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H4 Flow Trade Plan
  jtrade
 
v1.3
 
24 March 2014
The purpose of this evolving trading plan is to clarify & define each step of the trading process with the goal of creating a relatively simple, consistently repeatable, profitable method with minimal - & perhaps eventually almost zero
 –
 discretion. A method I can execute with a high degree of accuracy and meet my goal of trading fully for a living whilst still having a life beyond trading. V1.0 is first draft & will not include any charts, although chart examples will be added or at least form part of the trade journal included in this plan. More detail to be added as a work in progress.
Fundamental premise
 of this method is to
“fish” for entries at Weekly extremes & then build a stack
of long-term positions from there. This will frequently require repeated trial and error entries until an established position can be built. This is not a high win % method : 50% winners would be exceptional.
Basic blueprint
 
is 60minuteman’s current variation to enter on break
 of H4 candles which form at the current Weekly extreme combined with a directional bias allowing trades only in the direction of the prior Daily Close being above / below the SMA(50).
v1.2 update
 : to clarify, if directional bias is
Long only
, then a
Weekly Low
 must be reached to trigger a possible trade setup. The entry is then made on a break
above
 that bar.
v1.3 Monday filter
 
: after the weekend “Weekly reset”, there are likely many more setups than
usual on a Monday morning, possibly increasing whipsaws. To address this I will draw the Friday HiLo across Monday before the week
s trading begins. I am using the Alchemy Weekly HiLo indicator with alerts for the rest of the week. No idea if this Monday filter is a good idea, but I am using it right now. Looks like this :
 
 
Experimental hybrid variation
 may be added initially to allow lower timeframe entries during the periods that I am usually day trading, typically the European morning from 0800 (Frankfurt Open). Hybrid entry may be as simple as dropping down to the M15 chart, or using a Renko chart (work in progress). This is intended to take advantage of my being very familiar trading faster charts with small stops : whether it adds to this method in a worthwhile way or not remains to be seen
 –
 it may  just add a load of small losers.
I will set up charts during the first week’s trading to see if this is
manageable. (NB. A major goal is to greatly REDUCE my time in front of the screens !)
Instrument universe
 :
EURAUD EURJPY GBPJPY GBPUSD XAUUSD XTIUSD
 (will add
YM
 futures as index pair at some point, but this will require more $$$ in TS account to handle overnight margin requirements on large stack). (During start-up phase, may restrict number of
pairs traded at any one time, eg. only one € or £ FX
symbol at a time. Intention is to expand the number of open instruments with the potential benefits of both smoothing & improving equity curve.)
Initial stop placement
 : beyond signal bar extreme (spread + 2)
Stop trail
 : not yet known; what
is
known is that I have a fear-based tendency to tighten stops too soon.
 
Entry units and management
 : 2u entry, of which 1u is a shorter term trade, usually exited EOD : the purpose of this is to lock in shorter-tern gains to smooth the equity curve. Longer term unit is to be stacked if it survives.
Scale-ins
 : as per initial entry method.
Position size
 : will start at TS minimum $1/pip & scale up aggressively as soon as I feel confident of my consistent correct execution and have a better idea of likely drawdown size & duration. Longer-term I would like to reach a point where my individual trade risk is <1%.
Weekly & Daily pre-trade preparation
 : before start of trading session, mark & review significant higher tf (D, W M, Y) SR
 –
 probably have a TradeStation indicator to do this, but needs eyeballing for obvious Supply & Demand areas as well. However, I want to keep the number of lines drawn to a minimum, so maybe only current W M & Y H/L. Note which instruments are in congestion : stay clear if appropriate (obviously this is a discretionary decision made within the understanding that out of
consolidation trends begin…).
 
(Ahem… ‘hope Rred reads this because I would love to hear more about his pre
-session trade preparation, as I know he considers it essential
“homework”
).
Trade documentation / journaling inc screen prints
 : my intention is to keep a simple journal to track & grade every trade. The aim is zero execution error, so I want to track how close I maintain my performance to that
 –
 a variation report of sorts.
Additionally, I will use both TradeStation’s trade reporting / analysis tools and possibly also my own
spreadsheet. Sometimes the process of manually recording all trades carries very positive additional
benefits, especially for tracking components specific to one’s trading method.
 
Entry automation
 : with many thanks to
td forexcl 
, I intend to test his EA and look into TS automation in due course, both for actual automated entry execution and for trade alerts only. The only reason I have not set the EA up already is that I have very low experience of MT4 and have not allocated the time to do so.
Group participation & feedback
: my intention is to share both this document & ongoing, detailed trade results with other active, participating members (live or demo) of the
H4 Powah!
 Skype group, allowing us to both improve our individual trading and evolve the method according to the differing variations that we trade.
Please do not share outside this group !
Lastly,
many thanks to 60
 for creating and sharing the group & method
.

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