The final day of bootcamp covers the strategies I personally use to enter the market. Exactly what I’m looking for, what indicators I use for each strategy, and my exact entry and exit criteria. We also look at how the EA can automate entries with the strategies too and see it in action doing exactly that.

Day 1 – How The Forex Market Moves & How To Measure Your Trading Success
Day 2 – Multi Time Frame Trading Analysis, Elastic Band Theory & Trading Psychology
Day 3 – Top Trading Indicators To Use For Position Trading Strategies
Day 4 – How To Position Trade, Trading Risks & Managing Your Drawdown
Day 5 – Strategies To Use as a Position Trader Explained In Detail

👉 Download the PDF Presentation

👉 Market Reversal Alerts EA: https://www.mql5.com/en/market/product/65383

👉 All Indicators Used Available Here: https://themarketstructuretrader.com/the-indicators/

👉 Join me & position trade daily in the live room: https://themarketstructuretrader.com/the-live-room/

👉 Join the community chat on Telegram here: https://t.me/market_structure_trader_chat

Video Transcript

Position trading boot camp day five. So today we are going to be watching, looking at the strategies. Okay. So all the strategies that I use to execute my trades. And we’re gonna look at the exact entry criteria that I look for and how to automate everything. I say everything, it’s automating as much as you possibly can. But I’m gonna be showing you my process basically that I go through, the tools that I use to execute the strategies and why I do it this way.

But everything that I do is fine-tuned over years to make my life really super simple so that I have to spend less time in front of the charts. If you don’t want to automate everything and there is a massive benefit for not automating everything, which is chart time, then do it all manually. Yeah, all the tools are there and available. But there’s one thing that stuck with me. One of my mentors said to me, in fact, one of his rules was he wouldn’t mentor you until you’d spent thousands of hours in front of the charts. And there was an awful lot to be said for chart time and watching and looking at charts, watching how they unfold. You build a muscle memory in your brain. And his rule was basically, I want you to read thousands of pages of information that I have on trading, and I want you to spend thousands of hours in front of charts watching them.

And by the time you finish watching charts for thousands of hours, you will know what price is going to do next, because your brain will have seen those patterns playing out so much that they’re imprinted on your memory. So when price gets to a certain point, you’ll just go, right, next it’s going to do this. And it is true. And I didn’t believe them at the time. But now I’ve spent thousands of hours in front of charts. I know what’s going to happen next. And it’s all to do with the way that your brain absorbs energy.

And the patterns you see on the screen get burnt into your eyeballs, basically. So I love automation. And it’s absolutely brilliant. And it saves me loads of time. But without those thousands of hours in front of charts, I don’t think I would know how to execute this automation today. So there’s a lot to be said for chart time. But there’s something you can do to speed up chart time is you can go into the simulator in MT4 and you can just watch months roll past at a time, spot how the market moves, see them pushing price to certain levels and then pulling back, see support and resistance playing out, see buying cycles happening, and then seeing them sell after they’ve done that buying push, yeah?

And see it over and over again. The simulator, the strategy tester is brilliant for that because it allows you to do months at a time, literally in 10 minutes. So, okay, so let’s get on with the presentation. So here we go. What I look for and why. How I enter and manage a trade, the setups and how I extract the money. So this is the part you’ve probably been waiting for and very patiently, obviously over the last few days.

So I’m gonna explain the tools that I use in MT4 and I use to find my entries and exits. And I’m going to show you all the detailed setups that I go through and examples of those setups. The process I use, I go through every day and how I get alerted to opportunities, how I automate the vast majority of my analysis and my trading, my thought process when I’m entering a trade, how I plan my initial trade and then the additional entries if I need them, and what I do when things go wrong and how I get out of bad trades.

Okay, so that last bit we’ve really covered yesterday in detail. So what I do when things go wrong, that’s not really gonna be covered too much today actually, because we covered all that yesterday, didn’t we? Advanced drawdown control and drawdown control. But everything else we’re gonna look at today is related to strategy. So first of all, quickly running through the tools that I use.

We have covered these all in detail in the third day when we looked at indicators, but I’m just gonna recap for you just as a refresher. So when we’re going through the strategies, this is all fresh in your mind as to what they are and what they do. So those are the tools that I use. ADR dashboard alerts be when pairs are extended today. RSI dashboard alerts me when pairs are extended on higher timeframes, so I can enter on lower timeframes.

Market reversal alerts indicator is my signal, my entry strategy. The EA automates 90% of my trading for me. My gap indicator helps me see areas to target or where price is potentially gonna reverse from. And the trade managed dashboard shows me my entire portfolio exposure at a glance. So I can see whether or not should be getting in and out of trades. So these indicators are apart from the gap indicator, all the other indicators, ones that I’ve developed myself because I couldn’t find the exact ones that I wanted.

So they’re all fine tuned basically to do exactly what I want in the way that I want them to do. So these will either automate or partially automate my strategies. And as I said, you don’t need them. You can do everything manually, but they allow me to spend minutes and hours per day trading rather than being attached to the charts all day long. But as I said, there’s not a bad thing to be doing that.

You can sit in front of your computer and watch your charts while you’re working. Because it’s brilliant. You’ll see things playing out. You’ll suddenly see a massive spike. You’ll go, ah, there’s a news event. And you’ll know now, next time you see that massive spike, when you look back in the history, that was probably a news event. And there’s lots of things you’ll pick up like that, but you’ll only see it if you watch the charts and see it happening and playing out.

So covering the first two, ADR and RSI dashboards. These are used to alert me to extended market conditions and tell me to look at the chart to see if there is a setup I like and b it’s ready now or getting ready so that I can either put the EA on to start trading for me or have a look later on or tomorrow possibly. Okay so I can see at a glance what is interesting and setting up and it cuts my chart time down to literally minutes a day. So I have MT4 running in the background. Whatever I’m doing at my computer, MT4 is always running. In fact, I’ve got multiple MT4s running. And basically I just react when I get an alert.

So looking at the dashes, those two dashes, so I’ve got them here. So the ATR dash is sitting there in the background. So this is my chart. I’m looking at whatever chart I want to look at. Yeah, just flip between the charts whenever I want to. The dashes, literally I never look at them. They sit there in the background. All right, and when something hits ADR, I get an alert and it goes, ping, have a look.

All right, so then I’ll flick over and I’ll go, right. US dollar Swiss has hit ADR, hasn’t hit ADR obviously today. Let’s have a look at US dollar Swiss. Where are we? And I’ll start my analysis. Yeah, so that’s what they are for. So I don’t have to be sitting here, watching this thing going, it’s halfway, come back in 10 minutes. Does it move?

No, right, okay. So that’s literally what this is for. It’s an alert system. So I don’t have to look at the charts. I know what conditions I want. Remember, these are condition indicators. I know what conditions I want to trigger me to go and look, and that’s what they do. RSI, any time I want to, I can open my RSI bash, look at it and go, EuroCAD, good looking trade.

US.EN, good entries there. Okay, so this is, and this is the same thing, it alerts me. So I put this in the background, I’ll have a look at it when I open my charts in the morning, see what’s extended, have a look at those on the charts, and then I will sit there and minimize MT4. Every four hours, I’ll get a ping from my MT4 saying, this has got extended, that has got extended, and I’ll just go and have a look at it. So it cuts my chart time down to literally every four hours for that particular strategy.

Yeah, with ADR, it will be any time of the day, ADR can be hit. So at any time of the day, the other dashboard will ping at me and go, ping, I’ve been hit, go and have a look at me, yeah. So that’s why I use dashboards, because they basically mean I do not have to look at my charts. Remember all the strategies we’ve got contain multiple parts.

We need a condition to be hit. The RSI dashboard tells me the condition is extended. The ADR dashboard tells me the condition is extended, i.e. possibly a good opportunity to take a trade, go and have a look. So that’s why I use the dashboards and that’s how they help me automate my trading. So I don’t have to spend time in front of the charts continuously looking. If you didn’t use that, all you would need to do is every four hours, set an alert on your watch, Outlook, I don’t know, any calendar, or just set an alert basically every four hours to ping at you and go, go and have a look at your charts.

So every time there’s a four hour candle close, you can have a look, flick through every chart, and let me take you two minutes and see if there’s any RSIs extended. That is the alternative, but I don’t have to do that because this does it for me. Yeah, right, so that’s that. Market reverse alerts indicator. This indicator or dashboard, cause it comes with a dashboard as well, if you want it, is used to then get an alert on that pair. So the ADR RSI dashboard has alerted me that, for example, the EuroCAD is massively extended. So what I can do is I can open up an MT4. Yeah. And I can put the market reversal alert indicator on the chart and I can say to it, alert me next time there is a reversal alert in whatever direction.

Yeah, so I can say, pop up alerts, set that to true. Okay, and I’m only interested in long alerts. So next time this gives me a long, okay, I’ll get an alert. So that’s why I use the market reversal alert indicator because that’s why it’s called the market reversal alert indicator. It’s an alert indicator. So if you’re trading manually and you would need the obviously this indicator to do that. When you get an alert on RSI or ADR, you can basically use the market reversal alert indicator to tell you now’s the time to get in.

You open up your chart, you press the buy or the sell button. Simple as that. The next one is Market Reversal Alerts EA. So the EA allows me to automate the majority of my trading, including initial entries and additional positions for a pair. And it can take profits at the levels I choose as well. So I do not use this as a set and forget EA. So what I do is when there is a setup I like, I will manually put the EA onto my chart and I will say, right, set this up so that it takes trades for me based on the conditions that I want to be met, right?

Most of the time, I’ll add it to the chart and say, just take shorts for me and space out my positions one ADR apart, please. If we get to one ADR in profit, close the lot and turn yourself off. Yeah, so I don’t have to press the button to buy and sell. That is literally what the EA is doing for me. It’s automating me as a trader and when I would get into positions. There’s lots of settings on it.

So you can set it up to do anything you want. You can also set it up to automatically get you into these strategies. And we’re gonna look at this working in a minute and trading for us. But we’ll cover that, obviously when we go through the strategies. So I can get an alert from the dashboard, analyze the chart and think, yeah, this is a great level to start my position. So I’ll open up a chart on my VPS. I’ll add the EA to it. And I’ll basically say trade short, get me in every time we get a reversal alert until we’ve hit a profit target and then get me out.

Simple as that. Yeah. So it just automates me. The other beauty of that is while I’m asleep, I’m trading. Yeah. So if during the Asian session, I’m in US dollar, yen, and there’s a massive move on the yen, I’m not gonna miss it because the EA is gonna trade it for me. So it’s basically me in the day replicated while I’m asleep. It’s the two big benefits for using EA automation. And finally, sorry, missed one gap indicator.

Oops, sorry, gap indicator. That’s not finally, that’s the second to last. Gap indicator shows me the potential targets. We covered this one in detail. So basically when I get into a position, this shows me where price is likely to be heading because we know that these actors are magnet for price, don’t we? So these are great targets to aim for. So I usually target the nearest gap that is either around ADR and ADR away from my entry.

And that is literally what I will use the gap indicator for. I don’t use it for anything else, but where are we likely to be heading? Also, it’s useful for, is there a target? So if we get into a position and we’re taking it along and we don’t see any 1, 2, 3 gaps or propulsion candles above us, but we see three or four of them below us, we might be thinking twice about taking that trade. Yeah, so let’s say for example, we’re about to, we get an alert to go long here, okay?

