Price Action: How To Make a Trading Plan (Part 8)

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Price Action: How To Make a Trading Plan (Part 8)
Price Action: How To Make a Trading Plan (Part 8)

Tiếng Việt

This is another important post but I’ll leave it up to part 8 in this series. And most likely, with the title “trading plan”, this article will not have many views.

Commitment: clear images, understand after reading. You can make a trading plan yourself every day.

Ok! Let’s go to this article, a long one with lots of pictures.

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Use Tradingview to make a watchlist

Each person has 1 platform or software to view trading charts. Tradingview is my choice. It’s friendly and easy to use with lots of tools to draw.

My approach will be to browse all currency pairs + USOil + Gold… for analysis.

Repeat: It’s analysis and planning, not predicting. Because if you try to predict whether the market will go up or down, you will keep that mindset in your head stubbornly. When the price movement is opposite to your prediction, you will likely lose all your capital.

Analysis time: 15 minutes for all (average 30s for 1 chart).

How to make a trading plan

I go step by step. It’s actually very fast if you’re used to it.

Style reminder: Use the daily chart to identify trends. Focus on the H4 candles to find breakout points (true breakout or false breakout) to enter trades.

XAU/USD – my top favorite pair

The market is moving sideways with a wide margin. Reason: The current high is equal to the previous one – (A) = (B). The current low is equal to the previous one too – (1) = (2).

Analysis of the XAU/USD
Analysis of the XAU/USD

But, Gold is stuck in a downtrend line of the current wave. Prioritize SELL.

(1) Plan 1: If the price dropped sharply and the candle closed definitively below the 172x zone => SELL to chase.

Gold trading plan 1
Gold trading plan 1

(2) Plan 2: Sell at a downtrend with the H4 chart. Do you remember the theory for us to enter a SELL order? It’s the bearish confirmation candle.

Gold trading plan 2
Gold trading plan 2

Reminder: The market does not follow the shape of a Christmas tree or the Eiffel Tower. Before the fall, the price always generates enough signals for you to enter a SELL order. See details here: Confirmation candle in Downtrend: SELL order (Chapter 6)

What about BUY? No, it’s not in the plan with this chart.

DXY – USD Index

You should look at the USD once a day and judge it. Since this is a strong currency, it affects most of the remaining currency pairs.

DXY is in an uptrend and is showing signs of a downward correction. Zones (A), (B) and (C) are how DXY creates a trough to end previous corrections. Likely, the next one will be the same.

Plan: Wait for the price to stop falling and create candlestick patterns similar to (A), (B) and (C) zones. Wait to BUY.

DXY – USD Index
DXY – USD Index

USD/CAD – a trading opportunity

The price falls sharply and breaks out of the downtrend and the key level zone. Enter a SELL order with the amount half of the plan. If the price retests, enter the remaining 1/2.

USD/CAD - a trading opportunity
USD/CAD – a trading opportunity

+ Stop Loss: 1.2660

+ Take Profit: 1.2300

=> Rate 2.7R

GBP/USD – Wait to SELL

GU is in a bearish phase after breaking down the important Key Level. And now, the price is retesting.

Put it on the watchlist. If the bearish confirmation candle appears on the 4h Chart, immediately enter a SELL order.

GBP/USD – Wait to sell
GBP/USD – Wait to sell

EUR/USD – no trading opportunities

For pairs that don’t have a trading opportunity, ignore it. Let’s review it the next day. If the price enters the confluence of the Key level and the downtrend, then we will consider it later.

EUR/USD - no trading opportunities
EUR/USD – no trading opportunities

NZD/USD – no trading opportunities

Wait more.

NZD/USD - no trading opportunities
NZD/USD – no trading opportunities

USD/CHF – Waiting for confirmation

There’s nothing with this chart either. It takes time to see when the price enters the Key Level zone.

USD/CHF - Waiting for confirmation
USD/CHF – Waiting for confirmation

AUD/USD – Wait for a reaction to SELL

AUD/USD - Wait for a reaction to SELL
AUD/USD – Wait for a reaction to SELL

USD/JPY – Waiting for the reaction at the Key Level

USD/JPY – Waiting for the reaction at the Key Level
USD/JPY – Waiting for the reaction at the Key Level

USOil – a trading opportunity

Habit of Oil: Every time it crosses the top, the price usually accumulates to go sideways at the top zone or breaks out and then retests. You do not need to rush to enter the order because it could be a Fakey pattern.

Put in the watchlist for review.

USOil - a trading opportunity
USOil – a trading opportunity

EUR/JPY

After a decrease, the price is now entering the sideways period. The price has not yet entered the zones we are interested in. Skip.

EUR/JPY
EUR/JPY

EUR/AUD – a trading opportunity

The price is entering the confluence of Key Level and the uptrend, forming a balanced Doji pattern. Wait for confirmation candlestick patterns for each scenario.

If it drops sharply, the uptrend will be broken. Enter a SELL order because it is likely to be a sharp and deep drop. Prioritize this plan.

EUR/AUD – a trading opportunity
EUR/AUD – a trading opportunity

Summary

What do you see after 12 charts? Very fast, right? You don’t need to focus too much on currency pairs that don’t have a chance.

Remember: We only trade when the probability of winning is so high that both you and I are willing to trade with our own money. Therefore, if the opportunity is not delicious enough, let it go.

Every morning, you just need to surf all the currency pairs (daily chart). Then make a watchlist of about 3 to 5 pairs to track the day’s happenings with the H4 chart. So, everything is in your plan. You know what you’re going to do, how much you’ll lose if you’re wrong, and how much you’ll win if you’re right.

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The story of a predator

For those who do not know, Hitman is the top sniper in the Hollywood world.

Hitman’s job is a one-shot head hunter. One of the best images that I have always wanted to learn to apply in trading. And here’s how the killer works.

After closing the order (prey), Hitman spends consecutive days observing his prey. Patiently record the behavior, personality, habits, and even the bodyguards next to the prey. After that, he makes a detailed plan to “hunt” – location, time, method, etc, and a way to escape. Everything is scripted in great detail.

The story of a predator
The story of a predator

The right time has come. He begins to “take action”. At that location, he calmly waits for his prey to come into view, feeling the direction of the wind. Gently open the safety pin and take a deep breath, and put his hand on the trigger. Dang! 1 single bullet, get up and leave. No traces, no emotions and no mistakes allowed.

That’s it! Those who are trained for the only job of headhunting also need to have a plan, a script to act. When the probability of taking down the prey is not high, the assassin will never “get to work”. He understands that as long as he is impatient or makes a single mistake from a predator he will turn into prey immediately.

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