Trading Plan and Strategy Guide

every single Trader that makes money does so because they have a solid and profitable trading plan a simple trading plan consists of your trading schedule the strategy or strategies that you're going to utilize when trading in any market and a solid risk management plan that keeps you safe and keeps your emotions at Bay while you're trading utilizing a trading plan like this is how any profitable Trader remains profitable and is how you will become a profitable Trader yourself so with that being the case in today's video I'm going to be revealing a full trading plan consisting of a trading schedule a rules-based trading strategy and a full risk management plan and if you are up for it then I have a challenge for you and that challenge is to utilize the exact trading plan you learned in this video on a demo account for the next 90 days and I not only think you'll be surprised but also very impressed with the results you see if you do in fact take that challenge so if learning a new trading plan you can utilize in markets every single day sounds good then go ahead and click that like button for me go ahead and subscribe if you are new and I'll be right back to completely break it [Music] down welcome back and let's go ahead and get started with the first part of our trading plan this is going to be what is your trading schedule when you're trading you're going to need a schedule because consistency is key in every part of trading you want a consistent strategy you're using you want a consistent risk management plan and you want a consistent schedule of when you're behind your computer actually placing trades now this is going to be a little bit different for day Traders than it is for swing Traders and I want to go over that now so if you are a day trader what you're going to do is pick a block of time between 2 and 8 hours however long you want to spend behind your computer and this needs to be a time where you don't have any other prior obligations you're not sleeping you're not at your full-time or part-time job you're not taking care of the kids whatever it is that you have that are prior obligations this needs to be actual free time that you can dedicate to trading every single day and obviously a trading schedule is pretty self-explanatory what you're going to do is throughout this block of time you've picked that's when you're going to utilize the strategy or strategies that you've decided to trade now the strategy I'm going to be sharing with you directly after this portion of the video is one that can be applied on any time frame that's why I wanted to point this out for day Traders but personally I'm a swing Trader so I'm going to tell you exactly how I utilize the trading plan you're learning today and the trading strategy you're going to learn in just a second as a swing Trader SL exactly what I do is this strategy for me again it can be utilized across all different time frames but what I use it on is the 4our chart and the strategy is based on the close of a candle that's our actual reason for entry for this particular strategy so with that being the case all I need to do is check charts every 4 hours at the close of a 4-Hour candle that is my literal trading schedule for this trading plan I normally try to make sure that I give myself at least 5 minutes before the close of a 4-Hour candle to go look at charts and this is what I utilize for 95% of the trading strategies that I personally trade so my actual trading schedule Beyond just this specific trading plan you're learning in this video is to check charts every four hours and as a swing Trader this may be something you want to look into now the drawbacks of day trading is that if you do have a full-time job or a lot of other prior obligations then finding a block of time between 2 and 8 hours might be a little bit difficult and swing trading on a higher time frame like the 4H hour or daily chart might be a better option for you if those are the obligations that you have that you have to stick to working around those is what swing trading is really good at and that is exactly how you would set up the first part of your trading plan which is just scheduling when you're going to trade now the second part of your trading plan needs to be your actual trading strategy the reason that you're getting into the market and so what we're going to do is discuss a full trading strategy right now but I think it's important to note here that you don't have to utilize just one trading strategy but it is important to Master One first and then build on that with other strategies as you get better as a Trader and as you learn new strategies but trying to learn multiple strategies at once to apply in a trading plan is going to get really confusing and it's not something you want to do trust me I learned that the hard way so focus on one at first and the trading strategy you're about to learn is the one I want you to utilize if you choose to accept the challenge that I proposed earlier in this video now a trading strategy itself is just a set of rules that we utilize when we're placing trades so let me walk you through the rules of this strategy here on the Whiteboard for this strategy we're going to be looking for reversals and what we're going to utilize is the 50 period exponential moving average to help us with that so here on the chart is the 50 period moving average what we want to see with this strategy is price has been below the 50 period exponential moving average and then we want to see a break of that moving average after this break we want the first level of resistance to be broken so this is what I call a one two three move it's just when we have an impulsive move which is one followed by two which is the pullback followed by three which is another move that breaks Above This resistance level and what we're using this strategy to do is to capture the reversal in Trend if we were down here trading below the 50 EMA we were in a downtrend the first clue that we could possibly see a reversal is price making this impulsive move that breaks above o the 50 EMA the next clue we have that this reversal could stick and create a brand new uptrend that continues higher is the break of this resistance level now these two things are what we're utilizing as evidence that we could see a complete reversal in this market and what we're using this strategy to capture is the earliest stage of this reversal with enough evidence to still have a high probability of a successful trade so that evidence yet again being the cross of the 50 EMA and the break of a resistance level and then we're going to utilize this previous resistance as our area of value to place a Buy trade from right here and the reason we're doing that is because this sets us up with an accurate trading opportunity because of the evidence we just looked at and also gives us the opportunity to capture what could be the reversal of this trend and markets going higher so what this does is it makes an accurate opportunity where we can get large targets because we're capturing this reversal at a very early stage now there are a couple of other rules for this strategy but I wanted to give you the gist of it here on the Whiteboard right now though we'll go down to some real charts and take a look at a full example of this entire trading strategy so