And down here, we’ve got some propulsion candles from quite a while back, and we’ve been pushing down into them. We haven’t quite reached them, and there’s no propulsion cameras above. Likelihood is, this is probably not the best time to get in. Would be better to wait until we’ve got down here because we know they act as magnets and then we’ll get an alert, then we’ll get in. Yeah, so they have a use as well.

Sometimes you will find that the market’s been very orderly the way it’s pushed down and it’s got targets to aim for down here, but there’s none above. So sometimes it will help you in that respect. You look at a trade and think, actually, no, it doesn’t look as good as I thought it did. And finally, the trade manager dash. The trade manager dash shows me at a glance where my portfolio is, what profit is available to take, where issues may be developing, what I need to start thinking about drawdown control being activated on, and my exposure.

So this is my kind of cockpit, if you like. I haven’t gone through this in any detail, the Trade Manager Dashboard, but you can find it on MQL5. There’s links in the Telegram group to it. Go and have a look at it. And it’s very straightforward what it shows you. It shows you your exposure, all your open positions, your profit, and everything you need to know. So it’s kind of at a glance, have a look, where am I?

Yeah. So you can go and have a look at that in your own time. Every trade I take follows the same process, okay, so I get an alert to a condition in the market. I look at the chart to see if this is in the direction of my overall bias or a good mean reversion entry. I see if now is the time to get in or I think it’s got further to go before I enter, like that gap example I just gave you a second ago. I look at my current exposure to see if I can trade this or I’m on that pair in other trades. So if I get a market condition alert to get into US dollar yen long, and I look at my exposure at the moment and I’ve got two US dollar trades on at the minute, just won’t bother looking at it because I can’t take it because I’m already on the US dollar Okay, so then I either jump in now or I set up the EA to get me in when the market reverses next.

And then I just monitor the trade manager dashboard a few times a day to see how things are going, okay? So trades that need advanced drawdown control are managed as needed. So that’s it. I’m literally sitting here, waiting for an alert to ping. When an alert pings, I look at the chart. I look at whether I wanna get in. If I do, I either take a trade or put the EA on my VPS to take it for me.

And then I just monitor my dashboard, simple as that. Yeah, so I boiled it down to very, very simple processes. So first strategy, set up number one, mean reversion. This is my bread and butter strategy. Market exhaustion without profit takes. And you can trade this on M15 or H1. You could trade on M5, but I would recommend a higher timeframe than M5. M5 is really scalping. M15, to a certain extent, is quite quick. Starting out, try H1. But M15, I’ve found to be the best sort of time frame that filters out the majority of the chop in the market, but also gives you a good enough quality of signal for this particular type of trading that you can make it work.

Okay, so mean reversion is where we are expecting either in a range, let me open the whiteboard actually so I can draw it better. So mean reversion is either in a range of some description. It’s not going to look as even and as nice and neat as that, obviously. But the idea is we expect it at least to come back to the middle, the mean. Moves down, comes back. Moves down, comes back.

Moves down, comes back. Most of the time, it will continue like that. Sometimes what will happen is the range will stop being a range. So it’ll go like that, go like that, go like that, go like that, and it’ll break out the top and then it’ll go like that. And then it becomes a trend, okay? But it will still revert to a mean. The new mean has just changed to a different thing.

Now it’s a channel. So we start mean reverting in a channel. Okay. So mean reversion is just a way of saying it’s gonna come back to the middle. Yeah. And a lot of the time it will not mean revert. It will completely collapse in the opposite direction, which is absolutely fine. You know, as long as it comes back our way, we don’t care.

So the tools I use for this are the RSI dashboard and or indicator. So just the RSI indicator, if you haven’t got an RSI dash, and the market reversal alerts indicator, and the EA, or if you haven’t got the EA, you trade it manually, okay? And if you haven’t got the market reversal alerts indicator, you can use anything, like I said, when we’re covering the indicators, you can use a bearish engulfing, you could use a three bar reversal candlestick pattern, whatever you want to use as something that’s telling you that the market is moving in the opposite direction, okay?

But that’s what that indicator was designed to do, which is why I use it. So the first thing I do is I wait for an alert that your higher timeframe RSI is extended. So this will be above the 68 level, or the 70 level, or the 80 level, or it will be below the 32, the 30, the 25, the 20, whatever levels of RSI you have decided to use, it will be above or below those. The higher, more extended RSIs you use, the less signals you will get, but the more accurate those entries will likely be, okay?

So you can choose any RSIs you want. So after I’ve found, got an alert that the RSI is extended, I then check the H4 chart to see how strong the move has been and if we are due a pullback. So if the RSI is extended where we’ve had a move that has gone like this, and the RSI has got extended here, that isn’t a particularly strong move. It’s just a little bit stronger than normal. And there’s no reason to say that is not going to come back. More than likely it will. But the best types of these are where the market does something like this. Yeah. So it’s a massive strong move, and it’s parabolic. It’s up and it’s gone completely crazy. And there was no point where they pulled back.

Yeah, so the less they’ve pulled back when they do that move, the better and the more accurate these entries will be for you, okay? Because everybody that buys has to sell. If we find that there’s buying, selling, buying, selling, buying, selling, buying, selling on the way up, that might not be buying, and certainly might not be selling coming in now, it might be more buying. But if it’s buying, selling, buying, selling, buying, selling, buying, buying, buying, buying, and we get an alert, they’ve got to sell, haven’t they? So they need to take profit on this move. So the whole idea is we are exhausted. There’s not been a profit take, which is why I call it market exhaustion without profit takes. That is your ideal.

Now most of the time, if you’ve done any back testing with RSI since you’ve been doing this, you’ll have noticed that the vast majority of time when it gets extended on our site, it just comes back anyway. But the ones that get really extended really fast tend to come back quicker and quite often more aggressively. We’ll look at some examples in a minute. So that’s what I do. I look at the H4 chart and see, are we due a pullback? Step three, is there a level we are about to reach or it has just reached support and resistance or maybe a one, two, three gap?

So has the market pushed up, given us an alert on the RSI and it’s now just hitting or just approaching a level of support and resistance from the past? Yeah? Yeah. Here. So this is a level we couldn’t get through and we’re unlikely to break through again. So if we’ve pushed up very hard into that level, brilliant.

Or is it a level we’ve pushed up into once, maybe twice, and now we’re coming up here again. Remember what we just discussed. There’s gonna be orders here. There’s gonna be pending orders for people that wanna take breakout trades. There’s going to be stop orders for people that have taken short positions from there. Is the market coming to a level where it’s likely to reverse for any reason whatsoever? Are there one, two, three gaps down below to act as magnets, targets for us to reach for.

Okay, if yes to all of the above, switch to M15, get in, simple as that. But we get in on the next reversal alert. We don’t just get in because of that situation. That condition that has been reached doesn’t mean we get in. Our signal indicator tells us to get in, okay? Or I put the EA on my chart, and I let it get me in when the next reversal alert happens. Again, this is the beauty of using the EA, is if I see RSI extended in this particular type of strategy, I can put the EA on that chart.

And if it doesn’t give me a reversal alert for the next two days, I won’t get in. But when it does give me a reversal alert, I’ll be in automatically, and I might be asleep. So that’s the reason behind the development of the EA is to just basically mean I don’t have to press that button, it’s laziness, but it works. Okay, target. Usually I assume the worst case scenario that these will only be a pullback trade, okay?

Mean reversion or a profit take move on the big move that they’ve just put in. So I like to see an obvious target no more than 50% of the way into the move. You can use a fib to measure this and we’ll have a look at that in a second. I like to see a good one, two, three gap or propulsion candle to aim for, ideally before the 50% retracement will be completed. Okay. And considerations, is there any news that has caused this move that may fundamentally change direction. So we’ve just watched the non-farm payroll event unfolding and sometimes news will make a massive spike. Now, if news does make a massive spike, that’s fine because what have they got to do after they’ve been making that massive spike?

Take profit on that move that they’ve made that massive spike with. So you will find news moves will retrace, but sometimes there are fundamental news releases like massive rate changes, where it will just spike hard and it will go, and it will go for days. So just be aware of news. And again, you’ve got to make sure every morning, part of your routine is opening your news calendar.

What have we got today? So when you see that big spike and you go, right, that looks like a great opportunity. You know in the back of your mind if there’s possibility of a news event that’s caused it. So let’s have a look at an example. So this is the four hour chart. Now on the previous slide, I said, check, wait for an alert on your higher timeframe RSI. And then I put check H4.

The reason I put higher timeframe there was to remind me that this is a multi-timeframe strategy. So I personally trade it on H4 and M15. So I use M15 for my signals and my entries, and I use H4 for my extension conditions with RSI. If you want to trade faster, you could use the hourly chart as your RSI and M5 for your entries. Or you could use the daily chart as your RSI extensions and your hourly chart for your entries, or your weekly chart and your daily chart, or your four-hour chart.

So it’s multi-time frame. So in this particular example, I’m using H4 and M15 because they’re nicely spaced out. So this is the Euro odd H4 sort of at the moment. As you can see, we’ve got HRSI extended on the four hour chart. So in this particular case, I’ve decided to use 70, 30. You could use 80, 20, you could use 68, 32, any you like. But I’ve decided in this example, just to use 30, 70. They’re a good trigger, a good solid level.

So price has moved down, we’ve extended there. So this is my condition. So my RSI dashboard has gone ping. Okay, we’re extended to the downside on H4 on RSI. I go and have a look at the chart. Have we had a big strong push in one direction? Yes, that’s pushed down really hard. You had a little bit of a profit take in the middle, but it’s just a big solid push. Is there any levels of support and resistance? Yes, down here. So it’s a good possibility we’re going to get a bounce here because it’s extended and it’s also near a support resistance level. Right, are there any targets above me that I could aim for? Yes, there’s loads. Look at these propulsion candles, one, two, three gaps above me. So there’s really, really good opportunity for a trade right now on Euro-odd.

So what I do then is I flick down, sorry, I’ll cover next what I do as my backup plan. So the first thing I do after I’ve looked at the chart on H4 is I put into place a backup plan. This is an important step before you take a trade. You can take a trade straight away, you can jump in straight away on this type of strategy, but at some point you need to plan your entry, okay? Your additional entries. So remember what we want to happen. We take a trade, it goes to our target, it hits it, we get out. Happy days, that’s what we want to happen every time we hit the button.

It doesn’t happen that way. So what we need to think about is, what if I’m not gonna make this trade? So you need to plan for my additional entries. So what is my backup plan? How far away am I gonna space the entries I’m gonna get into in my position if this trade doesn’t play out for me now? So what I tend to do is look at levels that price is likely to head to next.

So let’s say for example, we were getting in today on this one here. The levels I would look at if this doesn’t hold, or if this doesn’t act as support, would be ADR or an obvious level of support further down from where we are now. So where’s the next level of support? If it’s not going to bounce at this support, where is it going to bounce? Probably that one.

Look how many times it’s respected it. I’ve drawn it on the chart. Yeah. It moved up into it and rejected it. Pushed up, rejected it. Pushed up, consolidated. Tried to break through it, couldn’t get through it. Just struggled. Nope, not having it. Tried again, nope, not having it.

That’s a really, really, really strong support. So if this doesn’t hold, probably somewhere around here. I don’t know when, doesn’t have to be to the pip. Let’s say somewhere in that block. Doesn’t matter, does it? We’re not being accurate. We haven’t got a time our entries. We need to know roughly, if this doesn’t hold, roughly where are we gonna go? Down there, okay?

