opened

• Take the first third of profit at the first target level.
• The SL of the second and third position will be moved to break even
when price hits the first profit level.
• Take the second portion profit at the second profit level.
• Leave the remaining third to look for a “runner” that continues on with
the trend and move the SL position to protect your profit.

Trading in Range - TWO Positions Opened

• The first half profit will be taken off at the first S&R area.
• The SL of the second half will be moved to break even when price hits
the first support or resistance area.
• The second half will be taken off at the high or low of the second profit
level.
How To Manage Stops ?
Pin Bar
• Stops are to be placed above the high or low of Pin Bar in 90% of
trades.
• You can place the stop above or below the 61% of the Pin Bar
when the Pin Bar is abnormally large. (Use Fibonacci)
• You can place stop above or below relevant support or resistance.
This may be recent candle highs or lows that would be expected to
act as a buffer from price and your stop placement.

Engulfing bar
• Stop is to be placed above high or low in most trades.
• Relevant support and resistance can be used for buffer from price
and your stop to increase possible risk reward for each trade.
In this case stop does not need to be placed above high or low but
just above logical support or resistance.
• Stop must always be placed above high or low when retrace entry
is taken to allow maximum trade moving space.
• Do Not use the 61% level for engulfing bar stops.
2 Bar Reversal
• Stops are to be placed above the high or low of 2 Bar in 90% of
trades.
• You can place the stop above or below the 61% of the 2 Bar
Reversal when the 2 Bar is abnormally large. (Use Fibonacci)
• You can place stop above or below relevant support or resistance.
This may be recent candle highs or lows that would be expected to
act as a buffer from price and your stop placement.

Pin Bar/Engulfing Bar Combo

• Stop is to be placed above high or low of Pin Bar/Engulfing Bar
Combo in most trades.
• Relevant support and resistance can be used for buffer from price
and your stop to increase possible risk reward for each trade. In
this case stop does not need to be placed above high or low but
just above logical support or resistance.
• Stop must always be placed above high or low when retrace entry
is taken to allow maximum trade moving space.
• You can place the stop above or below the 61% of the Pin Bar
when the Pin Bar is abnormally large. (Use Fibonacci)
Managing Trades with Price Action
Inside (Pin)Bar:
The Inside Bar signifies that the market is neither bullish nor bearish and that
control of the market hangs in the balance. The Inside Bar can be used as both
a reversal signal and as a continuation signal.

The Inside Bar can be used to tighten stops and protect capital or look
for bigger targets.

Once the Inside Bar has formed price has then go to break out one way or
another. A break out against your trade direction could signal an end to price
moving in your favour. If price breaks from the Inside bar favourably price
would most likely look to continue on in the original direction.

2 Bar Stop:
The 2 Bar Stop is a very simple formation. To use a 2 Bar Stop all you must do
is trail the stop above or below the previous 2 bars to the current sessions bar.

It is something to be used when you have taken profit on the first 2/3
of the trade and are just trying to rinse the last little bit of remaining
profit from the trade.

The best time to use the 2 Bar Stop is when a trade has been played with a
strong trend and price is trending along nicely. The 2 Bar Stop allows you to
give the market room to breathe enough for a potentially much bigger move
but at the same time locking in much needed profit.
Reverse Candle:
Reversal candles are candles such as Pin Bars and Engulfing Bars.
Reversals bars can also come in the form of candles that are not quite Pin
Bars, but candles that have large rejection wicks on them. These reversal
candles still show us enough however to suggest that the market could
possibly be turning on us.
Reversal candles are not so much about managing trades as about watching
for them and knowing when to exit our trades because of them.

Learning how to identify and manage the reversal candles can be the
key to minimizing the downside of a loss.

You can just cut the trade and be done with it happy with the profit, or you can
decide to bring the stop right up under the bearish rejection candle and see if
price does fall back lower.

When to Apply These Trade Management Techniques?

You need to be very wary of when tho apply these management techniques.

First support and resistance areas still need to be taken into account
and adhered to. Support and resistance areas are what control the market
and what the markets bounce off.

The best times to use the 2 Bar Stop and also the Inside Bar is when you are
in a trade that has gone a fair way in your favour. In this situation you would
most likely have taken a majority of the trade of the table and are only looking
to milk the last bit of profit.

The other situation you can use these trade management techniques is when
price is in between major support and resistance areas.
You can look to how price is behaving to protect your capital by tighten your
stop and protect your trade risk.