here we are on the pound Aussie this is actually a trade we placed and sent out to all the members of the University last week I'll put a screenshot of that right over here and what do you notice here well as you can see we were below the 50 EMA which is my blue line here we were trading below that moving average until price broke above it the first major pullback we have is right here for me now I know an argument can be made that this was a pullback or that this was a pullback for me I'm looking for a more major pullback and these two areas would just be chopped and there's going to be subjectivity and a bit of discretion in any strategy that you trade and pointing out these things is just something you'll get better at with experience but for me this is how I saw this trade price breaks above our 50 EMA which is rule number one step number one for identifying this reversal situation we then have a pullback and what a break Above This resistance level so at this point we have evidence that we could see a possible reversal to the upside based on our previous downtrend and based on the evidence we see with our one two three move going above the 50 period exponential moving average at this point I mark off this previous resistance level something like this and you guessed it at this point I'm waiting for a pull back into this level now as another added rule to help add some accuracy to this this level must have been tested multiple times looking left as we can see we have another test here here and here so obviously this level's been tested multiple times that's another rule we have and I will actually write out all these rules so you can screenshot them when we're done going over this bullish example but at this point we have broken above our level of resistance it has been tested multiple times it's the first major level of resistance above the 50 EMA to be broken and this is giving us all the evidence we need to accurately predict that a reversal could happen now at this point as I said I'd be waiting for a pullback into this area and here we have that pullback now at the point of getting into this Zone after all my other conditions are met which is what we just talked about everything we just discussed would all be conditions after having conditions laid out for a strategy you want your actual reason you're going to click the buy button what is your reason for entry and for me it's buying pressure and I classify that buying pressure as an engulfing candle a hammer candle or what I call a close above candle so at this point after pulling back into this Zone that's what I'm looking for is buying pressure based on a Candlestick pattern so we push the market forward you'll see this candle this is an engulfing bar and this is the actual reason for entry so at this point I would set up my trade these are all 4H hour candles so as I said about scheduling earlier this is when I would check the chart see my Candlestick pattern happening place the actual order and the way that I utilize stops and targets is by placing a stop loss below the swing low after this pullback and this buying pressure happens and for a Target I personally utilize the next level of structure that will be hit which for me was right up here so this is exactly what a bullish setup using this strategy would look like and the market cooperated with our analysis and ended up pushing higher and eventually hitting our Targets on this trade so that should have given you everything you need to notti to spot a bullish example of this setup but just in case you're brand new and you don't know exactly what a close above candle is let me explain that really quickly a close above candle is exactly what it sounds like it is a candle that closes above the high of the previous candle that would be a close above candle for me and in terms of engulfing in Hammer candles we have lessons on those throughout the channel so feel free to check those out but now let's move on and take a look at a bearish version of this setup so a bearish version of the strategy is just the opposite of a bullish version let's take a look at that right now so in a bearish version of the strategy we're still going to be utilizing the 50 period exponential moving average so this is going to be that moving average and then it falls and what price is going to be doing for a bearish example of this is price should be trending higher above the 50 period moving average and then begin to Trend lower and break below a support level so this is the same one two three move just upside down this being our impulsive move down one our pullback two and our next move that breaks below support being number three so with this being the case after this has happened the difference is instead of looking for a pullback to resistance obviously since we're going bearish we're looking for a pullback into this support level this has to be the initial support level that was broken in this new found downtrend and again all of these combined for evidence that this uptrend is over and that we could see a new downtrend start giving us the ability to take it advantage of that quickly yet with enough evidence to be an accurate trading opportunity and this new found downtrend should provide us with some really good targets and a really good reward to risk ratio on these trades so now that you have an idea of a bearish example of this setup let's go down to some charts and take a look at a real example of a bearish setup using this strategy here we are on the Aussie cada chart and this is also a trade that I placed and sent out to all the members of the University earlier last week and you can see an example of that right here what I want you to do is try to spot the one two3 move so on this chart what did we have we had prices trading above the 50 EMA then what happened then we had a break of the 50 EMA followed by a pullback and then a break of that pullback a break of that level of support right here so this is the evidence showing us that we could see a possible reversal in this market and possibly see the start of a downtrend the next thing we need to do is point out our level of structure support that would look something like this and I have to ask myself was this level tested multiple times I would count this as a test this as a test this is a test and obviously a few other tests looking left so yes we have an area that's been tested multiple times and it is in fact the first level of support broken since the break of the 50 EMA next up I want to see a pullback into this area and a Candlestick pattern showing me selling pressure here we have that pullback into our area the next thing I want to see is a Candlestick pattern that shows selling pressure something like an engulfing pattern that's bearish a shooting star pattern with a long Wick to the top side or a close below candle so let's go ahead and click play and see what happens here we have this large red candle now this was the reason I actually entered into the trade all of my conditions are met and now we've pulled back to my zone I created and we have just created this close below candle so for a close below candle similar to a close above candle what we're looking for is the close of our entry candle to be below the low of the previous candle that qualifies as a close below candle for me so again this is the actual entry