So I’m gonna plan my entries to get in here and here. So I would then look at what the ADR is on the pair and space my entries out accordingly. So is this level roughly 126 or more away? Yeah, brilliant. Okay, so maybe I’ll get into one here and then here. So I’ll think about how far away I want to space my entries out. Remember when we looked at ADR and what affects the drawdown on your positions?

ADR is one of the key things. The distance between your entries is one of the key things that affects your drawdown. So I would recommend no less than half an ADR between your positions or one ADR. But have a look at your first entry, measure the distance there and think, right, that’s probably, I don’t know what that is, let’s say that’s one and a half ADR. So what I’d probably say is I’ll get in at three quarters of an ADR apart. So I’ll plan to have another couple of entries because by the time we get down to there, we should get a nice bounce, right? If that doesn’t hold, where are we going next?

Probably down there, look at that big spike down there. We couldn’t get down any further than that last time, and it just happened to be in line with exactly where we struggled to get through last time. Yeah, so that’s an area that price was not happy trading at. It bounced, couldn’t get through it, but it finally got through it and it said, yep, that’s fine. Then it tried again, it was like, no, we’re definitely going up.

Massively strong area of support. So entry one, entry two, maybe three, entry four. If that fails, where are we going next? There’s blue sky here. There’s nothing between this level of support and really the low here. And this is an obvious one, isn’t it? Yeah. So there’s nothing there to take. So if we get down to here, and it doesn’t bounce and we get out of our trade, we’re probably going to have to get into positions 5 and 6.

Spread them out nicely. So the plan is either this trade works, and I’m out, and then I move on to the next, or I’m gonna have to take a position on this and the position will either be that, that, or that. One of those will play out. And remember, right now we’re extended massively on the RSI. How extended will the RSI be down there? How extended will it be down there?

How extended will it be down there? We’ll be embedded, won’t we? Bang, it’s got to have a profit take because if they push price all the way down there without taking a profit, you can guarantee a V-shaped recovery is coming because there’s gonna be so much buying pressure coming back the other way. This is a prime example of the opposite of what could happen there.

Pushed up, got extended, and it went, no, gonna carry on going, pushed up and then bang. That’s an A-shaped recovery. This case, I would be planning a V-shaped recovery. Okay, but we don’t know, do we? We can’t tell what they’re gonna do. Nobody knows what they’re gonna do. We can only play the odds, play our edge, and play what we see in the past. We know in the past, when this thing gets extended down here, it pops.

When it gets extended up there, it pops. When it gets extended down there, it pops. We’re extended down there. It’s gonna pop. If it doesn’t pop here, it’s gonna pop there, there or there. So we plan it, okay? So that’s your backup plan. So when you take your first position, you’ve done your analysis and you go, yep, this looks like a great trade entry.

Let’s have a look at where we’re gonna get in next, okay? And then we get into our entry. All right, so when I was speaking about FIBs a minute ago and looking at the pullbacks on FIBs. So we get in on our entry on M15, which we’ll have a look at in a second. But when we’re planning our targets, what we’ve got to do is look at where we’re potentially gonna be going, all right? And we said, let’s look at gaps, right?

One, two, three gaps. So there’s plenty of them, we can see them, okay? There’s one here as well, and there’s one here, there’s one here, we’re obviously already at that one, but we would have taken our entry somewhere down here. We’ll have a look in a minute where the entry was. So after this pull down, we need to see where we’re likely to go. One of two things is gonna happen here, isn’t it? Price is gonna push down, and it’s gonna pull back, and it’s gonna continue.

So if we are in a trend, we’re red. If we’re in a downtrend, we’re going to pull back and then we’re going to push. Or we’re going to pull back and we’re doing a V-shaped recovery. One of those two things is going to happen. So we plan for the worst case scenario. Worst case scenario, this is just a pullback, not a reversal. So where is it going to pull back to? So weak pullbacks you will find if you use a Fibonacci tool will tend to be back to the 38 level. Medium strength or strong pullbacks will be back to the 50 level, sometimes 61.8. If we break that level we’re typically doing recovery.

So that’s how you can plan your targets. So what I tend to do is I will draw a quick fib on the move. And you’ll see here I’ve drawn two fibs. The reason I’ve drawn two fibs is because we’ve got two moves here. One from the high there. You could class that whole thing as one move. And then we’ve got this little sort of pullback consolidation.

So there was a high there. So this could be the move. I’m not sure which it is, and I don’t know. So I’ll measure both, and I’ll look at where the fibs are on both. If there’s only one obvious move, there’s only one measurement to make, isn’t there? But if you want to use a fib tool, this is great because what we can do now is find confluence of targets.

Here we have a 1, 2, 3 gap. OK. And it’s sitting bang in the middle of the 38 retracement. So that looks like a really good level to target. Failing that, we’ve got a little one there, but a big one there. So that might be a great target to aim for. And that’s the 61.8. So we’re either going to have a weak pullback or a strong pullback. So those are where I would be targeting.

Also, support and resistance you can use. So look at this low here where we bounced off the 72 moving average. We rejected it a little bit there and then we broke it. That is a pretty good level of potential resistance. So in a trend, we see price move down, up, down, up, down, up, and what it tends to do is bounce at wherever it’s stopped on the way down. Yeah. Typical market structure.

This is how market structure works. That is that down. So it’s likely to do that. Where’s that? The 50. What have we got there? One, two, three gap. Perfect. So that would be my ideal target would be the 50. So plan for your targets to be worst case scenario.

And this is worst case scenario. This is just a pullback. If it’s not, it’s a V-shaped recovery, happy days. We’re going all the way up there because we’ve got a target, another target, another target. Yeah. So that’s planning your targets. You don’t have to use a FIB tool, okay? So if you don’t use a FIB tool, we’ve got these on the screen.

You can just use those. But if you use FIBs or you like FIBs or you know how to use FIBs, they make a great confluence for additional backup for your plan if you like, for where you think price is gonna go. So then after we’ve done that, we get in. Reversal alert, hits, and we can see our targets up there. So where is price likely to get drawn to, support resistance, one, two, three gaps.

We’ve got tons and tons and tons of them to aim for. And you saw, we put our fib on there. So we would target somewhere we think is obvious. This level here would be of interest to me as well, because we bounced, bounced, and this is the support I drew on the H4. We pulled back down. We didn’t make it back through there. So as we’ve got through there, there’s a chance we might get stuck here, but it’s more likely we’re gonna head somewhere like that.

Okay. So this red line here is where we got the signal on H4. So this is where we got extended on the RSI on H4. So this is where we would be now looking to take reversal laps. And we would have got our first one. Yeah, this probably would have been the first one to be honest. So this is where we would have got in. And obviously then we’d be looking for targets to the upside.

Okay, and ideally what we want is our target to be within one ADR, don’t we? So the ideal would be to target some target within an ADR away. So here’s ADR. This is a bit too close, obviously. This is more of a scalp. But tomorrow, if price is pushed up there, the ADR levels will be redrawn and these will probably be very much within range.

Okay, so that’s the first strategy, mean reversion. Okay, so we’ll have a quick look at the EA just trading this for us and we’ll see some trades play out. So the kind of hammers it home what is actually happening. Just looking at what we’ve got going on the non-farm payroll. So let’s move over to the strategy tester. So I’ve got some set up kind of ready to go. Just load that up. So mean reversion. Okay, so what this is gonna do is it’s just gonna take trades and it’s going to use the four hour RSI when it gets extended.

And we just use 6832 with a 14 RSI. And that’s literally all it’s gonna do. It’s gonna take trades and it’s just gonna target one ADR or it’s gonna try and bank roughly 1%. Yeah, so it’s gonna use one ADR or 1% as a target. And I’ve put the hybrid martingale on this as well. Okay, so just so we can see that playing out. And that’s literally all this is gonna do. So let me just set this up, pound US dollar. I’m just trying to think what date it was.

I think it was the 23rd. So I was trying to find some good examples that play out almost straight away because sometimes you have to wait. Yeah, okay, so let me just pause that. So the RSI was extended just as we got into it. The RSI was extended just below the 32 level. As you can see, it’s 31.5. So because we’re extended, we took our first entry. So price continues, I think on this one, I’m not sure.

I think this one just goes straight to a target. I’ve got some different examples in here of taking single and multiple exits, I think. So we’ve gone straight into a consolidation at the moment. So we’ve pushed down and we’re consolidating. So you think of how that’s looking on a chart, it’d be something like that. And then we’ll wait for that reversal of that move to start. Okay, so there’s our target here on that trade.

Now we’ve pushed up. We’re not quite extended on the RSI. So we won’t be taking any trades at the moment. We’re waiting for this RSI here to get above 68 level. And then we will start looking for short positions. Then going into another consolidation at the moment. Now I’ve pushed up, RSI is at 63, not quite where we want it to be, not quite strong enough push. There we go, we’re above the 68 level now, so we’ve just taken our short trade.

There’s a good example of enticing people to go short. Everybody’s gone short. They’ve put their stop orders up there. So they’ve come up and they’ve taken that liquidity to power up their next move. I’m going to continue to push up a little bit higher. You can see we’re still extended on the RSI. We’re still up at the 70-odd level. Move down a little bit now. We’re still in a big consolidation at the moment if you look at this.

Just kind of sitting, waiting at the minute. So we’re going to get another push shortly, which is going to take price higher. our second position. To ever get us out of this consolidation, there we go. Okay, so we’ve pushed up high again, taken our second position as the overnight changeover happened. So our average price is now somewhere there in the middle. So we’ve taken one position, got our second position there.

So it’d be a little bit higher because we’re taking a slightly larger lot size on this one. We extended on the RSI, we’re above the 70 level now. So we’ve had a good, strong, hard push to the upside. We’re just waiting for them to put that sell move, that profit taking move in, which is just coming now, and then we’re out of that position. So we’ve taken those two positions off. We’ve taken one off, a break even, this one in profit. So this one basically pays for that one, and we get out. Okay? So that is basically how the mean reversion strategy works. It’s very, very, very simple. We’re literally waiting for the four-hour RSI to get to a condition of extended.

We’re having a look at the chart, seeing if it’s a trade that we want to take, seeing if there’s been any kind of massive profit-taking move. If there hasn’t, then it’s probably going to be playing out very shortly. We’ve dropped down to our lower time frame. We make sure there’s targets above that are obvious for us to reach for. We enter when we get a reversal alert and we take profit when that move happens. When they take their profit, we take ours.

Okay. And if we need to, we get in at additional levels below. So the EA in this case, obviously, because the EA cannot see one, two, three gaps, and it cannot see support and resistance, the EA will simply get you in at ADR extensions. So in this case, we’ve set the EA to use half an ADR. So it will say, when we push half an ADR or more away and get another reverse alert, take a position. And that’s why I was saying it’s important that you measure where the next support resistance levels coming up are.

Because if the first one fails, it’s likely the second one will hold. So if that second one is two ADR away, you probably only want to place your trades at least one ADR apart. All right. So any questions on that? The mean reversion strategy. Does it all make sense? Everybody understand the process? Again, you can go back and watch this obviously again and refresh yourself with the rules, but very simple rules, mainly based on RSI extensions on the higher timeframe, entering on the lower timeframe, targeting where we think it’s going to get attracted to as a magnet when the market uses its, puts in its move. So TP is one times ADR.

