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.

Thursday, July 9, 2009

Enter Trade with AND Exit Trade with OR

Entering a trade is a process of asking AND answering questions

Is the trend up or down
Is the market choppy
Are prices trading above or below the Wave
Am I waiting for pullback or bounce
Am I waiting for a breakout or breakdown
A I setting up a momentum trade or a swing trade
Where are my swing highs and swing lows
Did my Fibonacci retracement and extension level give me secondary confirmation
Have my trendlines, support, and resistance levels formed a chart pattern
Are there any reports to be released today

Exit trade at stop-loss OR profit targets.

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