winning trading strategy

7/26/2019 Winning Trading Strategy

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WINNING TRADINGSTRATEGY

THE ONE TRADING STRATEGY

YOU WISH YOU KNEW BEFORE

TRADING


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Introduction

I want to thank you and congratulate you for downloading the

book, Winning Trading Strategy.

Trading is a constant battle where you have to learn the best

tools, strategies and technicues to have an edge and make

money. You too will transform your trading when you learn the

strategy and the information I am sharing with you in this

book.

To be a consistently profitable trader, you need have to have a

clearly defined strategy with rules on how to act in the market.

Find technicues in this ebook that fits you and become the best

trader you can be. Here is a preview of what you will learn:

The importance of a trading plan.

Why you should track your trades.

The importance of knowing yourself and your mind.

The one trading strategy.

A risk management strategy.

And much more!

Thanks again for downloading this book, I really hope you

enjoy it!

Best Trading,

Johan Nordstrom

http://www.TradingWalk.com


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Copyright 2015 by Johan Nordstrom. All rights reserved.

This document is geared towards providing exact and reliable

information in regards to the topic and issue covered. This

information is for your personal use only. You cannot

distribute, copy, reproduce, or otherwise sell this product or

information in any form whatsoever, including but not limited

to: electronic, or mechanical, including photocopying,

recording, or by any informational storage or retrieval system

without expressed written, dated and signed permission from

the publisher. All copyrights are reserved.

The information herein is offered for informational purposes

solely, and is universal as so. The presentation of the

information is without contract or any type of guarantee

assurance, and should not be considered specific investment

advice. Examples are provided for illustrative purposes only.Past performance is not necessarily indicative of future results.

Trading is associated with risk and capital may decrease in

value. If advice is necessary, legal or professional, a practiced

individual in the profession should be ordered.


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Trading Plan

One of the biggest mistakes most new traders make, is to

trade on emotions, tips and whatever catch their attention, it

can work for some time, but not in the long run. To be a

consistently profitable trader, you need to have some rules on

how to act in the market. Have you ever experienced

something like the example in the chart below?

If you have a trading plan, you will always know how to act in

the market and where you are going to place your trades and

take your wins and losses. Your trading plan primarily consists

of a set of rules you should follow to profit in trading. You will

take out much of the anxiety being in a large losing position


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when you, for example, have stated in your trading plan; you

only risk one percent per trade.

Having a trading plan makes trading easy and enjoyable, it

takes the fear, anxiety and complexity out of it. If you are in

the market for the thrill, then you are not in it for the money,

so if you are in it for the money; have a trading plan.

It is difficult to follow a trading plan since it is in our nature to

bend and break rules. You need to have the discipline in order

to act consistently according to your rules. Done right and you

will profit for the rest of your life and become the best trader

you can be.

Read more in my post Trading Rule: Plan Your Trade And

Trade Your Plan.Or go here: tradingwalk.com/trading-rule-plan-trade-trade-

plan/


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Track Your Trades

I know many traders that cannot figure out why they do not

have the returns they know is possible for them to have. I

have tried to explain to them that they need to track what

they are doing to identify bad habits. Without a trading

journal, it is hard to remember exactly what made you act in a

certain way at the time.

The most important answer to why you should track your

trades is because it enables you to learn from your mistakes

and thereby advance as a trader so you can make more

money. You may think you follow your trading plan when you

are not, and if you do not have a system of tracking your


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trades there is no feedback for you to fall back on when you

make mistakes and do not follow your plan.

Tracking your trading does not have to be complicated. Use a

simple Excel document or pen and paper where you write

down the security, date, price, your stop price, setup and your

thoughts. When you close your position you write down the

date, price, if you followed your rules, gain/loss and your

thoughts. Simple as that!

Tracking will tremendously help you spot your mistakes when

reviewing, I have had times when I closed a position, realized

it was not according to my plan to close when writing my

tracking, reopened the position, and made a profit instead of a

loss.

I recommend you track your trade after each action you take

or before you leave the computer for the day. Tracking the

next day often make you forget much valuable information.


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Monitor Your Mind

Have you ever experienced a loss becoming a larger and larger

loss but you feel that it is going to turn since there are so

many reasons that support your trade so it has to, but it does

not and you have to sell with a gigantic loss?

First, how much risk you take in every trade, should be stated

in the risk/money management section in your trading plan.