Now TP is usually a gap, one, two, three gap propulsion candle, or one ADR if you want to, yeah. You can target one ADR. Targets are up to you. With the EA, I have that set up to one ADR. But you could use half an ADR. Yeah, the smaller your target, the faster you will get out. But if you target more than one ADR, you’re gonna find it more difficult to escape your positions, because when price moves hard in the opposite direction, it will tend to put in a one ADR move or thereabouts.

If you target two ADR up here somewhere, and we covered this yesterday, what could happen is it could just do that. And then you’ve not got out, you’ve missed your escape, yeah. So that’s the reasoning behind it. Remember, assume worst case scenario. Assume that this is just gonna be a pullback. So big selling move, profit take, pullback. We just wanna get out on this pullback.

We don’t wanna get greedy. We’re not gonna target three or four times ADR. It may well do that. And if it does, brilliant. But if it doesn’t, think about your drawdown. We’re just getting out when the market lets us out because the market’s got to breathe. The market’s got to get out, so we get out with it. Yeah. Okay, so that’s mean reversion.

For the EA demo, do you have it set to sell only mode? No, that was buy and sell. It’s based on H4, that particular one. I mean, obviously you could use hourly M5, H4, M15, daily, hourly, whatever you want to use. But the higher timeframe, when the higher timeframe gets extended, that’s when we get in. So I don’t care which way it is, if they do a load of massive sells, I’ll get in long.

If they do a massive buy, I’ll get in short. Doesn’t matter which way they go, does it? We wanna get in when it’s extended so that we can get out when they put their profit take moves in. You said yesterday, one, two, three gap indicator, you started using later? What target method you use initially, ADR or FIB? I used a combination of FIB and ADR, both basically, well guessed. And support and resistance, obviously, support and resistance. If price pushes down here, And let’s say it gets down to here and it’s going to pull back.

If it does one strong move all the way down to here, you’d be looking at support and resistance levels. So if it did that, this is the bounce point. Boing. Yeah, it’s going to come back to that. Price is attracted to one, two, three gaps, propulsion candles, and support and resistance levels. Yeah, it hits resistance. It tries again, it tries again. It’s being attracted to this like a magnet.

Yeah, it pushed through it. And then when it pushed through it, it got attracted to it like a magnet again. And again, support and resistance is support and resistance because these are the magnetized levels that price wants to go to. Because there’s liquidity there, there’s buyers and sellers, equilibrium. Some people call it balance, yeah? This is what’s called an area of balance.

People are, we call it consolidation, don’t we? People are happy to trade here. And if people are happy to trade there, it will continue trading there until someone goes, I’m not happy trading here. And everyone goes, I am. And they go, no, actually we’re not. And then we get a breakout. So consolidation is just a period where the market participants, the big banks, the institutions are happy to exchange orders at a level, a price range.

That’s why we call it a range. It’s a range that people are happy to trade in, a balanced economy, a balanced pair, a balanced whatever you want to call it. That’s what it is. When we break out of it, it’s not balanced anymore. And it’s not a range anymore. It’s now probably a trend. Okay. And as we trend and we get to a point where everyone goes, actually, I’m not happy buying up here anymore.

We come down and then we come up and we see, are you happy buying here still? No. Oh, okay, fine. You said you were happy buying there. Yeah, but I’m not. Support. That’s all it is. It’s an area that people are happy to transact at. Richard’s just asked, I’m working nine to six job. What strategy could you suggest?

If you’re using the EA, any strategy you like, because you can set the EA up to automate the vast majority of this. If you’re trading manually, you need to be really trading H4. So I would suggest probably daily and hourly, because your higher time frame, basically with your higher time frame, whichever time frame you use for mean reversion trading, if you use the H4 chart, you need to check H4 every four hours for the extended condition. So we’re looking for RSI to be extended every time a candle closes.

So if you’re trading H4, you need to check this every four hours to see if we’re above here or below here. If you’re trading the daily chart, you need to check it every day, once a day in the evening, get home from work at six o’clock, have your dinner, while you’re at dinner, you stick your laptop on and you whiz through all the daily charts, what have you got extended?

Oh, excellent, that’s extended. I’ll flick down to the hourly chart and I’ll take a reversible that. Yeah, if you wanna trade M5 an hourly, you’ve gotta be checking your chart every hour. Every hour you need to see, is it extended on the hourly? And that’s why I built the dashboard. Because the dashboard, I don’t have to check that chart. I don’t have to do that check anymore. The RSI dashboard sits there and it goes, ping, we’re extended.

And I go, oh, I’ll have a look at that. I don’t have to check it. If it doesn’t ping at me, I don’t look at it. And we have periods where it does this. Summer months, the market quite often in the summer months is so quiet. The RSI dash doesn’t ping, doesn’t light up. It’s just blank. So I don’t trade, because there’s nothing to trade. You can’t take a mean reversion trade if there’s no extension, because there’s no mean to trade back to.

Yeah? So pick the time frame that suits you. We covered time frames one of the days. I can’t remember which day it was. It’s all melting into one. One day this week, we covered the time frames to trade. And I would recommend M5 for entry, H1 for higher time frame. M15 for entry, H4 for higher time frame. Time frame. H1 for entry and daily for higher time frame.

So those would be the ones I would typically recommend. If you want to trade daily entries, you kind of need to be using the monthly, really. And you’ll find it incredibly slow. That’s more of an investment timeframe and you would get in with larger positioning size typically there, so, okay. I bet most of us are in the same position. So looking to automate as much as possible, yeah. And that’s partly why I built the EA.

I’m not in front of my charts all the time either. So if I see something getting extended on the four hour and it’s getting close, so let’s say for example, I was looking through the charts and I saw this condition here, I saw this down here and it hadn’t hit the level, hadn’t hit the 30, but it was getting close here. What I might do is stick the EA on and say to the EA, when H4 gets extended below 30, OK, take the next reversal alert.

If it doesn’t, and it does what it did, and it just bounced, I wouldn’t get in the trade, would I? Then I’d look at it the next day and go, oh, it didn’t work out. Take the EA off. Done. And this is what I mean by semi-automation. Rather than what everybody tries to do with EAs is they buy an EA, they stick it on every pair and they want to go and sit on a beach and not do anything and make that thing make money for them.

It’s very, very few EAs that will ever do that, if any. What EAs can be used for is exactly what I just explained, is semi-automation. I still need to be in front of these charts watching it because it’s my money at stake. I’m not gonna let that thing run my entire trading life, but I can let it automate 90% of it so that it can do the heavy lifting for me. But if something pushes against me, I’m still gonna need to do drawdown control.

I’m still might need to act advanced drawdown control. So there’s all sorts of things I have to do, but the EA will automate as much as possible. But if you can’t use an EA, you have to trade to the timeframes that you can use. And if you are working nine to five, you can’t trade hourly an M5 or four hour an M15. You could possibly get away with daily and hourly. That’s where I’d try. Yeah.

Okay, day two, someone’s just said, whatever. Yeah, that’s fine. All right, so that is that one. So let’s knock that one in the head. You can come back and watch that. If you’ve got any questions, obviously you can ask again in the Telegram group. We will have a Q&A at the end of the session as well. Okay, next setup, trend pullback continuations. This is a variation of mean reversion.

So this is very similar to what we have just looked at, but we are only going to take trades in line with the trend. So these will tend to quite often have less drawdown, but you will also have less entries because you’ll find that you won’t have as many that you can find because the market ranges 80% of the time, it isn’t trending as much. So the trend pullback continuations, you tend to find less of them, but you will often always find as well that they are mean reversion alerts as well.

So your mean reversion alerts, if you like, that are in line with the current daily trend, if there is one, this is what this is. So again, M15 H1 entries are ideal. I wouldn’t go lower than that. You can, you can use hourly for higher timeframe analysis in M5, but obviously you’re gonna get more chop doing that. So M15 and H1 is perfect. Tools, same as before, RSI dashboard and or indicator, market reversal alerts indicator, stroke EA.

And obviously we’re gonna be using our moving averages, the 24 and the 72 moving averages. So step one, we wait for an alert on at four hour RSI. And again, I’m using H4, M15 in this example, to get above or below the 50 level. Okay. So the difference here is we don’t have to wait for it to get really, really extended because we’re expecting a trend continuation to happen. So with these ones, we can use the 50 level of the RSI, but that is for an aggressive entry.

I would suggest initially that you use either 60-40 or the normal 70-30, 80-20, whichever you choose, but those are your conservative entries. So these are the safer ones. And I’ll explain that in a minute. Step two, we check H4 to see if we are in a nice trend or we are looking like we are just starting one, right? So we’ll get an alert from our RSI that a condition is met, i.e. we have hit a specific level. We then check the chart to see if we’ve got a nice trend in place.

If there’s a nice trend in place, brilliant. If there’s not, we ignore it. We are pulling, step three is we, are we pulling back nicely to the 24 or the 72 EMA? Okay, so because this is a trend pullback continuation, we are getting in when we’ve got some kind of trend started and we are pulling back. So this here is where we are looking to get in, assuming the trend continues. So these are the pullbacks.

Yeah, so this is what trend traders trade all the time is the pullbacks. So we wait for the pullback. We can use the 72 or the 24 though because we’re position trading if the 24 doesn’t hold as we discussed most of the time the 72 will. So if we get in when we’re pulling back to the 24 there’s a high probability of that trade working. If that doesn’t work likelihood is it’s going to pull back to the 72 and then the profit take move will start, either the trend continuation or at least a pullback. So we get two bites of the cherry. So are we pulling back to the 24, the 72 EMA right now?

If yes, switch to M15 or H1, depending on what timeframes you’re trading, and you get in on the next reversal of that. Or same as before, put the EA on the chart and let it get in for me. Targets, I usually aim for one ADR move on these. So the reason I normally use one ADR with these is because if we are assuming we’re gonna get a trend pullback continuation, i.e. the trend is pulling back and is gonna continue, one ADR is very achievable.

Quite often with these, you will get a much bigger move. You’ll get two ADR, three ADR, possibly more, if you want to hold on for them. And you can take a partial profit on these if you wanted to. So you could get into a position with say a 0.02, one ADR, take a 0.1 off, put a break-even stop on and let the rest go. But you know what happens to break-even stops? They get stopped out.

So it’s entirely up to you what you do with it. But trend continuations, if we are going to continue the trend that we’re expecting, quite often it will go a lot further. But I aim for one ADR because I’m not greedy. I wanna get in, I wanna get out, I wanna put that profit in the bank. I want it banked in my P&L so I can move on to the next opportunity and tie up and not tie up my exposure.

Because remember, when I enter this trend continuation trade on US dollar yen, that’s one US dollar and one yen, I can’t trade again. So I wanna be in and out and get the next opportunity that comes up. And ideally, I wanna be in and out within a day or so with these, because if it’s a trend continuation, quite often those bounces happen and they happen quite fast, so you’re in and out.

Ideally as well, if you’ve got a good one, two, three gap or propulsion candle above you or a support and resistance level that’s obvious, use that as a target. And if that’s one ADR apart, brilliant, perfect target. So the considerations for this, are we potentially coming to the end of a long trend? So if you get an alert, and this thing has been trending for four weeks, yeah? And we’ve just pulled back again to the 24, you have to think to yourself at some point, all good things come to an end.

This trend has got to at some point end, why? Because this is just one big buying move, isn’t it? After a big buying move we get a selling move, okay? So you have to look at the size of the trend that you’ve got as well. But if that doesn’t happen, if that trend doesn’t continue and this is the end of the trend, we’re going to pull back to the 72 probably and bounce from there. So again, we’ve got that buffer. This is why we use those two moving averages. So ideally, we are just about to hit the 24 or positioned between the 24 and the 72. And I’ll show you that on a chart in a second. Is there an obvious target below to aim for in the form of 1, 2, 3 gaps propulsion candles?