reason why I'm pressing the sell button my stop loss is going to go above the swing high before the selling pressure candle and for a Target I'm looking left at the next level of structure that price will hit it's going to be one of these two levels and for this particular trade I actually took off targets right here at this level you see so that is exactly what a bearish version of this setup would look like and if I click play yet again the market did cooperate with this analysis for us this time after a lot of consolidation as you can see we were in this trade for a very long time but eventually we did in fact push down and I did hit those two to one Targets on this trade before we dive into the risk management plan for this full trading plan here are the rules for a bearish version of the setup that I forgot to put on the scre screen if you want to screenshot that go ahead and pause the video and do so but also I want to talk very briefly about the purpose of a strategy because I know whenever I was a beginner I was searching for a strategy that would be like a holy grail and would win every trade and I know that I just showed you two winning trades but that is literally just because these were the last two trades that I had utilizing this strategy in my own trading the truth is this strategy comes with wins and losses just like any other strategy that you ever never learned will and the purpose of a strategy is to give you a statistic advantage that plays out over time it's not about being right all the time I wish that was the case I wish there was a strategy that would do that but the truth is that doesn't exist what we have to deal with as Traders is a strategy that wins and loses we have to prepare ourselves for those losses with risk management and trading psychology having a good trading mindset and understanding our statistic advantage and then we exploit that statistic Advantage by taking a trade based on our strategy every time it happens and to give you an example of what that statistic Advantage would look like for me personally the strategy you just learned gives me a slightly above 50% chance to win my win rates 53% on average based on all the trades I've taken and on average based on the big wins the break even trades the small wins and the losses I get around a 1.8 to one reward to risk ratio now this is a statistic Advantage if I play lay this out over the course of a 100 or more trades I'm going to make money utilizing this now again this is with a 53% win rate meaning that I'm going to have losses too nearly half of my trades are going to be losses and this is what a statistic Advantage is and what you have to deal with in terms of a strategy as a Trader you have to deal with those losses and your ability to deal with those losses is what's going to make the difference between you either giving up on trading using poor risk management and blowing your account switching strategies all the time because you don't have a good trading mindset and it'll be the difference between that and you becoming a profitable Trader if you want to become a profitable Trader you're going to have to understand how to deal with a 53% win rate how to deal with losing trades and something that helps a lot with dealing with losing trades is risk management which we're going to talk about right now but first I wanted to make sure that if you're a beginner or a struggling Trader you realize what a strategy is it's not a holy grill that helps you win every single trade you place it's a statistic advantage AG that works out over time and provides us with a money-making Edge over the market so I'm going to be sharing my personal risk management plan with you a little bit later in the video but right now I want to talk about why risk management is so important as I talked about in the previous section of this video we're not trading based on knowing 100% that we're going to be right about a specific trade we're trading based on a statistic advantage that plays out over time let me give you an example of what I mean if I have a strategy like the one we just discussed if has close to a 50% win rate at a 50% win rate you are very likely to suffer from 7 to 10 losses in a row what I mean by that is if you trade this strategy correctly over a 100 trades you're very likely to experience between seven and 10 losses in a row at some point so with that being the case our risk management plan needs to be in place it needs to be a number small enough for us to be able to withstand these losses one withstand these losses without blowing our account but to just as importantly withstand these losses without becoming emotional about our trades so let me give you another example if we are trading this strategy and personally I trade based on a certain percentage risk of my total account value and if I'm trading based on let's say a 2% risk and I see 10 losses in a row what does that mean that means that I will have what is known as a 20% draw down on a 10 trade losing streak now what I see all too many beginner and struggling Traders do and this is one of the biggest mistakes beginner and struggling Traders make when it comes to risk management is risk a ton of their account they're risking 10% or more of their total account value on each trade now what if you're doing this and you have a 10 trade losing streak which is completely normal for a strategy that wins about 50% of the time if that's the case your account is gone and if you have a seven trade loser losing Street and you lose 70% of your account value you're going to be so emotional about that that you probably won't even continue trading and if you do you are going to start making some detrimental mistakes in your trading you're going to start switching strategies moving your stop up and down moving your target up and down you're going to start placing trades based on fear and greed and not based on a statistic advantage or a strategy like we just discussed in the last section so because we have a statistic advantage and we don't know 100% accurately if a particular trade is going to win or when we're going to have a 7 to 10 trade losing streak we must utilize good risk management and bad risk management is the core cause of nearly every trading mistake that beginner and struggling Traders are making now the second point of risk management that I hardly ever talk about here on the channel for good reason and I'll explain that in a second is you don't always or forever have to risk a tiny amount of your account when beginners come into the market and this was me when I started too so don't think I'm calling you out I'm not we look at trading as a way to get rich as fast as possible and one of the main components of being able to make money quickly is the amount that you risk to give you an example of that let's say I have a 2:1 reward to risk ratio on a trade that I'm placing well if I'm risking 1% what do I stand to make on this trade obviously that's going to be 2% now let's take the same scenario and the same two two to one reward to risk on a trade in this case this is one this is two what if I'm risking 10% well if I risk 10% on the same exact trade then I stand to possibly make a 20% increase in my total account value so obviously for beginner and struggling Traders trying to get rich as fast as possible this option looks way better this is