Second, your mind has a tendency to play tricks on you.

Example; when you are in a long trade the mind gets a long

bias and, therefore, focuses mainly on positive signals and

rejects negative signals. You should, therefore, take particular

notice on how you think and what you focus on, a good way to

help you from this "mind problem" is to plan your trades,

(again Rule #1) so you will know how to act before you enter a

trade.

One of the reasons you have a before and after thoughts

section in your tracking is so you can analyze how your mind

play tricks on you.

To get your mind under control, I recommend you do some

mental exercise before you trade, it can be as simple as

repeated the five fundamental Truths of trading and from

Trading in The Zone by Mark Douglas.


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See more books I recommend in my blog post on the Top 5

Trading Books Every Trader Should Have Read.

Or click this link: tradingwalk.com/top-5-trading-books-every-

trader-should-have-read/


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The Winning Trading Strategy

In this chapter, I will reveal the winning trading strategy. I

look for this setup every day because it is so powerful. You can

use it trading futures, forex and stocks. It is so powerful it

works on any security in any time frame.

The Strategy

This is mainly a reversal strategy of the micro trend in the

direction of the macro trend. An example can be a micro

downtrend in 1h chart but the daily chart, macro trend, is in

an uptrend. The strategy can be traded both long and short

and as a day trading strategy or swing trading strategy on

your favorite time frame, we mainly trade this on daily, 4h and

1h time frame. It is an ABC setup, but we will get to that.

To keep it simple, we use two charts to define the micro and

macro trend. We define trend by looking at higher highs and

higher lows and the candlesticks body range, if red candles are

bigger than the green the trend/momentum is down. You can

certainly use your favorite moving average to define trend. We

keep it simple, no need indicators. Candlesticks are our price

action and what we will use to give us the entry and exit price.

Setup

We can see that we have a downtrend, 1) the price action start

in the upper left corner and is now in lower right, lower lows


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and lower highs 2) the red candle bodies are bigger than the

green ones (the daily is also in a downtrend). Therefore, we

look at a short trades. Now to the setup, to have a short setup

we want:

A break to new lows.

A rally against the trend (A move).

A move to the downside (B move).

A Break of the rally high (A point) creating a new high (C

move).

We try to enter as high as possible on the C move before

it reverses back down with anticipation of breaking new

lows.

Setup Upgrage!

Round numbers often act as support and resistance, therefore,

place orders at these levels or just low/above round number

levels.

Setup Upgrade!

Symmetry is importaint; therefore, measure the A move and

anticipate that the C move might be similar. With symmetry

you increase the probability of a winning trade.

Illustration

Below is an illustration on how the setup should be traded, I

have illustrated it in a simple drawing and we will also use a


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1h chart (date 2015-12-15) of the currency pair GBPJPY to

illustrate the setup in a candlestick chart.


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Entry

To find the zone where the C move might end. We draw a Fib

extension between the low and high of the A move to get ourshort zone between the 1.279 and 1.618 extension. When we

have the area, we look left for a green small candle body and

place the entry at the open of that candle, close to 184.100.

Target

Exit the position at 182.500 closest round number to the open

of the red candle at the low point of the A move, giving us a

positive risk reward (reward greater than our risk).

Stop Loss

Place a stop loss order just above the short areas closest

round number (above Fib 1.618 extension [184.575], closest

round number [184.600]). We place stop loss at 184.620.

The Result

Like many other times, we traded this strategy and produced awinning trade. Be observant, these setups form over and over

again making it possible for you to profit day in day out. Did

you look left on the chart? Well then you probably found this

setup too:


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This truly is a great strategy and his is unlike anything I have

ever seen. Look how the market turned and absolutely crashed

to our profit target in the chart above. I use this strategy to

make huge amounts of $$$ and so can you. I you have anyquestions, email me at [email protected]

Click here to learn more winning strategies.

Or go here: tradingwalk.com/learn


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Risk Management Strategy

What is risk management? It is the process where you decide

the risk (potential loss) in a trade and then take the

appropriate action given your risk tolerance.

How to decide how many contracts you should buy or sell

when you have a setup? It depends on how much you are

willing to risk.

How much should you risk? We recommend that you never

risk more than two percent on trades, one percent is optimal,

but only you can decide how much you should risk. Higher risk

gives you a higher reward when you have winning trades but

also larger drawdowns when you have losing trades. Keep your

risk low, in general, just think what a 50 % drawdown would

do to your account. You may think that a 50 % win is going to

take you back to break even, no, take a look at the example

below.