I don’t like to see targets below me. I like to see targets above me. If I’m taking a long, yeah? So I’m assuming that we’re taking along here, we’re pulling back. If there’s propulsion candles here and I’m trying to get in along there, again, quite possibly they’re going to come all the way down here, aren’t they? So I might wait until we get there, and then hopefully that will be the move.

OK, and I don’t like to see new market structure formed or a lot of gaps in the opposite direction, which is just kind of explained. So let’s have a look at that on the chart. This is a trend, okay? And this is what I mean by a trend coming to an end. The trend is designated by obviously, it’s all green. Yeah, as long as it’s green, it’s in an uptrend. We’re looking to go long. When that stops, we go into a downtrend, okay?

So if we’ve got loads and loads and loads and loads and loads of green on the chart, if you zoom out and it’s just green all the way, go and look at the S&P 500 if you wanna see what green all the way looks like. There’s a possibility we might be coming to the end of a trend. Okay, but it’s the same principle as the mean reversion. What we’re looking for is a bounce. Yeah, we’re looking for it to bounce off either the 24 or the 72.

Yeah, that’s what we’re looking for when we’re in a trend. So we wait for the RSI to get extended below a level. In this case, I’ve got all of them drawn on the charts. You can see 50, 40, 30, 20. The deeper the pullback, the more likely the bounce. So you can see here with some of these, when you get below the 50 level, it still comes down further. When you get down to sort of the 30 level and it’s interacting with the 24, perfect. Pull back down again, nice strong pull back.

We pull back down to the 30 again, nice strong pull back. We got down below the 50 there and it continued down below. Now this is where I said about, we are either coming down and approaching the 24 or we are below the 24 and above the 72. So this zone here where we are below one, but above one, that is also a great spot to take trades because quite often it will pull back. It’s just a deeper pullback before the move. You see here is a great example of the 72 bounce, the 24 bounce failing, the 72 then supporting price.

Okay, so we get in, we expect the bounce, the bounce doesn’t come, we scale in down to the 72 waiting for the move, then we escape, right? So that’s exactly what we’re looking for. It’s exactly the same thing as a mean reversion, but we are saying, I’m only taking mean reversion trades in line with the trend, and I want to take the bounce off the 24, the 70s too.

So I’m assuming here that we are going to continue to hold the 24 moving average on the daily. All right? So this is the H1 chart. I’ve chosen the H1 chart in this case just to demonstrate where those levels are, because it’s easier to get them on the screen, where we got extended on the RSI. Yeah, these levels here, those are drawn on the chart on the hourly here.

So you can see, obviously, when the RSI got extended, below 40 in this case, we pulled down at that red line, and then we pushed up. Then again, we pulled down at that red line, consolidated for about a week, and then we pulled down and pushed up. And then we came down to here, and again, it pushed down and then it pushed up again from there. This was a 72 bounce, okay? So you wait for reversal alerts on your lower timeframe, which is either M15 or in this case on the hourly.

You can really trade either of them with this because remember the moving averages we’re using are daily. But if I’m using H4 for my extensions, I tend to use M15. The only reason I’ve used H1 in this case to demonstrate it is because you can’t fit all of those on an M15 chart on one screen. But imagine if you zoom down into M15, the reversal alerts are gonna come roughly the same place as they would on the hourly charts, okay? So the same rules apply for targets when we get in.

So here I’ve drawn where the reversal alert would have been after this one, this extension on H4. We’ve got a gap there and a gap there. Those are the targets I would have aimed for. And obviously we’ve got a resistance line there. So where price was pushed up and moved back from, that is a resistance. We were resistive there, we’ve pulled away from it. So price is either gonna come to fill this in, this 1, 2, 3 gap propulsion candle, or it’s going to fill that in, or it’s going to bounce off of support, potentially.

So when we’re getting in, those are where we should be targeting. And obviously, you could also draw a fib and look at where the 38, the 50, and the 68 retracements are. And you’ll find that one would have been virtually a 50. So that would have been a perfect target. If it’s enough, if it’s an ADR, if it’s an ADR is there, that would be a target, right? Okay, so that’s targeted. Same rules apply with also a backup plan, yeah?

So I’m planning to get in here. If it fails, where are we likely to get in next? Obvious, you’re gonna go for the 72. Yeah, so you’ve measured the distance there and say, right, that is an ADR apart, for example, it’s 126 pips. So you either get in half an ADR or an ADR between positions. So if that was 126 pips, I could probably go one ADR apart. I’d enter 126 pips apart, and then all I need is that sort of move to get me out. We’re up to there for a nice profit.

Okay, and if the 72 was to fail, for example, if this had failed and it pushed down, then you’re gonna need to look for support resistance. Okay, so there’s a good example actually here. You know, you can see here, this is an example of when the trend is coming to an end. You can see it’s just like fizzling, yeah. We’ve bounced off the 24 nicely, we’ve come to hit the 72. The fact that we’ve hit the 72 means the trend is weakening because it’s pulled all the way back down here.

We broke back above it, but we didn’t really get anywhere before we came back down to the 72. So there was hardly any movement. And this is what I mean by, I don’t like to see new market structure forming. High, low, high, low. Okay, so this didn’t manage to get higher than that. So the market structure is obviously shifting the other way.

So that for me is a trend over. So when we pull back down to here, I would probably be not be looking to take a trade. But when we got down to here, I would be happy to take a mean reversion trade. All right, so that’s that one. Let’s have a quick look at the EA taking trades for us on that. So again, I’ve got a little set file which will show some examples of trend pullbacks. Going back further on this one. Okay, so we’ll start that off.

So the first entry, I think, is straight away on this one. Very similar to previously. So we’ve got the, let me just pause one second. So we’ve just taken our first entry there. So you can see here on the, because we can’t see the daily moving average, the MA for the daily is at 13778. So that’s the moving average for the daily, the 72 moving average is way down there. So what we’re saying is I want to take long positions when we get extended on the four-hour RSI below the 60 level, but we are above the 72, i.e.

while pulling back towards the moving average, and the H4 has got extended to the downside. Then I want you to start taking long positions for me. So it’s just replicating what I’ve just shown you. So the daily moving average is below us. The four hour RSI is below 40, and that’s the trigger that I’ve used. So I’ve said enter on M15 when those conditions are met, which is why it’s taken that initial trade. So the same principle applies, we’re looking for one ADR target on this.

So the first entry is obviously taken. I think it takes two more entries on this example. So basically price pushes down into the 72 moving average and then it bounces off the 72 in this particular example. So we’ll just let this play out. Second entry taken there, we had a reversal alert there. So your average is now sitting somewhere around there. We’re continuing to push down towards the 72, so there’s more and more selling pressure coming in. Then we’re going into a consolidation for a few days.

And this is what I mean when I keep saying the market consolidates 80% of the time. This is what we do the majority of the time, which is why mean reversion strategies work. And obviously we’re on a very low time frame here on M15. So it’s a low time frame we’re looking at, so we’re seeing a lot more chop than we would if we were trading the hourly charts, which are obviously going to be a lot cleaner. So we push down and we’ve taken a third entry on that one there. So our average is going to be somewhere around there. Okay, so on the four hour, we would have been pushing down and down and down. We’ve hit the 72 moving average, which has been coming up to meet us. And now we’re bouncing off the 72.

And there we go, we’ve hit our target of one ADR. So the total of those three positions is one ADR in profit. So it’s taken the whole thing off. I think there is another trade which happens around the 17th from memory. But that I think is just, it gets in with one position. So what we’ve done here is we bounced off the 72 moving average. We’ve pushed back up above the 24. And what it does is it pushes back down to the 24 and bounces again off the 24.

So we’re going to get a pullback. I think it’s here it enters. There we go. So the moving average on the daily is 131 to 79. So it’s somewhere down here, just around there, is where the moving average is, it’s the 72. We’ve pulled down below the 40 level on the RSI, and then we’ve started to bounce, so it’s taken its entry.

And then I think we go into a consolidation for a few days here, while we’re waiting for the move to continue. So obviously this is a continuation of a trend. So we’ve bounced nicely off the 72, now we’re bouncing off the 24, we’re just going to continue on our trend. Sorry, I think it’s another position there. There we go, we’re out on those two. Okay, so held that position for a few days. So he bounced back down again off the 24 and took a profit. Okay, so that’s basically trying to pullbacks. Any questions on those?

All makes sense. So it basically is the same as being aversion, but it’s for people that want to trend trade more. And as I say, you tend to get into less positions because the trend will always try to continue. When you see a trend happening, because something is trending, the market will want to continue that trend and it will resist coming down because there is a lot more buying pressure than there is selling pressure. And that is why we’re trending. So when the pullbacks are deep and they happen, you tend to get those buyers stepping in because all that is, is a profit take on the buyers before they continue their buying move.

Okay, but all trends have got to come to an end at some point. So that’s trend continuation. Now we’re going to look at a couple of scalping strategies as well now. Okay, so the third one is ADR reversals or scalps. And these tend to be M5 entries. Okay, so these are using the ADR reversal indicator or an ADR indicator of some description and all the dashboard.

Okay, and obviously I use the dash because I can sit here all day doing absolutely nothing and waiting for the ADR dash to ping at me. And when it does, I will go and have a look. And you can use the market reverse alerts indicator or EA to get into the trades. Okay, so you need some signal indicator when ADR gets extended to tell you to get into a trade. So the first step on this, very simple. We wait for an alert that ADR is hit.

So we know obviously price has an average daily range. It stays within that average daily range around about 58% of the time. When it exceeds the average daily range it is an abnormal move and therefore if it’s pushed that hard there tends to be a profit take move happening after it. A lot of times you’ll find these happening on breakouts. So you will find that the market will be sitting in a range for a while okay and sometimes what will happen is it will push out of that range, okay, and you know why it’s doing that, we’ve explained it, I’m not gonna explain it again. And then it will pull back into that range. And to do that move, it needs to push harder than normal, which takes price beyond its average daily range.

And then they move it back. And that is why ADR works so well. The other thing that happens with breakouts and ADR is you’ll be sitting in a range and the breakout will actually work. It will break out, pull back, and you will start to trend. But even if it breaks out, what tends to happen is at some point you’re gonna pull back because for the buyers to push price that far out of a range, they get exhausted and they need to take profit before they continue that additional move.

So if price pushes out and we do get a breakout, you’ll get that move continuing. And sometimes you will find that it will break out hard and then it will just consolidate for a little bit, push higher, and then you will get the profit take move. So sometimes you have to wait for ADRs to play out over a period of two to three days before that move happens. But quite often you will find they happen when you’re in a range.

Now, if they happen within a trend, i.e. we’re trending up like this, okay, and we get an ADR hit to the high, I usually don’t take those because we’re trending in that direction. I always like to, if possible, be in line with the overall daily trend. So if ADR hits to the downside, those trades I would like to take. All right.

So I wait for an ADR alert to hit. I check my current directional bias on that pair. Do I want to get in? Are we in line with the current trend? Are we range bound? Is this likely to come back down? So I have a look at a higher timeframe really and decide whether or not this looks like it’s coming to a support resistance level that it’s likely to bounce from. Is it a breakout happening or are we in line with the trend? And this is pushing hard in line with the trend. If it is, I’m not really interested in getting into it.