way more enticing you're telling me I can make 20% on one trade whereas it would take me 10 of these to do it and I completely understand that but here's the truth at the beginning of your trading career is the time you are most likely to make trading mistakes is the time you are most likely to blow your entire account so I'm not saying that you always have to risk 1% or less you always have to risk 2% or less the reason that I talk about that constantly on this channel is because if you are a beginner or a struggling Trader which is who I would assume primarily watches these videos you you need to be risking a tiny amount of your account because you have a much higher likelihood of blowing your account or making trading mistakes now and let me be let me be very clear about this there will be a point in time when if you're trading a small account and you're looking to grow it as fast as you possibly can you're going to want to risk more than 1% per trade when you are very good at trading let me repeat that when you are very good at trading and not before that then you'll be able to make the decision of how much you want to risk and make it the number that you choose you can make it 5% or whatever you choose at the time that you're really good at trading you won't be seeking advice from someone on YouTube about how much you should risk you're going to be independent one day if you actually become a profitable Trader and at that point once you've seen that you can be profitable over let's say a six-month period with a small risk percentage you can decide to raise that risk percentage which will help you grow that small account much much faster but again you need to be very good at trading when you do this because if you are still a beginner or struggling Trader and you choose to use a risk management plan that risks a ton of your account per trade then you are much much more likely to blow your entire account or lose so much you completely give up on trading than you are to make a lot of money and I think that is an important lesson about growing a small account that I hardly ever hear anyone talking about in order to grow a small account you're going to have to do so with a decent size risk but if you're trying to do that and you don't know how to trade yet you're just going to blow your account so first step learn how to trade then decide if you want to increase your risk a bit to help make building that small account go a little faster now let's talk about the physical way that we manage risk so for me I risk a certain percentage of my account value on each trade that I place and this is much easier than it sounds because there's calculators all over the Internet there's one on myfxbook that I used to use before I utiliz trading views calculator and I'll put a link for that on the screen but the way I do this is by utilizing a stop loss that is a certain amount of Pips and then I adjust my position size after I know where my stop- loss is to ensure that if price pushes down and hits my stop- loss I will lose let's say 1% or whatever you decide to risk of my total account value that all you do is just adjust the position size once you decide what your stop loss is going to be and again they make calculators that make this very easy and trading view with the brokerage I use oanda they actually do this automatically for you so I don't even have to go to a third party calculator but the process of utilizing a risk management plan is just by utilizing a stop-loss and manipulating the position size you use to equal a small percentage of your total account value now in terms of a risk management plan these numbers are going to be extremely personal and they're things that you'll have to decide on your own no one can tell you what your personal risk tolerance is it's something you have to decide but this is my risk management plan it's extremely simple in terms of risk per trade all this means is exactly what it sounds like this is the amount in percentage of my account value that I'm willing to risk on every trade that I place I'm always risking between 1% and 2% of my total account value depending on the trade and other factors that I'm not going to dive into right now the second part of my risk management plan is called overall exposure essentially this is just how many trades can I be in at one time because if some crazy news event or world event happens and I end up losing all the trades I'm in I don't want to have 100% of my account value at risk right instead I want to have a limit on my total exposure that I am exposed into the market with for me that number is 10% meaning if I am looking at risking 2% per trade then that means I can be in five trades at once which is going to give me an overall exposure of 10% and that is my entire risk management plan again I know it's simple but essentially the these two things are what keep me out of my emotions when I'm placing trades and keeps me from making any trading mistakes because utilizing this risk management plan keeps me from being emotional about trades at all and I promise you if you create a risk management plan that you are comfortable with it will keep a lot of the emotions you feel while you're trading right now out of the way and allow you to actually have a successful trading career instead of making you commit a ton of trading mistakes and again please don't feel like I'm pointing anyone out the reason I'm showing you this is because these are all mistakes I made in the past and I want to help you to not make those mistakes and not lose unnecessary amounts of money not make unnecessary trading mistakes so instead of you making those mistakes just learn from mine much easier so I'll try to put on the screen all the different sections that were in this video the scheduling the trading strategy itself along with the risk management feel free to take a second pause the video and screenshot it if you would like to do that and use that for reference just a couple of key points Before I Let You Go Remember The Challenge from the beginning of the video take this exact trading plan trade it in a demo account for 90 days and just see what the results are what do you have to lose now remember I said trade this in a demo account do not trade this with live money right now if you are seeking advice on YouTube then I promise you you're not ready to trade with a live account you'll know when you are but for the purpose of this challenge it will be great practice for you following a trading plan to take what you've learned in this video and try to use it on a dembo account for the next 90 days with minimal mistakes I hope you got value out of this video if you did go ahead and click that like button for me go ahead and subscribe if you are new and you enjoyed it make sure to comment if you made it to the end and I'll try to like every comment that says they made it to the end I wish you the best of luck on all your future trades hope you trade green and I'll talk to you in the next video

