Winning mindset for trading

Winning mindset

• This presentation was going to cover mindset but....

• So we are going to run through some techniques I use instead....

The bands

The bands

• The bands can be used in a variety of ways;• Trend.• Counter-trend.• Breakouts.

The bands

The bands

• This utilises 2 moving averages but in a slightly different way to normal.

• We are going to use a 5 period exponential moving average twice!

• Instead of the moving average set to the closing price....

• We will place one 5ema set against the low price and one 5ema set against the high price.

• It will then make your chart look like this...

The bands

The bands

• So we are looking for certain instances to buy when price hits the lower band when the overall trend is up

• We are looking for certain instances to sell when price hits the upper band when the overall trend is down.

The bands

The bands

• Rules for buying (long plays).• Price making higher highs.• Price needs to be above the 50sma.• After a fresh cross of the 8 and 20sma’s.• Look for the first time price pulls back to test the lower

band.• Buy when the lower band is hit.• Place stop based on either of the following; prior low,

below 20sma or based on the ATR multiple.• Profit zone is the previous high or above....

The bands

• You can wait for a reversal (conservative approach) and then buy.

• In this instance you would place stop loss order below the most recent low.

The bands

The bands

• Rules for selling (short plays).• Price making lower lows.• Price needs to be below the 50sma.• After a fresh cross of the 8 and 20sma’s.• Look for the first time price pulls back to test the upper

band.• Sell when the upper band is hit.• Place stop based on either of the following; prior high,

above 20sma or based on the ATR multiple.• Profit zone is the previous low or below....

The bands

• Rules for selling (short plays).• Price making lower lows.• Price needs to be below the 50sma.• After a fresh cross of the 8 and 20sma’s.• Look for the first time price pulls back to test the upper

band.• Sell when the upper band is hit.• Place stop based on either of the following; prior high,

above 20sma or based on the ATR multiple.• Profit zone is the previous low or below....

The bands

The bands

• Variations of rules.• Price not making higher highs etc.• Profit target static at 1:2 risk reward.• Wider stops.• Subsequent tests?• Moving stop loss to break even once price has

moved so far.• Using different timeframes.

Overlaying the MACD

Overlaying MACD

• We’ve run through the basic principles of the bands.• Where they become more powerful is where lined

up with MACD.• Use the higher timeframe MACD in line with the

bands.• So if taking a 15 minute band play, we want the

hourly MACD histogram to be in line....• If taking an hourly band , we want the 4 hour MACD

to be in line....

Overlaying MACD

Overlaying MACD

Overlaying MACD

• We want the higher timeframe confirmation....

Overlaying MACD

Overlaying MACD

Overlaying MACD

• Plus we would prefer the trend to be in line too....

Overlaying MACD

Overlaying MACD

Overlaying MACD

• We won’t always have everything lined up from a trend perspective so that comes down to reading the overall market.

• Let’s look at some live charts...

Counter-trend bands

Counter-trend bands

• It’s worth noting the odds on daily charts...• Once price closes back inside the bands, there’s around a

65% probability of it going on to test the opposite band.• This is useful information.• More so when we are looking at the higher timeframes

and then using that info to help us with our trade.• Let’s first look at how we can use the bands for counter-

trend entries...• Remember, it maybe counter-trend on one timeframe

but....

Counter-trend bands

Counter-trend bands

Counter-trend bands

• Is this really counter-trend?

Counter-trend bands

Counter-trend bands

Counter-trend bands

• When looking at a counter-trend trade, wait for price to close back inside the bands first.

• Saves trying to catch the bottom.• So if price pulling into a key support zone on

an hourly chart, why not wait for a close inside the 5 or 15 minute bands before entering?

• RSI divergences....

Counter-trend bands

Counter-trend bands

Counter-trend bands

Counter-trend bands

• So we can use the bands as a pure trend pullback approach but also if looking to go counter trend.

• Let’s look at some live charts....

Final thoughts....

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