I check H4 RSI level. And basically, I need to see if that is nicely set up as well. So with the H4 RSI, I want to know if we are in an area that we are likely to bounce from. So for example, let’s say ADR hits low. So we’ve got 100% ADR line there. We’ll look at an example in a second. And we’ve hit the low. And the H4 RSI is also down below the 30 level. Okay, so not only have we hit ADR and likely to bounce, we are also extended on the H4 RSI.

So that’s an additional reason for me to get into that trade. If the RSI is fairly high, i.e. the RSI is kind of up at the say 52 level, just above the middle. I’m probably not gonna want to take this trade because what that signifies is we’ve probably come up and we’re pushing down. Yeah, so I check the H4 level to see if I’m in an area that is set up to go in my direction. IE, are we likely to bounce?

Is the elastic band stretched? If yes, I switched to M5 and I get in on the next reversal alert or again, put the EA on the chart and just let that get in and trade it for me. Target for these, because they are scalps and we’re on the M5 timeframe, I’m aiming for a quarter to a half of an ADR move. Okay, that’s the ideal. And I wanna be in and out within 24 hours, ideally, okay?

And again, we wanna look for good one, two, three gaps, propulsion candles to aim for, which are caused ideally by this ADR move. So when price is pushed down hard and managed to get you to hit the ADR extension, we would love to see a propulsion candle causing it. So a big move somewhere where we’ve got a target that they are likely to be drawn back to as a magnet. Yeah, and then when we get our alert, we look and see if that is within a quarter to a half of an ADR. If it is, it’s a good trade opportunity. Considerations. Is there an obvious support and resistance where we are reaching to now? Same as usual. We look at our chart, we have a look to the left and we say, yeah, there’s a support level here. Looks like we’re bouncing from it. Perfect. Another confluence, another reason to get in. Is there any news that has caused this move that may fundamentally change direction?

You will find on big news events that you will get things moving 200, 300% ADR. If they move that far, there’s probably a reason for it. And it might be that there’s an interest rate change or some economic factor that is making the market change direction. In that case, we want to be a bit careful. And is there an obvious target to aim for in the form of one, two, three gap or propulsion candle? So here’s an example from the EA.

So just taking a screenshot of the EA actually taking one of these trades. So you can see here, we’re nicely extended above H4 on the RSI, we’re above the 80 level, okay? Price pushes above the 100% ADR extension, okay? If you wanna be more conservative, again, we looked at this, didn’t we? Move conservative entries, your more conservative entries can be 125 or 150. Okay, so in this case, we pushed up, we hit the 100 level, but the first reversal alert we got on M5 was way above 150.

So there’s a nice entry. Our target is a quarter of an ADR, which is here, or half an ADR, which is here. Quarter of an ADR is obviously a lot easier to hit than half an ADR, but look at where price is likely to pull back to at some point. This is an obvious level of probably support where we’d probably come back to, but just target quarter to a half of an ADR.

So this is the trade after it played out. That’s where we got in, okay? The quarter of an ADR target was hit the same day. So this is where we got in to the trade. We had that candle down there, and then we pushed down and we hit a quarter of an ADR on the same day. But if you’d have targeted half an ADR, you don’t have to wait until the next day. So obviously it depends on your sort of level of greed, if you like, but these are scalp trades, so they’re designed to be in and out fast.

So these are positions, obviously, which can also go against you. So you need to be aware of that. So the same rules apply for a backup plan in case things go wrong. So you look at where, if this ADR reversal is not going to work out, where are we likely to be heading to next? Where’s the nearest support and resistance level? Is there one, two, three gaps above me that they may be trying to get to?

Price may be magnetized towards. So the same rules apply with this. But it’s a very, very, very simple strategy. You are literally waiting for price to push harder than the average move today, and then you are looking to play the pullback move on it. So we’re just saying when you’ve pushed up, you are gonna profit take, because everybody that is bought here is starting to sell. Okay, and most of the time, within 24 hours, the quarter of ADR target will be hit, if not the same day.

A lot of the time as well, you will find half an ADR is hit within the day. And if this is a move where they are reaching for a level, remember I said, are they reaching for a level that you can see on your chart? So like a support and resistance, they might be trying to put in a double top move. Yeah. You will often find they will reverse completely and they will be the final move before a big reversal starts.

So there’s lots of good reasons to take ADR reversals. But bear in mind, they are also potentially positions you will need to get into and add additional positions to because they don’t always work. It can just be a strong push on a breakout. Like I say, if that was the level for breakouts, everybody had their pending orders here for their breakouts. It did break out and it pushed. So now we’ve got momentum to the upside and we’re looking to do a trend. So it might push up for a couple of days, a couple of hours, we don’t know, but it might continue to push on a trend before it puts in its pullback.

We just need to make sure that we are getting into the position as normal with spacing that allows us to get out of that trade. So spacing on these, I would normally go with half an ADR. Some people are trading these with quarter of an ADR between them. And the reason they use a quarter of an ADR is because obviously the ADR is set up with 25% increments, quarter of an ADR. So it’s very unlikely price will push above 200% ADR.

So if you get in at 50% ADR and it pushes up above 175, you could take another trade very quick. Your average is there. So you literally need one candle to get out. Remember we’re scalping low timeframes. A 10 minute move can get you out. Now a half hour move can make you a very nice profit. We’re scalping. So we don’t need, let’s say this was an ADR hit and we got in here.

If we’d have entered our second position up here, look at the profit. It can be massively profitable. And some people also use these with a stop loss strategy. Okay, so these are position trading strategies, but you can use these with the stop loss. A lot of people are using ADR reversals, and this is a strategy I’ve taught in the past, and I’ve used it the past a lot of time, where you enter your first reversal alert, and you will put a stop at the 200% level.

Because we know it’s rare that price gets up to 200%. And you’ll put additional entries at 175 or 200, or whichever you want to use. So let’s say you hit 100, you’d put additional entries at those levels, and scale in with a stop loss at 200. So you can use this as a traditional stop loss strategy as well. Obviously, we know what happens with stops. You get stopped out. Sometimes they work, sometimes they won’t.

But because we’re getting in that exhaustion, they quite often will work the same day or the day after. So let’s have a quick look at the EA again, taking some ADR reversal trades for us. So I’ve got an ADR set file ready to go, ADR reversals. And this is just getting into positions and we’re just using an aggressive filter on this one. So we are entering when price gets to 100% ADR. Just change the color of that to green or teal, doesn’t matter either or.

And we are targeting half an ADR. So we’re going with a decent profit target rather than a quarter. So we’re being a little bit more aggressive with our entries. We’re getting in quickly at 100% ADR, and we’re targeting a half ADR move. All right. So let’s let this run. I think the date on this one was the 8th.

Again, just looking to find entries quickly, because sometimes you will sit there for days and days and days and not find them. So I found some time frames where actually we got into some quickly. So we’re not sitting here watching this tick away for days on end. Okay, so let me let this go. So you can see the ADR here is 80 on this particular pair at the moment on the pound US dollar.

So we get a push today, oops, all the way up. So you see the ADR levels adjusting as price pushes up because it measures from the high to 100% of ADR. And it measures from the low up to 100% ADR. So we get a bit of a push this day up to the highs. And this is the one that pushes up to 150. We get our first reversal alert here. So the beauty of using the reversal alert indicator is that you don’t get in at 100% ADR just because it’s hit 100% ADR.

You get in when the signs of weakness starting to come in. And this is what this is showing you. It’s showing you the price has pushed back down. So this could be the start of the reversal. So we’ve pushed up and we didn’t actually take an entry until almost 150 ADR. So it’s getting us in a little bit later. So I’m zooming a little bit because it speeds up slightly when you zoom in. So on this particular case, it was a breakout.

So price consolidated when it got there. There’s two things that will happen. It will either break out and consolidate or it will break out and it will pull back. Okay, in this particular case, we broke out and we consolidated, but we pulled back enough to get out of the quarter of an ADR. If we’d have been targeting a quarter of an ADR, we’d have been out virtually just, well, we’d all been out the same day.

But as it happened with this one, it went into consolidation on the next day, and then they put in a further down move on the following day. So this is the one we just saw the screenshot of, basically. We’re gonna push down and approach 100% ADR, and we’re gonna get out at half an ADR in profit. There we go. So in and out within 24 hours, or just around about 24 hours in that case, that’s a typical ADR trade.

I’ll let this play on because we get a second entry here, and this is an example of one that doesn’t work, which is why I wanted to show you as well. So on this one, we get into an entry as we we push hard so we hit 100% ADR again but on this one we need to take multiple entries as price continues to push. So remember I said this was a breakout yeah so remember our range what we just traded was the initial breakout and pullback okay now the breakout is continuing into a trend so we’ve pushed hard again, we’re pushing off into our trends now, we’ve hit ADR, so we’ve taken our first position. And this is now in a trend, so we’re now trading counter trend.

So we’ve pushed up, hit ADR, taken a position, and we are continuing to push. So the EA is set to take positions at the moment, one quarter ADR apart, so it’s getting in aggressively. So this is a 25 pips apart on that position. Consolidated for the rest of the day, moved into the third day, or second day in this case rather. Pushing up a little bit further again. And remember, we haven’t taken profit on any of this move.

It’s just been buyers, buyers, buyers, buyers, and now the sellers start to come in. You see, we took another alert as the selling pressure started, and we exited all three of those positions. So that trade again, we were in and out within 24 hours, taking three positions. So we scaled in and scalped back out of the position. All right. So the nice thing about these ADRs is because you are getting in on a daily strong push, the move has already happened.

The buyers are already in. So these buyers now, the entire day’s worth of buyers are all sitting there needing to hit the opposite direction button. Okay, and even if we go into a consolidation the next day, and then another buying push, we now have two days worth of buyers sitting there waiting to press the sell button. So the sell move tends to come in a lot faster and harder as you saw there.

So literally within half an hour, we’d undone pretty much a day’s move. And obviously then it continued to push back down further. So this is the selling move off of this big buying move. Okay. So that’s ADR reversals. Very, very, very simple strategy. Literally it hits ADR. If it’s in line with the current trend, or on the four hour chart, it’s extended, we get in.

Okay, very easy. Anybody got any questions on those ADR reversals? I think a few of you may have been trading those already because a lot of people have bought the ADR reversal indicator and the, you know, the stop loss version of that strategy is brilliant. I traded that for a long time, works very well. The trading without stops works even better. As you just said, you get in, you get out very, very quickly, they’re beautiful stop trades.

But be aware, obviously, if you get in too quick, you may have to get into drawdown control faster as well. Because if you’re getting in fast with positions close together, and you get a three to five day push happening at the same time, you do run the risk of going into drawdown and need to do advanced drawdown control. But the amount of ADRs that will get you into that compared to the amount that will get you in and out within 24 hours will far outweigh the drawdown control you have to do.

So as long as you’re banking regularly, you’ll be fine with those. Okay, so that’s ADR reversals. Set up for hedging. We looked at hedging yesterday. Hedging can be done on any timeframe. The higher the timeframe, the less entries, the less drawdown, the lower the timeframe, the more dangerous this is, okay? So, hedging is a more risky strategy and you need to make sure that you space your positions out nicely with ADR, at least an ADR apart.

Half an ADR with hedging is doable if you’re not gonna use any kind of Martingale or hybrid Martingale system. If you’re going to use anything like that, you need to be spacing out at least an ADR apart, okay? Because you’re not gonna be getting into these positions necessarily when a higher timeframe is extended, because hedging doesn’t use a higher timeframe analysis. Okay, so it is a more risky strategy.

