The K.I.S.S. Method from A-Z – Part 2

Filed under: Learn Forex Trading |

Making a Schedule

Once you have cleaned your charts up and drawn in your levels of support and resistance, you will need to set yourself a schedule/routine for trading. This will ultimately depend on how much spare time you have. If you are lucky enough to be home all day, then you could check your charts every hour and set yourself an hourly bleeper. However, unless you are extremely motivated to trade, this might prove to be a little too much too soon. A more realistic aim is to check the charts every four hours, and use the four-hour charts to trade off. However, if your time is at a premium, then the minimum you should aim for is to check the daily charts at least once every day, preferably at the close of the daily candles at 11pm UK time.

 

Identifying Price Action Confirmation Signals

So what exactly are we looking out for every time we look at our charts? We are looking for price action confirmation signals near our support/resistance lines. The price action signals I use are pin bars, inside bar, and engulfing patterns (although there are others). I also look for breakouts of the areas of support/resistance. If any of these events happen at the support/resistance zone, then you can look to take a trade, or at lest put an order in for a trade.

 

The Trade

When I set my trades, I always calculate a minimum risk-reward level of 1:2, and I never risk more than 1% of my trading capital on any one trade. These are my rules, and they are levels that I am comfortable with. I would not recommended ever trading more tan 2% of your bank on any one trade. I always set a stop loss and I calculate my lots to fit my rules.

 

Well, that’s about it – in a nutshell. This is the basic framework that I follow when implementing my trading methodology. It is a method that takes a little effort, but it is a method that does seem to have a significant edge in the long term. The extent of this edge – well… I could only really tell you that in 10 or 15 years time! And if we’re all still trading after that time, we’re either very successful… or very stubborn indeed!!!

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