every single Trader that makes money does so because they have a solid and profitable trading plan a simple trading plan consists of your trading schedule the strategy or strategies that you&#39;re going to utilize when trading in any market and a solid risk management plan that keeps you safe and keeps your emotions at Bay while you&#39;re trading utilizing a trading plan like this is how any profitable Trader remains profitable and is how you will become a profitable Trader yourself so with that being the case in today&#39;s video I&#39;m going to be revealing a full trading plan consisting of a trading schedule a rules-based trading strategy and a full risk management plan and if you are up for it then I have a challenge for you and that challenge is to utilize the exact trading plan you learned in this video on a demo account for the next 90 days and I not only think you&#39;ll be surprised but also very impressed with the results you see if you do in fact take that challenge so if learning a new trading plan you can utilize in markets every single day sounds good then go ahead and click that like button for me go ahead and subscribe if you are new and I&#39;ll be right back to completely break it [Music] down welcome back and let&#39;s go ahead and get started with the first part of our trading plan this is going to be what is your trading schedule when you&#39;re trading you&#39;re going to need a schedule because consistency is key in every part of trading you want a consistent strategy you&#39;re using you want a consistent risk management plan and you want a consistent schedule of when you&#39;re behind your computer actually placing trades now this is going to be a little bit different for day Traders than it is for swing Traders and I want to go over that now so if you are a day trader what you&#39;re going to do is pick a block of time between 2 and 8 hours however long you want to spend behind your computer and this needs to be a time where you don&#39;t have any other prior obligations you&#39;re not sleeping you&#39;re not at your full-time or part-time job you&#39;re not taking care of the kids whatever it is that you have that are prior obligations this needs to be actual free time that you can dedicate to trading every single day and obviously a trading schedule is pretty self-explanatory what you&#39;re going to do is throughout this block of time you&#39;ve picked that&#39;s when you&#39;re going to utilize the strategy or strategies that you&#39;ve decided to trade now the strategy I&#39;m going to be sharing with you directly after this portion of the video is one that can be applied on any time frame that&#39;s why I wanted to point this out for day Traders but personally I&#39;m a swing Trader so I&#39;m going to tell you exactly how I utilize the trading plan you&#39;re learning today and the trading strategy you&#39;re going to learn in just a second as a swing Trader SL exactly what I do is this strategy for me again it can be utilized across all different time frames but what I use it on is the 4our chart and the strategy is based on the close of a candle that&#39;s our actual reason for entry for this particular strategy so with that being the case all I need to do is check charts every 4 hours at the close of a 4-Hour candle that is my literal trading schedule for this trading plan I normally try to make sure that I give myself at least 5 minutes before the close of a 4-Hour candle to go look at charts and this is what I utilize for 95% of the trading strategies that I personally trade so my actual trading schedule Beyond just this specific trading plan you&#39;re learning in this video is to check charts every four hours and as a swing Trader this may be something you want to look into now the drawbacks of day trading is that if you do have a full-time job or a lot of other prior obligations then finding a block of time between 2 and 8 hours might be a little bit difficult and swing trading on a higher time frame like the 4H hour or daily chart might be a better option for you if those are the obligations that you have that you have to stick to working around those is what swing trading is really good at and that is exactly how you would set up the first part of your trading plan which is just scheduling when you&#39;re going to trade now the second part of your trading plan needs to be your actual trading strategy the reason that you&#39;re getting into the market and so what we&#39;re going to do is discuss a full trading strategy right now but I think it&#39;s important to note here that you don&#39;t have to utilize just one trading strategy but it is important to Master One first and then build on that with other strategies as you get better as a Trader and as you learn new strategies but trying to learn multiple strategies at once to apply in a trading plan is going to get really confusing and it&#39;s not something you want to do trust me I learned that the hard way so focus on one at first and the trading strategy you&#39;re about to learn is the one I want you to utilize if you choose to accept the challenge that I proposed earlier in this video now a trading strategy itself is just a set of rules that we utilize when we&#39;re placing trades so let me walk you through the rules of this strategy here on the Whiteboard for this strategy we&#39;re going to be looking for reversals and what we&#39;re going to utilize is the 50 period exponential moving average to help us with that so here on the chart is the 50 period moving average what we want to see with this strategy is price has been below the 50 period exponential moving average and then we want to see a break of that moving average after this break we want the first level of resistance to be broken so this is what I call a one two three move it&#39;s just when we have an impulsive move which is one followed by two which is the pullback followed by three which is another move that breaks Above This resistance level and what we&#39;re using this strategy to do is to capture the reversal in Trend if we were down here trading below the 50 EMA we were in a downtrend the first clue that we could possibly see a reversal is price making this impulsive move that breaks above o the 50 EMA the next clue we have that this reversal could stick and create a brand new uptrend that continues higher is the break of this resistance level now these two things are what we&#39;re utilizing as evidence that we could see a complete reversal in this market and what we&#39;re using this strategy to capture is the earliest stage of this reversal with enough evidence to still have a high probability of a successful trade so that evidence yet again being the cross of the 50 EMA and the break of a resistance level and then we&#39;re going to utilize this previous resistance as our area of value to place a Buy trade from right here and the reason we&#39;re doing that is because this sets us up with an accurate trading opportunity because of the evidence we just looked at and also gives us the opportunity to capture what could be the reversal of this trend and markets going higher so what this does is it makes an accurate opportunity where we can get large targets because we&#39;re capturing this reversal at a very early stage now there are a couple of other rules for this strategy but I wanted to give you the gist of it here on the Whiteboard right now though we&#39;ll go down to some real charts and take a look at a full example of this entire trading strategy so here we are on the pound Aussie this is actually a trade we placed and sent out to all the members of the University last week I&#39;ll put a screenshot of that right over here and what do you notice