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.

Friday, July 10, 2009

Candle stick signs for Trending market

Find this useful to identify trends with candlestick:

Trend is normal. Rising white bodies signal ascending trend and falling red bodies signal descending trend.
Trend is getting stronger. Rising longer white bodies with no lower shadows for ascending trend; falling longer red bodies with no upper shadows for descending trend.
Trend is getting weaker. Candle bodies become shorter and for ascending trends lower shadows occur, for descending trends — upper shadows.
Trend consolidation. Small candle bodies with both upper and lower shadows.
Trend is changing (not accurate signal). Very small candle body with long upper and lower shadows.

Your trade results will show if you are doing what is correct or you are doing what you like
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