Example

Your initial account capital is $100.000. You invest everything

and suffer a 50 % loss, account decrease to $50.000

(=$100.000*0,5). You invest everything again and get a 50 %

gain, account capital increase to $75.000 (=$50.000*1,5), but

that is $25.000 short of what you initially had. You need a 100

% gain after a 50 % loss to come back to break even. Have a


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risk management strategy so you do not end up in a deep

drawdown impossible to recover from.

The Risk Management Strategy

I hope you understood the need to have a risk management

strategy. It is time to calculate how many contracts you should

trade with depending on how much of your account in percent

you are willing to risk per trade, say you only want to risk one

percent. You can then calculate your risk per trade in $. Withyour $1.000.000 account:

One percent (0,01) * $1.000.000 = $10.000 risk per trade

Your risk for one trade is $10.000. Now you calculate the risk

for each contract depending on where your entry and stop-loss

is. For this example, you want to buy and placed a limit order

at $40 and your stop-loss at $37. The risk per contract is then:

$40 $37 = $3 risk per contract

Now that you have risk per trade and risk per contract, you

can precisely calculate the number of contracts you can buy

for the security, taking your risk per trade divided by your risk

per contract, you will get the number of contracts you should

buy.

$10.000 / $3 = 3.333 contracts


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You can now enter your trade with 3.333 contracts and if your

stop loss is hit you will know that you only lost one percent of

your account and you will live to trade another day!

This is a simple risk management strategy, it is an essential

strategy you understand and apply to your trading if you want

to achieve trading success. Avoid blowing up your account, like

so many traders do every day.

Click here to read my blog post Do Not Dig Yourself Into A

Hole.

Or click this link: tradingwalk.com/trading-rules-do-not-dig-

yourself-into-a-hole/


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Take Action

Y!u n""d to #"t the wh""l# !f $h%ng" to become the best

trader you can be in motion %t th" earliest !&&!rtunit'.

Identify %n %$ti!n which '!u can t%k"to get thing#g!ing %nd

t%k"th%t action %##!!n as &!##ibl"so you get started.

Action is defined as "the act or process of doing something,

typically to achieve an aim. There is absolutely nothing more

important thantaking action, because without actually getting

started, you will literally make zero progress. It does not

matter how much planning you have done, if you do not get

started you will still be sitting at square one wondering why

everyone else is making progress and you still are not.

"The secret to getting ahead is getting started"

Read the statement above three times aloud. Now think of a

time where you really wanted to do something, but you never

got it done because you never got started. It is not a pleasant

experience to reminisce about, is it? You can make up all sorts

of excuses, alibis, etc. However, the only reason why you didnot accomplish what you desired to do was because you never

even began what you wanted to do!

Perhaps you put it off until tomorrow, and tomorrow never

came. Perhaps you were just really busy and neither had the

time nor the energy to work on that side project, or finish that

book, or learn how to trade. The thing is, we as humans are


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exceptional at making excuses, especially since it is an easy

way to make ourselves feel better about not taking action.

There are plenty of excellent excuses out there for not doing

what you said you were going to do - but in the end they are

all just excuses. Are excuses going to execute that trade for

you? Are excuses going to make you a better trader? Make

you more money? I highly doubt that an excuse is going to

magically manifest itself in a physical form and take care of

what you did not.

Procrastination might be one tough adversary to beat, but we

have a simple formula to winning virtually every one of the

battles you will fight:

Motivation + Getting Started = Progress

For the sake of simplicity, let us assume that you were so

driven by the progress you made, that you continued to put

more and more effort (compounding effort) into whatever it is

you were doing. Assume that this would give us another

equation:

Progress + Time = Success

There is one truth about success that I have heard echoed

over and over again by almost every successful person I have

met: they got where they are now by getting started.


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You have motivation, and that is great, so now it is time you

get started today! I am sure you had enough time to read this

ebook, so why not set aside 15 minutes to begin working on

becoming a better trader?


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Conclusion

Thank you again for downloading this book!

The next step is to take action, practice and trade this strategy

so you learn it by heart. I belive in you!

One more thing: if you liked this book, would you be kind

enough to leave a review and feedback on this, email me at

[email protected]

Thank you and to your success!

Johan Nordstrom

http://www.TradingWalk.com


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