Forex Swing Strategy
Based on EW 2.0
Market: Forex and some Commodities(Gold, Silver and Oil)
Holding Time: 1-2 weeks (Max. 10 market days)
Performance Measure: 20 Trades
Operating Hours: Tue-Fri
Broker: BrightWin
Risk Rules:
1. Max risk per trade: 1% Protect against risk of ruin
2. Max risk at any time: 2%
3. Max open risk-in trades: 2 pairs open
Psychological Rules:
Stop trading for 2 weeks if:
1. 4 consecutive full losses, or
2. 4% cumulative drawdown, or
1 week break if:
1. I took 10% in a week.
2. Taken 20 trades
Trade Management Rules:
1. If price didn’t move impulsively in the trade direction within 12 hrs, Close trade and wait.
Time rule
2. If pending trade was triggered and the next candlestick pattern (Pinbar/Engulfing) shows
a strong rejection, exit straight. Decision point is 2 candles. (Refer to 24-30 may 2020
USDCAD and USDMXN trade). I can still look to re-enter trade if pattern is still valid
3. Allow price to breath in the early stages of the trade. (Expect a Retest)
4. Manage aggressively late in the trade near TP. (Expected a Reversal)
5. Managed SL to be the last high or low.
6. Scale in if there are viable continuation patterns. Max twice.
7. Reset if price doesn't move as forecast twice.
At end of every month,
1. Thorough review of my trades and journal.
2. Remove all drawings and redo analysis from M1 down. (1-2 Hr)
Workflow
Weekends:
1. Update journal and reflection. (45-1hr)
2. Screen for top pairs (1-2hrs)
3. Check open trades for management actions. (15-30 mins)
4. Update journal on forecast and open trades. (15-30 mins)
Weekdays:
1. Monitor Top 6-8 pairs (Morning session, 1pm session, 8pm session)
2. Plan and execute trades
3. Update journal on actions and opportunities.
Analysis Process:
Weekends:
1. Action for every first weekend of the month or a losing week.
1. From M1 to D1, identify the most obvious area of value (Primarily S&R as Key
Levels and Trend-line structures)
2. Identify any obvious higher TF structure
3. Filter out pairs with price near Key Levels or Flat corrections between Key Levels
2. For the filtered pairs
1. On D1 and/or H4, identify the most obvious market structure using the impulse
and correction concept.
2. On H1 and/or H4, identify the any of the most obvious pattern
i. Continuation (Flat, Flags, Channel, Triangle)
ii. Reversal (Ending Diagonal/Wedge, Double top/bottom, H&S)
3. Scenario Forecast
1. Price near Key Level
i. If yet to break, (Reversal)
● Crawl
● Head & Shoulders/Inverted Head & Shoulders
● V- shape reversal
● Double Top/Bottom
ii. If Key Level is broken impulsively, (Continuation)
● Flat/Flag with tendency to retest the Key Level
2. Price between Key Levels (Continuation)
● Flag/Flat
4. Additional Confluence(Optional)
1. Check the RSI for confluence.
2. Check fib levels (Retracement 0.618, 0.5 and 0.382 / Extension 1, 1.272, 1.618)
for confluence.
Weekdays on H1, M15 (Entry Time Frame)
1. Only enter for breakouts based on any of the 2 entry setups.
2. Min. 6~8 hours after impulse before entry
Entry Setup
Flag/Flat or Wedge/Diagonal
1. For Wedge/Diagonal(Crawl) setups
1. At least 3 touches or 2 touches with the last wave forming a double top.
2. Near a key level
2. For Flat/Flag
1. At least 3 waves in the pattern or multiple candles of the same size.
2. Gentle angle (Max<45)
3. Between key levels or formed after breaking a key level.
Technical analysis tools
Area of Value(AOV)
1. Support and Resistance Levels
2. Supply and Demand Zones
3. Trendline and Pattern Structure
4. FlipZone
5. MA (21, 100)
6. Volume profile
7. Fibs levels (Retracement 0.618, 0.5, 0.382, Extension 1, 1.272, 1.618)
Entry Triggers
1. Pattern breakouts
2. TTW Price Alert and Price Action
3. Candlesticks pattern(engulfing and pinbar)
4. Limit order for retest after missing breakout
5. Breakout of retest.
Ideal Market conditions
1. Price trading near AOV
2. Corrective phase right after an impulsive phase
3. Well-defined pattern structure
4. Wave expectations met.
5. Avoid choppy conditions.
Examples of Pattern Breakout
