Trading tips

Hello all,

I would like to share some of the tricks that I learned trading e-mini S&P-500 futures and forex spot currencies.
You have probably heard many times the mantra of real estate business: location, location, location.
Similarly, in trading, location, location, location, is also the key. Specifically, location of entry price and exit price.
How to determine the correct location for entry and exit?
In my case, I use combinations of marketprofile numbers (PoC, HVN, LVN, Value Area, vWAP), Fibonacci numbers (50% retracements, 127% and 161.8% extensions), and momentum divergence/convergence (MACD 21,55,8).

Just as in the game of golf and tennis, the trade can be broken down into 3 steps: SETUP, TRIGGER, FOLLOWTHRU


SETUP constitute:
1. pattern recognition of price action at the S/R levels (marketprofile and fibonacci numbers)
2. momentum behaviors (exhaustion = divergence, continuation = convergence)
3. pace of tape (~ 10,000 in 1 min ES chart), room for loss and room for profit


TRIGGER constitute:
1. breaker pattern (taking out of swing high/low)
2. wave pattern (buying pullback on an Initiating Buying orderflow, selling pullback on an Initiating Selling orderflow)
3. 2 step setup (scaling in at Responsive Buying or Responsive Selling orderflow)


FOLLOWTHRU constitute:
1. scale out inventories at 3 ticks, 4 ticks, so on until they are depleted.
2. moving stops to break even at the potential tops/bottoms, scale in more inventories

Remember that confidence in following the trade plan would yield profitable trades. Profitable trades would increase confidence. Increase in confidence would result in discipline. And discipline would increase confidence.

CONFIDENCE --> PROFIT --> CONFIDENCE --> DISCIPLINE --> CONFIDENCE

Good luck trading!