Thursday, March 24, 2011

KISS - My Simple Trading Methodology

The reason i want to design simple trading method it is because its easy for me to follow.  I don't want to complicate my chart with all 'fancy' indicators that give lots information but conflict information. Honestly speaking, sometimes its more difficult to make any 'decision' if we have a lots of information.

My strategy in trading is to trade the price pullbacks with trend. It simply means; if the price  direction is moving up, i will wait for pullback before enter the trade. I will never buy high. If the price direction is moving down, i will wait for pull-up before enter the trade. I will never sell low. This is the law of trading . The trading law said 'buy low and sell high'.

The price direction most of the times either moving up, down or 'i 'm not sure'. Can i determine the trend using price patterns? Yes, most of the time we can determine trend using price patterns. I can see identical 'price patterns' when the price direction is either up, down or undecided.

So if i can use 'price' to see direction, why should i use 'fancy' indicators to get the same information. Why i need to know the price direction? I will assume the price will continue in same direction until i 'm not sure about her direction.

How i define price direction either is up, down or 'not sure'? The trend is up if i see series of rising peaks & rising troughs and the price direction is down if i see series of falling peaks and falling troughs. I'm not sure 'direction' of trend if the price patterns show 'half sign' or 'incomplete' sign.

What is 'half sign'? In downtrend if the series of falling peaks and falling troughs are suddenly interrupted by rising peaks, then i call this as half sign means i need to wait for another sign of uptrend that is 'rising troughs' for evidence of 'uptrend'.

In uptrend if the series of rising peaks and rising troughs are suddenly interrupted by falling troughs - i need to wait for 'falling peaks' for evidence of 'downtrend. If consider price is 'undecided' to make decision in their direction. And if i'm not sure about the trend'.. i will stay aside. I don't want to trade with 'unsure' trend. I want to buy if the trend is up and i want to sell when the price is down.

Sometimes we see 'incomplete signal' - in downtrend series of falling peaks and falling troughs is interrupted by rising troughs - so we wait for present of rising peaks to confirm the trend. The reverse is true for uptrend.

How we determine 'valid ' peaks and troughs? This the skills we need to master.



  1. The main strategy is to trade pullback in uptrend and to trade 'pull-up' in downtrend. 
  2. The first step is to identify the trend in trading time frames.
  3. Focus on 'Daily' or 'H4' only, No Trend No Trade. 
  4. In second step, then we wait for 'valid pull-backs' or 'pull-up'. 
  5. Next, we identify buy zone or sell zone using seq fib number. 
  6. We wait for price to pullback or to pull-up  into 'trade zone'.
  7. Daily Trend - Candle Die then we decide, H4 Trend Candle Die at 1,5, 9 then decide.
  8. I want to see indecision candle die 'in' trade zone as confirmation to place stop order.
  9. Die candle will give where should i place my stop loss & calculate MM.
  10. Wait for entry to 'triggered'; if not adjust the stop order once the candle die.
  11. If the entry 'not triggered' - i will adjust entry, SL & MM based new 'die' candle.i


Bear in mind that 'method' is not the only 'important' part to success in trading. My mind and my money management skills is another 'important' part to success in trading. Good Luck.

Note: Just plot 'single' horizontal line in the middle of chart - if the price moving 'randomly' in upper and lower half - most of the time; the market is in sideways direction.

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