S o far we have discussed all essential aspects of this strategy which is necessary before we enter new trades. Now it is time to put everything together:
Trading Plan in a nutshell:
1. Analyze higher timeframe to identify long term trend
2. Analyze 233 Tick chart Price Action for Trend determination
3. Look for “Trade Setups” such as Breakouts, continuations
4. Look for “Setup Candles” ex. Pin bars, Engulfing Patterns etc.
5. Enter and exit trades as per system rules
Best Time to Trade:
The setups we looked in this chapter occur throughout the day and during all sessions. However if you start trading every Pin bar that occurs then it is not going to work. What’s important is to identify an appropriate time to trade. We only want to participate in the market when there is momentum and price is likely to move strongly in either direction.
Late US session and early Asian session, in my opinion, are the times you should avoid. The Market usually moves sideways and there is no point looking for trade setups. Only trade in these periods if there is momentum across the board on all pairs. Also keep an eye on news releases at all times. We do not want to open new trades 15-20 minutes before and after the news release.
Best time to trade starts from 1-2 hours before the London open till 1-2 hours into the US session. This is where the bulk of the movement takes place and a perfect time to look for trade setups.
In the next chapter we will look at managing trades in more ways.