here well as you can see we were below the 50 EMA which is my blue line here we were trading below that moving average until price broke above it the first major pullback we have is right here for me now I know an argument can be made that this was a pullback or that this was a pullback for me I&#39;m looking for a more major pullback and these two areas would just be chopped and there&#39;s going to be subjectivity and a bit of discretion in any strategy that you trade and pointing out these things is just something you&#39;ll get better at with experience but for me this is how I saw this trade price breaks above our 50 EMA which is rule number one step number one for identifying this reversal situation we then have a pullback and what a break Above This resistance level so at this point we have evidence that we could see a possible reversal to the upside based on our previous downtrend and based on the evidence we see with our one two three move going above the 50 period exponential moving average at this point I mark off this previous resistance level something like this and you guessed it at this point I&#39;m waiting for a pull back into this level now as another added rule to help add some accuracy to this this level must have been tested multiple times looking left as we can see we have another test here here and here so obviously this level&#39;s been tested multiple times that&#39;s another rule we have and I will actually write out all these rules so you can screenshot them when we&#39;re done going over this bullish example but at this point we have broken above our level of resistance it has been tested multiple times it&#39;s the first major level of resistance above the 50 EMA to be broken and this is giving us all the evidence we need to accurately predict that a reversal could happen now at this point as I said I&#39;d be waiting for a pullback into this area and here we have that pullback now at the point of getting into this Zone after all my other conditions are met which is what we just talked about everything we just discussed would all be conditions after having conditions laid out for a strategy you want your actual reason you&#39;re going to click the buy button what is your reason for entry and for me it&#39;s buying pressure and I classify that buying pressure as an engulfing candle a hammer candle or what I call a close above candle so at this point after pulling back into this Zone that&#39;s what I&#39;m looking for is buying pressure based on a Candlestick pattern so we push the market forward you&#39;ll see this candle this is an engulfing bar and this is the actual reason for entry so at this point I would set up my trade these are all 4H hour candles so as I said about scheduling earlier this is when I would check the chart see my Candlestick pattern happening place the actual order and the way that I utilize stops and targets is by placing a stop loss below the swing low after this pullback and this buying pressure happens and for a Target I personally utilize the next level of structure that will be hit which for me was right up here so this is exactly what a bullish setup using this strategy would look like and the market cooperated with our analysis and ended up pushing higher and eventually hitting our Targets on this trade so that should have given you everything you need to notti to spot a bullish example of this setup but just in case you&#39;re brand new and you don&#39;t know exactly what a close above candle is let me explain that really quickly a close above candle is exactly what it sounds like it is a candle that closes above the high of the previous candle that would be a close above candle for me and in terms of engulfing in Hammer candles we have lessons on those throughout the channel so feel free to check those out but now let&#39;s move on and take a look at a bearish version of this setup so a bearish version of the strategy is just the opposite of a bullish version let&#39;s take a look at that right now so in a bearish version of the strategy we&#39;re still going to be utilizing the 50 period exponential moving average so this is going to be that moving average and then it falls and what price is going to be doing for a bearish example of this is price should be trending higher above the 50 period moving average and then begin to Trend lower and break below a support level so this is the same one two three move just upside down this being our impulsive move down one our pullback two and our next move that breaks below support being number three so with this being the case after this has happened the difference is instead of looking for a pullback to resistance obviously since we&#39;re going bearish we&#39;re looking for a pullback into this support level this has to be the initial support level that was broken in this new found downtrend and again all of these combined for evidence that this uptrend is over and that we could see a new downtrend start giving us the ability to take it advantage of that quickly yet with enough evidence to be an accurate trading opportunity and this new found downtrend should provide us with some really good targets and a really good reward to risk ratio on these trades so now that you have an idea of a bearish example of this setup let&#39;s go down to some charts and take a look at a real example of a bearish setup using this strategy here we are on the Aussie cada chart and this is also a trade that I placed and sent out to all the members of the University earlier last week and you can see an example of that right here what I want you to do is try to spot the one two3 move so on this chart what did we have we had prices trading above the 50 EMA then what happened then we had a break of the 50 EMA followed by a pullback and then a break of that pullback a break of that level of support right here so this is the evidence showing us that we could see a possible reversal in this market and possibly see the start of a downtrend the next thing we need to do is point out our level of structure support that would look something like this and I have to ask myself was this level tested multiple times I would count this as a test this as a test this is a test and obviously a few other tests looking left so yes we have an area that&#39;s been tested multiple times and it is in fact the first level of support broken since the break of the 50 EMA next up I want to see a pullback into this area and a Candlestick pattern showing me selling pressure here we have that pullback into our area the next thing I want to see is a Candlestick pattern that shows selling pressure something like an engulfing pattern that&#39;s bearish a shooting star pattern with a long Wick to the top side or a close below candle so let&#39;s go ahead and click play and see what happens here we have this large red candle now this was the reason I actually entered into the trade all of my conditions are met and now we&#39;ve pulled back to my zone I created and we have just created this close below candle so for a close below candle similar to a close above candle what we&#39;re looking for is the close of our entry candle to be below the low of the previous candle that qualifies as a close below candle for me so again this is the actual entry reason why I&#39;m pressing the sell button my stop loss is going to go above the swing