I have decided to start writing my blog again as I feel it helps my thought process and question my trading in a good way. When we are sharing things, we check it makes sense and for me it further enhances my understanding of what I do and do not know.
Without this process I find myself almost trading on autopilot and not really checking how setups relate to my plan. So I will continue to blog to aid with my own development and if it helps others, great.
I now try to trade with Monthly and Weekly larger moves, and look for setups within this on the daily time frame.
I tend to take setups at Key support and resistance levels with confluences from trend lines, liquidity hunts (stop runs) and occasionally a moving average.
The two setups I will be trading are Bearish/Bullish engulfing candles and a 3 candle setup, which involves lower lows for sells and higher highs for buys.
Engulfing
Key Features of an Engulfing bar ( for me)
- Body of candle 2 closes below open of candle 1 for sell
- Body of candle 2 closes above open of candle 1 for buy
- Price is at a Key level
Other confluences which can aid:
- Liquidity has been taken
- With Trend
- At a Trend line for confluence
- Volume of candle 2 is higher showing more activity and a strong response.
I then mark the body of candle 1 with a fibonacci and mark 50% of the candle. I find that on successful trades, often price comes back to this level before rejecting further.
I am in the process of collecting stats on a 50% entry as a limit order compared to just trading after candle 2.
There are several options however –
- Entry after candle 2 formed.
- Limit order at 50%
- Watch 50% and wait for further rejection at this level
Of course you may miss many setups by waiting on 50%. However, the Risk reward ratio is much better, and quality of trades is better than quality.
I have added an image showing a confluence of factors which personally gives me more reasons to enter a trade.
Rather than just trading a specific pattern, I try to look for a series of reasons and confluences.
Getting out of a trade is always the trickiest part in my opinion. The next Key level of trouble area has a higher chance of success, but I like to try and stay in when a trend is on my side until it is broken.
This is more often than not easier said than done and one part of my trading I am working to improve.
followforex 
Hi Andrew
I have just recently discovered your older posts whilst looking for help and advice on ICT Breakers. I have found your information on this very useful, clear and well presented and it has helped me understand more about this method so many thanks for posting.
I am curios as to why you have not continued with ICT’s methods and switched to Engulfing candles, ICT methods can get a little confusing at first but looks promising. Do you have any other information that you are willing to share about these methods?
Pleasant trading and hope to read more soon.
RBS
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Hello mate, thank for the comment. I still use the principles learn’t from ICT, especially turtle soup (liquidity raids) as well as the other methods mentioned.
The engulfing candle is something which I have witnessed a lot at key support and resistance. At this point I often also seen a liquidity hunt/ turtle soup. This also applies to breakers too.
So I would say that the pattern is more of a confluence which gives me extra confidence. I also occasional use the volume profile as a confluence to my trade ideas too.
I will make a note to write an article in the future to explain things a little more clearly with diagrams.
I’m currently working on statistics for exit strategies as the more I have developed my trading, the more I have realised this is as important (if not more).
Thanks again for the comment.
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