Lecture Notes: Trading Strategy for Low Risk, High Reward Trades

Introduction

• Focus: Winning low-risk, high-reward trades rather than just aiming for big wins.
• Common Misconception: Influencers often showcase big wins (5%, 10%, 100%), but sustainable trading involves a consistent strategy.
• Approach: Placed three trades over three weeks to demonstrate effective strategy.

Key Trading Strategy

Setting Up Levels

• Identify Key Levels: Analyze the chart for obvious levels (support and resistance).
  • Example: Price tested a level multiple times before breaking out.
• Expectation: Predict price movements between these levels to set up trades.

Time Frame Analysis

• 5-Minute Time Frame: Use this to identify supply and demand zones for better entry points.
• Supply Zones: Look for areas where price aggressively moves down; signals for short positions.
• Trade Entry: Wait for price to test supply zones to capitalize on risk-reward ratios.

Risk-Reward Calculations

• Importance: Central focus on achieving favorable risk-reward ratios.
• Stop Loss & Take Profit: Strategically place stop loss above recent highs and take profit at tested support levels.

Trade Examples

Trade 1

• Setup: Consolidation observed as a positive sign for a breakout.
• Result: Breakout yielded over 7% profit due to strategic entry point and level targeting.

Trade 2

• Higher Time Frame Analysis: Identified clear support and resistance levels.
• Demand Zones: Found zones indicating buying pressure; used for tight stop-loss and high take-profit.
• Indicators: Utilized EMA (200 period) and stochastic for confirmation.
• Result: Achieved over $10,000 in profit by targeting resistance areas.

Trade 3

• EMA & Demand Zones: Used EMA to confirm trend and demand zones for entry.
• Fibonacci Levels: Analyzed for discount pricing below the 50% line for better entry.
• Result: Achieved a 1:4 to 1:5 risk-reward ratio for substantial gains.

Evaluation of Strategy

• Pros: Effective for high reward trades when conditions align with strategy.
• Cons: Requires patience and multiple confirmations (confluences) to avoid losses.
• Broker Recommendation: Fintura for low spreads and commissions.

Conclusion

• Overall Results: $25,000 gain from $100,000 deposit.
• Caution: Strategy may lead to fewer trades and requires careful execution.
• Engagement: Encourages viewer interaction and joining a trading community.