三步贸易 (the three step trade)

Many people have asked me how to get the longer, often more profitable trades. It happens to many us; we get caught in trading small time frames that we miss the bigger opportunities. I have devised a set of objective rules that many successful traders follow and would like to take the opportunity to share it with you. It is based on three steps, alert, confirm and enter.

If you have any constructive criticisms, suggestions or questions, I’d love to hear from you. You can email me at [color=#0000ff]hemal_pandya@hotmail.co.uk[/color].

SETUP

As the name suggests, this strategy only requires the 1hr chart. I am using same template that I have discussed in my thread. However, you can set it up with the following settings:

Moving Averages (MA):
Simple 80
Simple 200

CCIs: 21 & 84 with 0 as a level.

Step 1- Alert
Look for the cross of the two moving averages. When they cross, you are only looking to take a position in the direction of the 80ma. So if the cross has happened and the 80 is above the 200, you are only looking for a long.

Step 2- Confirmation
The 84 CCI must be in positive if you are looking for a long and in negative if you are looking for a short.

Step 3- Enter
Wait for the 21 CCI to break the 0 level in the opposite direction that you intend to take a position. Then as it breaks the 0 level again in the direction you are looking to take a position, you enter.

Stop Loss Level:

Your stop loss should be above/below the significant high/low on the same 1 hour chart. Ideally, this should be above/below the cross of the moving averages.

Exit:

Exiting a trade is a more personal matter. Based on this strategy you would exit the trade when three candles close above/below the 80 ma.

Examples 1

May I suggest opening the “threestep-no trade” chart which is attached.

1 Alert- You can see that we had the cross of the moving averages, so you would be looking for a long position. (1st vertical line)

2 Confirmation- Please note that the 84 CCI has broken down below the 0 line (2nd vertical line). Therefore you would not be looking to continue. The 84 CCI MUST be positive for a long trade.

3 Entry- Hopefully you will be thinking “what entry”, precisely, there’s no entry here. Start again.

Example 2
Kindly open the 2nd chart “threesteptrade”.

1 Alert. You can see that we have had the cross of the moving averages (1st vertical line). What way are you looking to trade? I trust you’ll be shouting “short”. Good stuff.

2. Confirmation- the 84 CCI remains negative.

3. Entry – The 2nd vertical line shows where the 21 CCI breaks into positive and then falls bellow the 0 line and that’s your entry at 108.70. (break of the support line was a possible entry if you were quick)

Stop Loss- At 112

Exit- you would still be holding this trade as three candles have not closed above your 80 ma.

Back test it and let me know what you think.

Regards,

Hemal