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Two important things to consider before trading:
1- Trading plan 2- Risk management plan.
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A trading plan should include:
1- An obvious strategy in order to make your analysis.
“We use Elliot wave theory, chart patterns, Support/Resistance levels, trend lines, Divergence, Fibonacci, candlestick Patterns.
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2- Set of rules to follow in order to look for confirmation/setups.
“We wait for a corrective structure on a lower timeframe such as a 1hour “Flag/Wedge/Triangle” and we enter on a breakout.
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3- Rules for Entry/Stops/Targets.
We usually enter a trade after a breakout of a lower timeframe corrective structure, and targets are usually calculated based on Fibonacci Extension levels or potential support/resistance levels, stoploss is usually a 1.5 or double the distance of the target to achieve 1:1.5 or 1:2 risk to reward ratio.
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A risk management plan should include:
1- Preferred risk per trade.
“We prefer to risk 1% per trade and aim for 1.5% or 2% return.
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2- Preferred risk to reward ratio.
“We usually use 1:1.5% or 1:2% risk to reward ratio, so if our target is 100 pips then the stop loss would be 75 or 50 pips.
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3- Maximum preferred drawdown.
We risk 1% per trade and we open no more than 2 trades at a time, so the drawdown is usually lower than 2%, we always aim to keep the maximum drawdown as low as possible “Lower than 5%”
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We hope that was helpful.
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Join our membership Today, link in Bio/Description here @strade_ninjafx .
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Membership + Course:
1- +25 Technical analysis/Setups each week.
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2- Trading course “+350 pages/9 Chapters from basic up to the advance level” 100% Made by our analysts.
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. *Please note that the above perspective is our view on the market, We do not give signals and take no responsibility for your trades. .
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