high before the selling pressure candle and for a Target I&#39;m looking left at the next level of structure that price will hit it&#39;s going to be one of these two levels and for this particular trade I actually took off targets right here at this level you see so that is exactly what a bearish version of this setup would look like and if I click play yet again the market did cooperate with this analysis for us this time after a lot of consolidation as you can see we were in this trade for a very long time but eventually we did in fact push down and I did hit those two to one Targets on this trade before we dive into the risk management plan for this full trading plan here are the rules for a bearish version of the setup that I forgot to put on the scre screen if you want to screenshot that go ahead and pause the video and do so but also I want to talk very briefly about the purpose of a strategy because I know whenever I was a beginner I was searching for a strategy that would be like a holy grail and would win every trade and I know that I just showed you two winning trades but that is literally just because these were the last two trades that I had utilizing this strategy in my own trading the truth is this strategy comes with wins and losses just like any other strategy that you ever never learned will and the purpose of a strategy is to give you a statistic advantage that plays out over time it&#39;s not about being right all the time I wish that was the case I wish there was a strategy that would do that but the truth is that doesn&#39;t exist what we have to deal with as Traders is a strategy that wins and loses we have to prepare ourselves for those losses with risk management and trading psychology having a good trading mindset and understanding our statistic advantage and then we exploit that statistic Advantage by taking a trade based on our strategy every time it happens and to give you an example of what that statistic Advantage would look like for me personally the strategy you just learned gives me a slightly above 50% chance to win my win rates 53% on average based on all the trades I&#39;ve taken and on average based on the big wins the break even trades the small wins and the losses I get around a 1.8 to one reward to risk ratio now this is a statistic Advantage if I play lay this out over the course of a 100 or more trades I&#39;m going to make money utilizing this now again this is with a 53% win rate meaning that I&#39;m going to have losses too nearly half of my trades are going to be losses and this is what a statistic Advantage is and what you have to deal with in terms of a strategy as a Trader you have to deal with those losses and your ability to deal with those losses is what&#39;s going to make the difference between you either giving up on trading using poor risk management and blowing your account switching strategies all the time because you don&#39;t have a good trading mindset and it&#39;ll be the difference between that and you becoming a profitable Trader if you want to become a profitable Trader you&#39;re going to have to understand how to deal with a 53% win rate how to deal with losing trades and something that helps a lot with dealing with losing trades is risk management which we&#39;re going to talk about right now but first I wanted to make sure that if you&#39;re a beginner or a struggling Trader you realize what a strategy is it&#39;s not a holy grill that helps you win every single trade you place it&#39;s a statistic advantage AG that works out over time and provides us with a money-making Edge over the market so I&#39;m going to be sharing my personal risk management plan with you a little bit later in the video but right now I want to talk about why risk management is so important as I talked about in the previous section of this video we&#39;re not trading based on knowing 100% that we&#39;re going to be right about a specific trade we&#39;re trading based on a statistic advantage that plays out over time let me give you an example of what I mean if I have a strategy like the one we just discussed if has close to a 50% win rate at a 50% win rate you are very likely to suffer from 7 to 10 losses in a row what I mean by that is if you trade this strategy correctly over a 100 trades you&#39;re very likely to experience between seven and 10 losses in a row at some point so with that being the case our risk management plan needs to be in place it needs to be a number small enough for us to be able to withstand these losses one withstand these losses without blowing our account but to just as importantly withstand these losses without becoming emotional about our trades so let me give you another example if we are trading this strategy and personally I trade based on a certain percentage risk of my total account value and if I&#39;m trading based on let&#39;s say a 2% risk and I see 10 losses in a row what does that mean that means that I will have what is known as a 20% draw down on a 10 trade losing streak now what I see all too many beginner and struggling Traders do and this is one of the biggest mistakes beginner and struggling Traders make when it comes to risk management is risk a ton of their account they&#39;re risking 10% or more of their total account value on each trade now what if you&#39;re doing this and you have a 10 trade losing streak which is completely normal for a strategy that wins about 50% of the time if that&#39;s the case your account is gone and if you have a seven trade loser losing Street and you lose 70% of your account value you&#39;re going to be so emotional about that that you probably won&#39;t even continue trading and if you do you are going to start making some detrimental mistakes in your trading you&#39;re going to start switching strategies moving your stop up and down moving your target up and down you&#39;re going to start placing trades based on fear and greed and not based on a statistic advantage or a strategy like we just discussed in the last section so because we have a statistic advantage and we don&#39;t know 100% accurately if a particular trade is going to win or when we&#39;re going to have a 7 to 10 trade losing streak we must utilize good risk management and bad risk management is the core cause of nearly every trading mistake that beginner and struggling Traders are making now the second point of risk management that I hardly ever talk about here on the channel for good reason and I&#39;ll explain that in a second is you don&#39;t always or forever have to risk a tiny amount of your account when beginners come into the market and this was me when I started too so don&#39;t think I&#39;m calling you out I&#39;m not we look at trading as a way to get rich as fast as possible and one of the main components of being able to make money quickly is the amount that you risk to give you an example of that let&#39;s say I have a 2:1 reward to risk ratio on a trade that I&#39;m placing well if I&#39;m risking 1% what do I stand to make on this trade obviously that&#39;s going to be 2% now let&#39;s take the same scenario and the same two two to one reward to risk on a trade in this case this is one this is two what if I&#39;m risking 10% well if I risk 10% on the same exact trade then I stand to possibly make a 20% increase in my total account value so obviously for beginner and struggling