12 Trade Rules

Summary of Trade Rules

Rules No 1: Don't Forget Ur Trade Rules

Rules No 2: Trade Pullbacks With The Trend

Means:

• Never sell a low
• Never buy a high
• Buy at a test of higher low (pullback) in an uptrend.
• Sell at a test of lower high (pull-up) in an downtrend.

Rules No 3: Market Is Control by Sellers or Buyers?

• Buyers are in control as long as the market is making rising troughs.
• Sellers are in control as long as the market is making falling peaks

Rules No 4: Identify support 's' & resistance 'r'

• We believe new high (new resistance) will be found in uptrend; but as long as you see rising troughs being made; you might expect that new resistance to be taken out eventually. If you see price no more making new high (new resistance) - the price will go down.
• We believe new low (new support) will be found in downtrend; but as long as you see falling peaks being made; you might expect that new support to be taken out eventually. If you see price no more making new low (new support) - the price will go up.

Rules No 5: Identify trend in higher tf & trading tf

• We see the same identical 'price' patterns in all time frames (tf).
• In uptrend; we see series of rising peaks & rising troughs - as long as rising troughs being made; we expect that 'rising peaks' to be taken out eventually.
• In downtrend; we see series of falling peaks & falling troughs - as long as falling peaks being made; you might expect that falling troughs will be taken out eventually.
• The price is going down when it is no longer making new high and the price is going up when it is no longer making new low.
• If we see 'half signal' or 'incomplete signal' ; means the trend might reversed - but we don't want to predict until we see clear direction - so in this situation we will stay aside.

Rules No 6: Trend or Consolidation

• Significant retracement can be measures either by magnitude or duration.
• If price retrace 1/3 to 2/3 from previous moves - rising troughs & falling peaks is 'valid'.
• If price retrace less than 1/3 - the validity of peaks and trough is based on duration - at least 1/3 to2/3 of trend duration.
• New high or new low is considered 'valid' rising peaks and falling troughs.

Rules No 7: Identify Stop Loss

• In uptrend - the best to place stop loss is just below recent 'rising troughs'
• In downtrend - the best to place stop loss is just above recent 'falling peaks'

Rules No 8: Profits

• Lets the profit run
• Don't give back the profits
• In uptrend; we expect 'rising peaks' eventually will be taken out; and the best to place stop loss is just below recent 'rising troughs' - Rising Peaks mean Reward & just below recent 'Rising Troughs' mean Risk.
• In downtrend; we expect 'falling troughs' eventually will be taken out; and the best to place stop loss is just above recent ' falling peaks' - we will calculate R;R in every trade using this RULES

Rules No 9: Lot Size

• If you can't trade small lot size profitable; why do you assume you will be able to trade big lot size profitable?
• Main Trading Objective is to Preserve Trading Account

Rules No 10: Which Pair To Trade?

• Trade what speaks to you. Follow strict MM Calculator.

Rules 11: The best entry prices

• In uptrend; the best entry price is during the 'pullback' - the best entry is at high of previous bar high.
• In downtrend; the best entry price is during the 'pull-up' - the best entry is at low of previous bar low

Rules 12: Only Risk 2% risk per trade;  Never Risk more than 10% at Risk

THINGS TO TAKE NOTES

 In the past I may have held onto a trade because the market “is supposed to go” where I think it will go. Today if the market tells me my timing is off I will listen.