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Trading EURUSD | Judas Swing Strategy 30/07/2024Risk management ought to be a trader's closest ally, as the previous week demonstrated the practical significance of incorporating risk management into every trader's toolkit. Last week, we executed four trades; despite having only one win and three losses, we concluded the week with a mere 1% loss on our trading account. This has heightened our excitement for the opportunities that this week may present. As is customary, at 8:25 AM EST, we commenced the day by reviewing the essential items on our Judas Swing strategy checklist, which comprises: - Setting the timezone to New York time - Confirming we're on the 5-minute timeframe - Marking the trading period from 00:00 - 08:30 - Identifying the high and low of the zone The next 5 minute candle swept liquidity resting at the low of the zone, which meant our focus would be on identifying potential buying opportunities for the trading session. To increase the likelihood of success of our trades, we wait for a break of structure (BOS) towards the buy side. Once the BOS occurs, we anticipate price to retrace to the initial Fair Value Gap (FVG) created during the formation of the leg that broke the structure. We patiently waited for price to retrace into the created Fair Value Gap (FVG), and executed our trade upon the closing of the first candle that entered the FVG, as all the conditions on our checklist for trade execution were satisfied. Please note that our stop loss is set at the low of the price leg that broke structure, and we implement a minimum stop loss of 10 pips. The minimum stop loss value was not chosen randomly; it was determined through extensive backtesting. This allows trades sufficient space to fluctuate, avoiding premature stop-outs and trades later moving in our anticipated direction. After 15 minutes, a large bearish marubozu candle formed, which could have exited us from the trade if we had set our stop loss solely based on the low of the price leg that broke structure, without including a minimal stop loss in our checklist. By using that price leg, our stop loss would have been around 6 pips, whereas a 10 pip stop loss provides the trade with sufficient breathing room. We are aware that our strategy does not guarantee a 100% win rate but rather hovers around 50% on EURUSD, indicating that some losses were inevitable. To avoid becoming emotional over the position, we used only 1% of our trading account with the goal of achieving a 2% gain. Upon checking our position later, we observed that the position was a few pips away from hitting SL. We remained calm despite the drawdown we were experiencing and were prepared for any outcome of the trade. All that was left was to wait for either our stop loss or take profit to be triggered to determine the result of our trade. A few hours later, the trade began to move in our favor. After 13 hours, our Take Profit was triggered, and our patience paid off as we hit our target on EURUSD, resulting in a 2% gain from a 1% risk on the trade.
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by CleoFinance
Types of Entry Models in SMC ConceptsIn Smart Money Concepts (SMC) trading, there are different types of entry models that traders use to enter the market. These include aggressive entry, actual entry, and order flow entry models. Here’s a simple explanation of each: 1. Aggressive Entry Model (15m): @Manipulation Entry Criteria: During Liquidity (LQ) Sweeps at Killzones + Stack Entries at Lower Time Frame (LTF, 1m) Description: Traders enter trades during significant liquidity sweeps, particularly in key market zones known as killzones (high-activity periods). They stack their entries by analyzing the 1-minute chart to find optimal entry points. This approach aims to catch early moves by entering immediately after liquidity has been swept, indicating potential reversals or strong market moves. Order Type: Market Order(post candle confirmation) Traders execute a market order as soon as their entry criteria are met on the 1-minute chart, entering the trade immediately at the current market price. Time Frame: 1 minute (LTF) 2. Actual Entry Model (15m): Post Manipulation Entry Criteria: At Valid Supply or Demand or Flip Zones Description: Traders enter trades at well-defined supply and demand zones or flip zones (areas where the market changes from supply to demand or vice versa). They wait for the price to reach these significant zones on the 15-minute chart, providing a more confirmed entry point that aligns with market structure and potential reversals. Order Type: Limit Order Traders place a limit order on the 1-minute chart at a specific price level they believe the market will reach, ensuring a better entry price. Time Frame: 1 minute (LTF) 3. Order Flow Entry Model (15m): @Distribution Entry Criteria: At Unmitigated Order Flow Description: Traders look for areas of unmitigated order flow on the 15-minute chart. Unmitigated order flow refers to price levels where significant orders have not yet been fully absorbed by the market, indicating potential areas of strong buying or selling pressure. Traders place their entries at these levels, often waiting for a candle confirmation to ensure the validity of the order flow analysis. Order Type: Limit Order (post candle confirmation) Traders wait for a candle confirmation on the 1-minute chart before placing a limit order. They analyze the order flow and wait for a confirming candle that aligns with their analysis before setting a limit order to enter the trade. Time Frame: 1 minute (LTF)
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by arjTradingofficial