Strategy: Harmonic Pattern Trading

Target profit: 75pips per week
Indicators: Channel Movement, Harmonic Patterns, RSI
Important chart pattern: double-top/bottom and Head & Shoulder, divergence and convergence
Important candlestick: Doji, bullish/bearish engulfing

My Trading Mantra

1. Objectively identify my edges - I have a system here that works.
2. Pre-define the risk of every trade.
3. Completely accept the risk. Consider the money GONE.
4. ACT on my edges without reservation or hesitation. Follow the rules and take every trade that meets the conditions.
5. Pay myself as the market makes money available. Take the profits and be happy. Even if compounding my account, pay myself something out of my profits each month.
6. Continually monitor my susceptibility for making errors.
7. Understand the absolute necessity of these principles, and therefore I never violate them.

Tuesday, June 30, 2009

Use of Fibonacci

2 Uses of Fibonacci - For retracement and extension. But there are also other uses for Fibo.

Fibonacci can be a good resistance/support line. Therefore, setting target at / near Fibonacci is ideal.

Strength of trend is determined at the various percentile. More than 61.8% indicates strong trend, 50% is neutral, 31.8% or less indicates weak trend.
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