Remember going back to our strategy, what a strategy consists of, you’ve got different indicators and levels, but when we’re using higher timeframe analysis along with all of those parts of a strategy, it’s much more effective because we’re getting in when the higher timeframe is extended, when a move has been extended and pushed on a higher timeframe on a low timeframe. So it gives us our kind of close entry on the higher timeframes push, which means that we are more likely to get out of it faster.

So hedging doesn’t have that high timeframe analysis. Okay, so it is a little bit more risky, but it’s also incredibly rewarding because you bank profit constantly. Every single day, you will be banking profit with it and you deal with the positions that go against you. So hedging M5, M15 or H1. You could also hedge using H4. I haven’t tested it on H4, but I haven’t tried it on H4 myself, but those timeframes are the ones that work the best.

RSI dashboard or indicator plus market reversal alerts or the EA. That’s all you need for this. So it’s very, very simple. Step one, we wait for an alert that the RSI is above 60 or below 40. So we’re not looking for price to be massively extended. If you want to, however, you can. So you could use 70, 30, 80, 20. And again, I would encourage you to experiment with this. So when the RSI gets extended on the timeframe that we are trading, we take a trade regardless of direction, all right? So when RSI, whatever those levels are, pick a number, they can be anything you like.

When we get up there, we go short. When we get down there, we go long. It is as simple as that. And we will take positions in both directions. We’re hedging, okay? So you have to be able to be working with a broker that allows you to hedge. So we take the trade regardless of direction. Step three, we scale in if price pushes against our initial entry, and we space our positions out at least half an ADR.

I would recommend a full ADR, but half an ADR, if you’re gonna go with a flat structure for your entries, i.e. you’re gonna take 0.02s on every entry, half an ADR is great. If you’re gonna use any kind of Martingale where you’re increasing your lot size and as you go, use an ADR, minimum of one ADR. Otherwise you will find sometimes you may get into big drawdown, okay? And you don’t wanna do that.

And you’ll have to obviously enact drawdown control a lot quicker. So we space our entries out the same way as we would as normal, at least half an ADR to an ADR apart. We take every alert that meets the criteria above, regardless of direction. So we just keep getting in as price moves in whatever direction, waiting for that profit taking move to happen, okay? So targets are half an ADR or a monetary value in this case, like 10 pounds.

So what I mean by the monetary value of £10, I would use a percentage of your account. So if you’re trading a £3,000 or $3,000 account, for example, £10 is going to be somewhere around sort of 4% to 5% of, sorry, 0.4% to 0.5% profit. So we’re targeting a small amount of profit. These are scalps, these are hedging scalps. So we don’t wanna use big targets. We wanna be in and out and we wanna take a small amount of money, but we’re gonna be doing it regularly because we’re trading in both directions.

So this way you will either just get half an ADR scalp profit, or if you need additional positions, you can target the 10 pounds or the monetary value. So you would pick an amount that is equivalent to roughly 0.5% profit for you, okay? Or lower if you want to. The lower your target, the quicker you’re gonna get out of these positions. So hybrid Martingale works well here, but if you’re gonna use that, you need to increase your spacing ideally to one ADR.

But I’m gonna show you an example of it using hybrid Martin go in a minute. Considerations, this is a hedging strategy. So we are looking to profit from the natural ebb and flow of the market. So because of that, lower timeframes tend to work better because we are looking for chop. We’re looking for spike movement up and down all the time. M5 and M15 are what gives us that. Higher timeframes like H4, the movement is so much slower that the trades take such a long time to play out, it doesn’t work as well.

So M5, M15 seem to be best suited to this. When one trade loses, the other one wins. So we only worry about the trades that get squeezed if that happens, okay? So the danger here is we are not getting into positions when the market is extended, as I’ve said, or using multiple time frame analysis. So drawdown control may be required more often. And basically, this is a screenshot of how hedging works. So we’re using the M5 time frame in this example here. So you take entries when the RSI level hits the extreme on this entry time frame, so on M5. So literally, when we get above the level on RSI, we take shorts.

When we get below, we take longs. Regardless of what positions we have on at the moment, we just get in. So we get short here, we get long here, we get short here, we get long here. So it is literally that simple. We’re using one timeframe and we are just trading the RSI, but we’re trading in both directions. And what this does for us is it means if we were to take a short, okay?

And it pushed against this, we have an opportunity to take another short. While we’re taking that short, we can take a long and put profit in the bank. So we’re making our P and L, can’t we do that very well, that act? B and L, we’re making it profitable. Okay, so we’re banking profit constantly. So you can see here, we took a short there, but we banked twice, three times in the amount of time it took us to exit that short position.

So this is from, this is Friday, Monday, Tuesday, Wednesday. So in four days, we banked three long profits and one short profit. So four profitable trades in four days. So every day we’re banking money. Then we took another long there and exit it there. We took another short there and exited it there. Because we’re trading in both directions, we’re continuously building a pot of cash. Our P&L is getting fuller and fuller and fuller on a daily basis.

So if we do get a position that goes against us, because we’re not using higher timeframe analysis, we’re not using that to tell us that the market is very extended on a higher timeframe, and we’re gonna get in on a lower timeframe, there is an opportunity for the market to squeeze us further in one direction. So this is why you should ideally try to space your positions out. Okay, so here’s an example again, we’ve got a cell there, two cells there.

We took a buy here, a buy here, buy here and a buy here and got out there, okay? So this is on the hourly chart, right? So this is moving up to the hourly timeframe. You can see it’s all happening an awful lot slower. So we got into a buy on that Monday and it took two and a half weeks to get out of the buy position. But while we were waiting, we pocketed sell profits. Okay, so we’re banking money all the time we’re waiting for these to play out.

And obviously as market moves down, we know there’s gonna be that opposite move coming as people take profits. Okay, so there is no higher timeframe analysis. So we’ll have a quick look at the EA taking some trades for us on this one as well. Let me just get my set file up so you can see what it’s doing. So literally with this, we’re just taking entries. We are using the current timeframe.

We’re using the 14 RSI on 6040, okay? In this case, and we’re looking to target 15 pounds or half an ADR. And this one we’re getting in half an ADR apart, all right? So we’ll let this one run. I’ll just put the time in on this. Again, I found a level that gives us some decent trades that work quickly. So that’s the wrong timeframe. So I’m gonna run this one on M15. Llewellyn’s just asked, does your spread not have massive impact on the strategy if using M5?

No, because I’m targeting half an ADR. Your spread is gonna be one or two pips, right? Your ADR is gonna be something like, in this case, 130. So I’m targeting, so you see, we’ve just taken a couple of buy orders there, taken three buys and one short, as we’ve got extended on the RSI. So yeah, so the distance between trades is 67, so that’s your target as well. I’m targeting half an ADR.

So I’m targeting 60, 70 pips. If my spread is one, two, three, four, five pips, whatever it may be, that’s not gonna really come into it. Yes, you’re obviously always gonna have a spread. There’s nothing you can do about that. But yeah, I mean, it does come into it. Proper scalping, where you’re scalping real low timeframes, if you’re targeting like five or 10 pips, which is what most people see as a scalp, yeah.

I don’t class that as a scalp, I class that as suicide. If you’re trying to get five or 10 pips out of the market, you’re gonna get chewed to pieces, not only with stops, but with commissions, with spreads, with swaps, with everything. So I wouldn’t do that. For me, a scalp is a short move. Remember price moves in average daily range. For me, a scalp is a quarter to a half of an ADR. That’s a small move, because we know it moves an average daily range of 150 pips.

So that’s a decent target. Sorry, while I’ve been talking here, obviously we’ve been taking some trades. So you can see, obviously, we got into our first position here. Now, this is an example of, obviously, how you can go into more drawdown on these because we haven’t got a higher timeframe RSI telling us that the market is already extended. We could be getting in down here when the market is high on the four-hour RSI, couldn’t we?

So, but what we are getting on the lower timeframes is much more of this. So as the market moves down on the higher time frame, it doesn’t move down like that on the lower time frames, it moves down on the lower time frames like that. Every one of these is giving us an opportunity to get out as you can see. So we’ve entered a long because we’ve been extended. We’ve had to get into four of them before we’ve taken our profit. But on the way, we took profit there and we had another short position there, but we took profit there. And we’ve just taken another long there. Okay. So over the period of that one week, we’ve had three trades all turn into profit. So we’ve banked 1%, probably one and a half percent on our account in a Okay, and that’s just using that one pair. I’ll let this one run on.

It just continues to basically take trades, I believe, and keep banking profit. So we took a short there because we’re extended there. We took a long there, obviously, because we’re extended down there. So that short has played out while we waited to scale into this long. So all of these buyers, these sellers here now need to become buyers. Okay, as it pushes down further, we take a sell profit, take another sell there.

So this sell profit will happen and then we will take another buy. So now we’ve got three buys on, but we’ve been banking profit all the way down with three sells. Taking another sell there, another extension above the 60. And then we take another buy. One there. So if this continues to push up now, we’ll exit our buy position.

If it continues to pull down, we’ll exit our sell position. And we’ll deal with the other positions as we need to. So it’s pushed up, we’ve executed our buy, and now we’ve got a sell and a buy because we’ve had a trade in both directions. So we take the profit on the buy, now we deal with the sell order. So all these buyers that have come into the market now will start to sell off. And if they continue to buy, we’ll wait for the next profit take move and we’ll get out on that one.

So you can see how it just basically uses the ebb and flow of the market. And remember, 80% of the time, market’s doing that. This works fantastically well. If it pushes out and breaks out, it will pull back and profit take from that move, in which case we exit, and it does that. So even when we get a breakout in the wrong direction, it will still have an ebb and flow as the market participants take their profits. And we’re just literally riding those waves, but we’re using both directions.

Now this is set up fairly aggressively here. We’re set up at the moment on 60-40. If you want to, a better level would be 70-30, more of an extension. You’re getting to less positions, but those positions we’re more likely to put in their pullbacks. And again, 80-20 would be another level you could use. ADR spacing, at the moment we’re using half. If you use one ADR, it will be less drawdown, but you’ll still be able to profit from the same moves. Okay, so you can see there, we’ve taken another cell, we took a buy there, we took a buy, two buys there, we got a buy there, we took a sell there, we’ve taken another sell profit there.

Okay, so we’re continuously banking. We’ve got one sell on, we’ve got a buy, buy and a sell. Let me zoom in so you can see them a little better. So while we’re consolidating, we’re not losing money, we’re not making money. So I’ve got another buy, taking another set up there and so on and so forth. So I’ll stop it there. But obviously you can see what we’re doing.

We’re just continuously banking money as the market moves with its normal ebb and flow. But the lower timeframes you’re always gonna find are gonna be more effective for this type of strategy because the ebb and flow and the chop is more prevalent on lower timeframes. But anything up to H1 will work with hedging strategies. And again, with all of these strategies, these are the ways that I use to get into the market. And you can fine tune these using RSI levels and spacing between ADR.

Remember what we looked at yesterday, the things that affect drawdown, which is the only thing that we worry about with position trading, the things that affect it are your lot size, your spacing between your positions and obviously your profit targets. So that’s it for hedging strategy. Any questions on those, on that one? Of all the strategies, I would say that is the riskiest, but that will also generate the most profit.

