The strategy focuses on developing a trend-following system utilizing price action techniques to enhance profitability. The initial step involves identifying the prevailing market trend through chart analysis, which includes examining higher time frames, understanding price movements such as higher highs for uptrends and lower lows for downtrends, and using indicators like moving averages for trend confirmation.
Once the trend is identified, the strategy suggests entering trades during market pullbacks for optimal pricing. This involves monitoring candlestick patterns and ensuring favorable risk-reward scenarios. Traders should place buy orders in uptrends during price support and sell orders in downtrends at resistance points.
Effective trade management is the final phase, focusing on setting stop-losses and profit targets, trailing stop-loss as the trend progresses, and maintaining a disciplined risk management approach. Partial closes and continuous strategy evaluations are recommended to sustain market adaptability and learning opportunities.
The strategies
⛳️ Strategy 1: Identify the trend
- Analyse the chart to determine the current market trend
- Use higher time frames (e.g., daily or weekly charts) to establish the main trend direction
- Look for higher highs and higher lows as a sign of an uptrend
- Look for lower highs and lower lows as a sign of a downtrend
- Employ trendlines to visually confirm the trend direction
- Monitor news and fundamental analysis that might impact the trend
- Track the market sentiment to understand traders' perceptions
- Use moving averages to support trend identification
- Consider using an indicator like the ADX to measure trend strength
- Regularly update your trend analysis to adapt to market changes
⛳️ Strategy 2: Enter the trade
- Wait for a pullback or retracement to enter at a better price
- Use candlestick patterns to confirm entry points
- Place buy/long orders when market is in an uptrend and price pulls back to support
- Place sell/short orders when market is in a downtrend and price retraces to resistance
- Ensure to have a favourable risk-reward ratio before entering a trade
- Utilise limit orders to ensure precise entry prices
- Monitor volume levels to ensure strong participation in the trend
- Consider waiting for price action to break a key level before entering
- Use pending orders if not available during the entry opportunity
- Define and note the specific conditions that validate your entry criteria
⛳️ Strategy 3: Manage the trade
- Set stop-loss orders to protect against unexpected market moves
- Determine profit targets based on the trend and risk-reward calculations
- Trail stop-loss as a way to lock in profits while allowing room for the trend to continue
- Regularly review and refine your stop-loss based on market volatility
- Employ risk management rules and only risk a small portion of the trading capital per trade
- Utilise partial closes to secure profits while leaving some positions open
- Analyse exit points using support and resistance levels
- Monitor the market for fundamental or sentiment shifts that could force a trend reversal
- Document the performance of each trade for future learning
- Re-evaluate the trade strategy regularly and make necessary adjustments based on new data
Bringing accountability to your strategy
It's one thing to have a plan, it's another to stick to it. We hope that the examples above will help you get started with your own strategy, but we also know that it's easy to get lost in the day-to-day effort.
That's why we built Tability: to help you track your progress, keep your team aligned, and make sure you're always moving in the right direction.
Give it a try and see how it can help you bring accountability to your strategy.