Traders trying to get rich as fast as possible this option looks way better this is way more enticing you&#39;re telling me I can make 20% on one trade whereas it would take me 10 of these to do it and I completely understand that but here&#39;s the truth at the beginning of your trading career is the time you are most likely to make trading mistakes is the time you are most likely to blow your entire account so I&#39;m not saying that you always have to risk 1% or less you always have to risk 2% or less the reason that I talk about that constantly on this channel is because if you are a beginner or a struggling Trader which is who I would assume primarily watches these videos you you need to be risking a tiny amount of your account because you have a much higher likelihood of blowing your account or making trading mistakes now and let me be let me be very clear about this there will be a point in time when if you&#39;re trading a small account and you&#39;re looking to grow it as fast as you possibly can you&#39;re going to want to risk more than 1% per trade when you are very good at trading let me repeat that when you are very good at trading and not before that then you&#39;ll be able to make the decision of how much you want to risk and make it the number that you choose you can make it 5% or whatever you choose at the time that you&#39;re really good at trading you won&#39;t be seeking advice from someone on YouTube about how much you should risk you&#39;re going to be independent one day if you actually become a profitable Trader and at that point once you&#39;ve seen that you can be profitable over let&#39;s say a six-month period with a small risk percentage you can decide to raise that risk percentage which will help you grow that small account much much faster but again you need to be very good at trading when you do this because if you are still a beginner or struggling Trader and you choose to use a risk management plan that risks a ton of your account per trade then you are much much more likely to blow your entire account or lose so much you completely give up on trading than you are to make a lot of money and I think that is an important lesson about growing a small account that I hardly ever hear anyone talking about in order to grow a small account you&#39;re going to have to do so with a decent size risk but if you&#39;re trying to do that and you don&#39;t know how to trade yet you&#39;re just going to blow your account so first step learn how to trade then decide if you want to increase your risk a bit to help make building that small account go a little faster now let&#39;s talk about the physical way that we manage risk so for me I risk a certain percentage of my account value on each trade that I place and this is much easier than it sounds because there&#39;s calculators all over the Internet there&#39;s one on myfxbook that I used to use before I utiliz trading views calculator and I&#39;ll put a link for that on the screen but the way I do this is by utilizing a stop loss that is a certain amount of Pips and then I adjust my position size after I know where my stop- loss is to ensure that if price pushes down and hits my stop- loss I will lose let&#39;s say 1% or whatever you decide to risk of my total account value that all you do is just adjust the position size once you decide what your stop loss is going to be and again they make calculators that make this very easy and trading view with the brokerage I use oanda they actually do this automatically for you so I don&#39;t even have to go to a third party calculator but the process of utilizing a risk management plan is just by utilizing a stop-loss and manipulating the position size you use to equal a small percentage of your total account value now in terms of a risk management plan these numbers are going to be extremely personal and they&#39;re things that you&#39;ll have to decide on your own no one can tell you what your personal risk tolerance is it&#39;s something you have to decide but this is my risk management plan it&#39;s extremely simple in terms of risk per trade all this means is exactly what it sounds like this is the amount in percentage of my account value that I&#39;m willing to risk on every trade that I place I&#39;m always risking between 1% and 2% of my total account value depending on the trade and other factors that I&#39;m not going to dive into right now the second part of my risk management plan is called overall exposure essentially this is just how many trades can I be in at one time because if some crazy news event or world event happens and I end up losing all the trades I&#39;m in I don&#39;t want to have 100% of my account value at risk right instead I want to have a limit on my total exposure that I am exposed into the market with for me that number is 10% meaning if I am looking at risking 2% per trade then that means I can be in five trades at once which is going to give me an overall exposure of 10% and that is my entire risk management plan again I know it&#39;s simple but essentially the these two things are what keep me out of my emotions when I&#39;m placing trades and keeps me from making any trading mistakes because utilizing this risk management plan keeps me from being emotional about trades at all and I promise you if you create a risk management plan that you are comfortable with it will keep a lot of the emotions you feel while you&#39;re trading right now out of the way and allow you to actually have a successful trading career instead of making you commit a ton of trading mistakes and again please don&#39;t feel like I&#39;m pointing anyone out the reason I&#39;m showing you this is because these are all mistakes I made in the past and I want to help you to not make those mistakes and not lose unnecessary amounts of money not make unnecessary trading mistakes so instead of you making those mistakes just learn from mine much easier so I&#39;ll try to put on the screen all the different sections that were in this video the scheduling the trading strategy itself along with the risk management feel free to take a second pause the video and screenshot it if you would like to do that and use that for reference just a couple of key points Before I Let You Go Remember The Challenge from the beginning of the video take this exact trading plan trade it in a demo account for 90 days and just see what the results are what do you have to lose now remember I said trade this in a demo account do not trade this with live money right now if you are seeking advice on YouTube then I promise you you&#39;re not ready to trade with a live account you&#39;ll know when you are but for the purpose of this challenge it will be great practice for you following a trading plan to take what you&#39;ve learned in this video and try to use it on a dembo account for the next 90 days with minimal mistakes I hope you got value out of this video if you did go ahead and click that like button for me go ahead and subscribe if you are new and you enjoyed it make sure to comment if you made it to the end and I&#39;ll try to like every comment that says they made it to the end I wish you the best of luck on all your future trades hope you trade green and I&#39;ll talk to you in the next video

Transcript for:Trading Plan and Strategy Guide

Transcript for:
Trading Plan and Strategy Guide