So you will have to do more drawdown control with a hedging strategy, but equally your P&L will grow at an exponential rate much, much, much faster. So there’s pros and cons for each of the strategies. Okay, so all of those strategies are ways to get into the market at potential exhaustion points. You pick the ones that make the most sense to you and concentrate on that particular one, okay?

So I would recommend picking no more than one or two. The mean reversion strategy is my bread and butter. That is what I spend most of my leverage on. So the mean reversion where we are pushing hard on one time frame, on the higher time frame. But do not trade every instrument under the sun. Whichever strategy or strategies you choose, just make sure you don’t trade all instruments. Okay. Remember the exposure rules, the two pair rule. Okay. Remember your exposure is very important. The more pairs you get into, the more potential drawdown you’re going to have.

Okay. You will find multiple instruments alert at the same time with all of these strategies, because what you’re going to find is currency pairs will push at the same time. So if the pound is pushing hard in one direction, you will also find that all pound pairs will alert at the same time. So if the pound does that, you will find pound New Zealand, pound CAD, pound yen, pound US, will all give you an RSI alert or an ADR alert, okay, because they’re all going to push at the same time. So make sure you just pick one or two of those to trade at most, okay, so make sure you’re filtering your trades to pick the best setups. And if you see PoundCad, PoundNewZealand, PoundDodd, PoundYen all alerting at the same time, look at all four.

Which of them is hitting a good support and resistance level? Which of those looks like the best one? Pick that one. You’ve got to pick one, you can’t pick them all. But if you do want to pick them all, make sure your lot size is half of what it would normally be. Performing your own back testing with the EA. Okay, so you can easily test and refine these strategies yourself using the Market Reversal Alerts EA. You can download a demo of it, play around with it.

Okay. That’s how I’ve fine-tuned my strategies over the last year. Since I built the EA, it’s allowed me to do faster, more automated backtesting and analysis of levels of RSI and all sorts of things, drawdown and everything. So use the EA if you’ve got it, or if you want to get it, because it will speed up your learning curve with position trading a lot more. If you’re gonna test using the EA, always start with control points as initial test, okay?

It’s faster and it will give you an indication if a change is positive or negative, or even if a strategy works at all. Ideally test it with tick data. So you can purchase Tick Data Suite, which integrates with MT4 and gives you a much greater time ranges and accuracy for your tests. So I’ll just quickly show you Tick Data. So the Tick Data is here. I have this.

You won’t have this in your MT4 if you haven’t got Tick Data. But I can download Tick Data, which goes back over a decade, okay, which allows me to use data that is more accurate and over a longer period. So I can test strategies over a longer period of time to make sure they’re robust, okay. So tick data is very, it’s worth getting if you want to do it properly. It’s something like $50. It’s a one-off purchase and you will have it there to do thorough testing.

So I’d highly recommend it. Once you’ve got a strategy that looks good, back test it again on every tick setting. So to give you the confidence that it works on micro data, because the control points is not as accurate. However, I found it to be virtually the same, to be honest. And then apply the strategies to other instruments to test robustness. Okay, so if you find something that works well on the pound US dollar, for example, go and test it on the other pound pairs.

Test it on some Euro pairs. See how robust that strategy is, see what difference it makes to draw down, see which pairs work well. And then apply it to other timeframes to see if you can improve it or if it gets worse. So if you find a strategy like the ones that I’ve got that work really well on M15, how well do they work on the hourly? Do they give you half as much drawdown and produce the same profit?

Brilliant, switch to hourly trading. Okay, so if you want to use the EA, that’s what it’s for. It was developed as a backtesting tool and to automate simple entries with my strategies. And it’s invaluable in that respect. I’m gonna be doing a lot more backtesting with the EA in the live rooms as well. So if you want to join me in the live rooms, you can do. And we’re gonna dedicate an entire day in the live rooms to backtesting each week just to try and develop and improve on the strategies and come up with new ones.

Yeah, so you can use this on any strategy, okay? The methodology of position trading isn’t just restricted to RSI and market reverse alerts indicator. You can use it on anything you like. It’s just a way to get in and get out of the market. Okay, so that’s my setups. Final notes, you will have noticed how virtually every setup I take revolves around exhaustion, whether it’s mean reversion or trend pullback. I’m looking for price to be tired. Remember the elastic band.

If you take one thing away from this entire bootcamp, remember that elastic band. Okay, when the elastic band is stretched, it means there’s too many people in one direction. Those people have got to go in the other direction to make a profit. At some point, there will be a pullback or a reversal on that move. RSI is king. I never take a trade without consulting the RSI and making sure we’re ready for that pullback or reversal. If the RSI is king, patience is queen. You’ll have many times where price consolidates and goes sideways for days or even weeks without it hitting your target or getting you into more positions. This is part of trading.

We have no control over price. There’s nothing you can do about it. Okay, you have to just accept. Sometimes your trades will sit there for days and you’ll have days and weeks where you don’t bank any profit. It happens. It’s rare, but it happens. Okay, so you’re gonna have to get used to it. You have to be patient with this strategy.

We’ve got our pies in the oven. It’s a kind of a terminology that I use a lot of time in the live room, okay? So when we’re entering into trades in our positions, we have got our pies in the oven, we’re waiting for it to cook. So that RSI gets extended, we put our pies in the oven. When it pulls back, they cooked, we take them out and we make our profit, okay? Sometimes things just take a long time to cook.

Okay, exposure and over leveraging with too large lot sizing on too many pairs is always the downfall of people who fail using this strategy. Trade small, 0.01s, 0.02s, and get used to being in drawdown. Get used to seeing your drawdown build, get used to seeing your drawdown disappear and turn into profit. Allow the trades to play out and work so that you can see these market cycles working and how quickly five or 10% of drawdown vanishes in one swift move on news and your bank account grows as a result.

Okay, trust in the methodology. Try it for a month, use the live room if you wish, okay? And yeah, basically just go and trade. Just before I finish up on that, the live room is run every day at 12.30. If you wanted to come in and utilize that, I do an every pair analysis, look at open positions. I take trades, I act on alerts, live chart analysis, basically just me doing everything I’ve just taught you over the last five days, okay?

So it’s just me doing it in a live session. There’s a Q&A every day, obviously. At the moment, I’ve got a new schedule which is starting next week. We’re gonna be doing profit analysis and opportunities every day of the week. So we’ll be looking at what we’ve closed out, what we’ve banked, where our current positions are, opportunities in the market, okay? Mondays, we’re gonna do a full market overview of every single pair.

We’re gonna look at what’s called the Commitment of Traders Report, which is something else I can introduce you to. It’s not necessary, but there’s something else that you can look at to give you directional bias as well. We’ll do an overview of all the pairs. Backtest Tuesdays, we’re going to be looking at the EA and doing backtesting, trying different strategies, trying to improve them, seeing where we can increase and decrease our drawdown rates.

Wednesdays is a midweek analysis of every pair again. And then Thursdays, we’re going to do live lessons. So anything you want to know about, any parts of this particular bootcamp or anything else you wanna know about trading is basically a pick my brain session. We’ll go over the same lesson every week if we need to, if there’s things that people don’t understand. Okay, so it’s just basically more knowledge.

And then Fridays, we do an end of week profit analysis where we look at all of our trades for the week, what we’ve banked, what’s gone right, what’s gone wrong, learn from everything that we’ve done that week. All right, so that’s the plan for the live rooms moving forward. Any questions? And this is the last Q&A slide, okay? So from day one, two, three, four, or today, anything you’ve got to ask now, burning questions. Do you offer a seven-day trial for the live room. No, but I can do. I’ll get back to you on that one. Thanks a lot. Your efforts to help others is truly admirable. Thank you very much. Very nice to hear. I tried to help. The reason I put this together and I put it out there for free is because I’ve been trading a long time and two of my mentors did the same thing for me. One of my first mentors had been training for over 20 years and he took me under his wing and he taught me for free and he put together an entire course 10 times bigger than this and he mentored me for free and I got way more out of that from somebody that had been in the game for a long time than I had ever got from any video course that I’ve done.

So the reason I’m not charging for this is because I’m giving something back to the trading community. And it’s been given to me in the past. So I believe in passing it on. But also I do sell indicators, obviously. So I am being paid in a way for what I’m doing, but hey, that’s what we’re here for, to pass on knowledge. With so many currency pairs, are there good combinations of currency pairs to work on for starters?

No. The difficulty with, and I’ve been asked this question before, which is why I know the answer very easily. The difficulty with limiting your pairs is you’re limiting your opportunities. If for example, you were to pick the six majors, for example, or the US crosses. And the US dollar went sideways for a month and consolidated. You would never get an alert and you would never get an opportunity to trade. Whereas you might find the yens and the New Zealand and the pound were going crazy and giving alerts left, right and center all month, up, down, up, down, up, down, opportunities to trade every way you can make money.

But if you limited yourself to just those pairs and they never gave you an alert, you would never make money. So you’re better off monitoring all 28 major and minor Forex pairs and picking the ones that you think are the best. And as I said, you’re going to get alerts on lots of pairs. So I’ve got alerts on multiple pairs here right now. So if I was only trading Euro New Zealand, Euro US, pound odd, pound CAD and pound Swiss, I wouldn’t be getting any alerts. So look at everything.

When it alerts, look at it. If it’s a Euro CAD trade, for example, and you’re already on two euros and it alerts, you don’t look at it, do you? Because you’ve got Euro on. So just use, you look at all pairs, they all move. And the reason we use average daily range as a measurement for targets and for spacing our positions out is it doesn’t matter what pairs you trade.

If it’s a pair that doesn’t move very far, your targets are small. If it’s a pair that moves massively, your targets are massive. Okay, so we adjust our targets based on the currency pair or the instrument we’re trading. If you wanna trade the S&P 500, that’s got an ADR of about 500 pips, fine. You trade it in the same way as you do everything else. It’s just that the ADR will mean that you will get in further apart with your entries in pips, but your targets are gonna be the same, aren’t they?

So trade everything, trade whatever you want. Indices, if you wanna trade crypto like this, I’ve never tried, but crypto markets move, everything moves. If it moves and there’s buyers and sellers involved, these strategies will work because if you buy and you don’t sell, you don’t make money. So if I buy crypto, if I buy Bitcoin, I’ve got to at some point sell Bitcoin, haven’t I? Okay, but Bitcoin is a little bit different obviously because that just goes to the moon for no reason whatsoever.

I don’t understand it, so I don’t trade it. That’s why I don’t do crypto. I trade FX because I’ve been trading FX a long time and I understand it. So, but gold, things like gold, metals, indices, you can trade anything. But try to limit yourself to FX pairs. I always say you’ve got 28 FX pairs, okay? If you can’t make a living out of 28 FX pairs, something wrong.

There’s a lot of opportunities every day. So just use those as a starting point. All right, so that’s it. So one final slide. Hopefully, welcome to the 5% club. Okay, so we all know 95% of traders fail. Hopefully, we can become now one of those 5% that pass. It’s more like 99%, I would say, but hey, 1% club doesn’t sound as good as 5%, does it? So that’s the end of the course, end of the bootcamp.

Hopefully you’ve enjoyed it. If you have any questions, I’m available in the Telegram group. If you want to find out more about the indicators, obviously, and get in touch with me, you can go to themarketstructuretrader.com. There’s links to the Telegram group, to Facebook, to YouTube, everything from the website there. I put all the information up on the website. You can join the live room if you want to.

And hopefully, if you try this for a month, we can get you cracking that 5% to 10% profit level per month. But give it a go, see how you get on, and good luck.