Trading plan:
The Strategy:
Step one:
Identify market structure and direction on the Daily and H4. Look to take
trades in line with this trend for the highest probability setups.
Use the 4h and 1h to identify more refined structure and draw on previous
mitigations and structure to remind yourself of where price is.
Step Two:
Within the current trend leg , identify any areas of imbalanced supply or
demand which price could pull back into. Make sure to identify liquidity as
well to make sure you aren’t entering before previous traders are taken out.
Criteria for a valid POI:
● Area of supply / demand within the current trend leg
● In a premium or discount (above/below the 50% retracement level)
● Created imbalance
● Liquidity above the demand/below the supply
Side note:
If price is moving with a lot of momentum , it sometimes won’t pull back into
your higher time frame POI. Take into consideration momentum and use
lower time frames for more refined structure and liquidity .
Step Three:
Once price has tapped into your POI , go down to the M5 to identify the
current lower time frame structure .
Wait for the current higher low on the M5 to be closed below (a wick below
doesn’t count) / current lower high to be closed above .
This is your change of character.
Once you see the change of character , identify any areas of imbalanced
supply/demand on the M5.
Set a limit on these areas to get your entry.
Remember not to overthink it - try to make this process as mechanical as
possible.
Step Four:
Position your sl a few pips above the high/low before the change of
character.
If you are new to the strategy , mechanically target a 1:3 Risk:Reward.
If you are more experienced with the strategy and have already found
profitability with it , target previous areas of liquidity that price may reverse
from.
However , the trade must be at least a 1:3 .
The Risk Management Plan:
This is the most simple and mechanical part of the entire strategy and is
entirely within your control. Here is how I manage risk:
Live accounts with real money:
● 1% risk of starting balance
● I won’t increase risk until I’ve made 10% profit on the account eg if
the account goes from £10k to £10100 , only then will i increase risk
from £100 to £110
● Risk stays the same no matter how i feel about trades
● No breakeven and no partials
● 1:3 mechanical TP rule for anyone new to the system
Prop firm challenge accounts:
● 1% risk on challenge phases whether in drawdown or in profit
● Always do mechanical 1:3 target on first trade to get a buffer on the
account
● Make sure the first trade is a high quality trade - don’t rush into it.
● Thats it! Simple and easy to follow.
Prop firm live accounts (after phases 1 and 2):
● Secure minimum withdrawal amount first eg $50. This allows you to
get your challenge fee refunded so the account is now risk free
● Payout rule: as soon as your account is in profit after all positions are
closed , stop trading and wait for the payout - even if its just 1%.
Single account:
● 0.5% risk per trade
Two accounts of the same size:
● 0.5% risk on each account but traded separately . Once one account
is in profit (after all trades are closed) , move onto the second
account and wait for the payout on the first.
● If an account initially goes into drawdown , trade this account until it
makes profit or is blown (only after this move to the second one).
Three accounts of the same size:
● Combine 2 accounts into 1 eg combine 2 100ks into 1 200k account
● Trade this account and the remaining account separately with 0.5%
risk on each
Four accounts of the same size:
● Combine 2 accounts into 1 and do the same with the other 2 so you
have only 2 accounts in total (eg 2 200ks)
● Trade each separately with 0.5% risk
When should you scale up?
● Scaling up rule : only buy another challenge once you make at least 3
times the challenge fee (after the split)
● So if a 100k costs $500 and i have an 80% split , I’ll buy another 100k
challenge when i have made more than $1875 (80% split of this is
$1500 which is 3 times the challenge fee)
● Doing this allows you to keep your prop firm risk:reward above 1:3
(risk=challenge fees , reward=payouts)
Key Processes:
Trade Journalling:
● Journal all trades taken using either the notion journal template or a
paid software (edgewonk or tradezella)
● At the end of the day , go back over te price action and journal any
setups which were valid that you didn't take
● Write the technical overview of the trades and the psychology behind
it (any emotions that came into play)
● If it was a missed trade , record why you missed it under the
psychology section
Weekly/month/quarterly ASR:
● There is a template for this in the notion journal
● As well as filling in this template to review your performance , I also
backtest the month/week/quarter before filling in the ASR template
● Rewind price and play it bar by bar to study the price action in
hindsight
● Is there anything you missed ; was your bias correct ; why was this
the case?
● Record any of these missed trades while doing the ASR (theres a
section for missed trades in the template to do this)