NBTpdf.pdf

BRV S+R Trading

BRV 'No Brainer' (Indicator Free) S+R Trading

Taken from posts up to 21 st August 2008

Taken from posts by BillyRayValentine and Ironman

Index:

3-7 - Making Money and the most basic of all strategies (Strategy overview)

7 - Things To Avoid

8-9 - Trade Planning and mental maintenance

9 Î Basic S+R Checklist (Gregus83)

10 - Whats the best time of day to trade? (Ironman)

10 Î Why do these levels work? (Ironman)

10-11 - Indicators are the devil. (Ironman)

11 - More on why indicators are not needed to trade this technique. (Ironman)

12 - Strong Vs Weak Levels

13-14 - Knowing if the Level Will Hold: When to Fade, When Not to Fade

14 - Why look for price ranges and not a specific price?

14-15 Î Combining S+R with Fibonacci Levels

16Î Combining S+R with Diagonal Trendlines

17 - 19 - HOW LONG WILL THE MOVE LAST......

19 - Trade Continuation (Ironman)

19-20 Î Stop Losses

20 - Using Limit Orders

21 - Live Trade Example

22- 23 - Taking Profits (Ironman)

24-26 - Ironman's 5 minute chart Exit strategy

27 - Intraday Scalping

28 - The Importance of Hourly Closes

29 - More On Intraday Trading

30 Î Intraday Scalping Î Example

31 Î The Bottom of the Bucket

BRV S+R Trading

32 - It's all about Risk Vs Reward (Ironman)

32 Î Should I trade the news with S+R?

32 Î Trading in August Î the killer month (Ironman)

33 Î Trending Markets Vs Ranging Markets

34-35 Î Bank Flows Î 'What to expect from each crucial area.'

35 - Is the market too hot to fade

35 - Paralysed Trading

36 - THE MOST PROFITABLE TRADERS

37-40 Î Reality Realisation and Trader Reactions in Regards to Market Forces

41 - Always just keep your eyes on where the money is flowing....

42-43 Î Trading the Hype

44 - Happy Maths Î 'why we're doing what we're doing'.....

ADDITIONAL INSIGHTS:

45 - Interest Rate Comments (23 rd July 2008)

46-47 - Options

47 - S&P Index Correlation

48-49 Î Ironman's take on 'The Most Profitable Traders'

50 Î Useful Links

BRV S+R Trading

Making Money and the Most Basic of All Strategies

Throughout my years of trading, I have been lucky to have had some good experience and

have picked up two important things:

1.Trading as a means of steady income is not a painful process if you know what you are doing

2.Trading can be a very painful process if you listen to the wrong information

New traders suffer a severe disadvantage because they do not understand what moves the

market and how to react to certain outcomes. When attempting to learn, the overflow of

information out there can be both beneficial and disastrous. This article is intended to provide

one winning strategy that provides a very high winning percentage rate, uses no indicators,

and is simple to learn and follow. It is also intended to provide information regarding market

movers and how they generally operate in relation to this strategy, as it is probabilistically the

most widely used and followed.

IÓm going to outline my own abbreviated trading plan, making it easier to understand through

explanations and presenting examples as to how I trade on a long-term and intraday basis.

Before you read on, I encourage you to take a look at a general overview of the interbank

market and how it works. It baffles me that such a large portion of retail traders out there

have no clue of this structure, and itÓs no wonder why so many of them lose money on a

regular basis. Deficiency of knowledge in any endeavor is usually going to lead to failure.

Understand what you are trading before you trade it, and then move on. You can find one

here: http://www.investopedia.com/articles/forex/06/interbank.asp

Banks control the cash. Retail traders such as you or I, as well as major funds play a key part

in the movement of the market, but at the end of the day, the banks are the ones putting on

multi-million dollar positions which essentially drive the markets. We would like to think we are

a bigger part of it, but weÓre not.

Working for a major fund and a bank for several years, I realized what a joke a lot of trading

really was and how simple it really can be for any novice investor with a willingness to learn. In

my shop, we had one dedicated analyst per pair and he or she basically called out the shots to

traders on the desk. The trader is responsible for moving the cash while securing profit

whenever possible. With virtually no spread, most of the positions would last from a few

seconds to several minutes. Many of them would take tiny profits trading countertrend all day

long, along with hedging other traders, causing rises and shifting bars as you see on a regular

basis.

When an order gets placed that seems larger than life, and chips start to stack on, others

usually follow like a herd like sheep. The largest orders are placed in areas of extreme support

and resistance, and most of the market makers are fully aware of this fact. Analytics done by

the banks usually outline these areas first and foremost, hence itÓs the most widely used and

followed technique at distinguishing reversal points. Other analytics are used as well, such as

diagonal trend lines, pivots, price channels, macd, moving averages, etc., but issues over

ambiguity arise with all of them. The technique IÓll describe below uses nothing more than

support and resistance, with other methods allowing for possible trend-riding along the way.

ItÓs what the big players do; therefore, it makes sense to be doing it as well.

No strategy is going to be perfect, because on top of everyday speculative trading there are

other influences on the foreign exchange market, and it might be difficult to discern when one

price level will be more influential than another. As a retail trader following this technique,

however, it is fully possible to profit 80 to hundreds of pips in a five hour session, each and

every day. Less is more, in this case.

BRV S+R Trading

I make about 5 to 10 trades per session, each one fitting into the framework of a high

probability. IÓve used this technique over the past 3 years now because it has proven to me to

be the most reliable and simple to trade. Others will argue, but while they argue and are

looking to short GBP, IÓm already closing my trade with 20 pips of profit. They go short, and

price bounces back up, and I hope to explain why here.

Areas of support and resistance hold because unlike other methods, anyone trading in any

timeframe can look at a chart and see where price has reacted many times in the past, or what

will be a Ðno brainerÑ in the immediate future. Any level is subject to a breakout on a reaction

of news, or other various influences. It is important at all times to gauge the current market

conditions and in good judgment decide whether or not the level should hold or bust. For

example, on days of hysteria where the dollar is getting smashed, youÓre a lot less likely to

make a ton of pips on these levels if they are countertrend. The same can be true for Fridays

(stop hunting day), in times of option expiration or at the very end of the month. Regardless,

even on these days, it is possible to use this technique to enter trades in the direction of the

trend on a retracement to the exact pip, allowing you to take advantage of the madness of the

volatility.

The Trading Itself

There are 2 different types of support and resistance which generally hold: long-term and

near-term.

Long-term support and resistance levels can be distinguished on a 1-hour or greater

timeframe. I typically start with a 4-hour chart and scroll down or up depending on the

situation. Long term support and resistance levels, under laxed market conditions, can be good

for 100+ pips at a time, unless under the conditions previously described. Here is an example

of a current USD/JPY trade that bounced right off of predetermined levels. As I write it is

currently +40 pips in profit, and the original posting before the trade can be found here:

http://www.forexfactory.com/showpost.php?p=2011414&postcount=238

As you can see from the chart below, this entire area has been used as both support and

resistance many times in the past. Due to the heavy influence it has had in the market during

previous times, a very high probability exists that price will bounce right off of it.

The range of the level might be difficult to discern, as it can be rather wide. Looking at the

most recent reactionary levels, one can determine that the most relevant range of price action

is 102.74 to 102.60. Within this 15 pip range price was expected to bounce, as it did, right off

of 102.73.

BRV S+R Trading

Another example on AUD/USD you can find below. You can see that, on several occasions in

the past, price used the .9290 level as support. This time was no different. Price hit it right on

the nose and started its long journey into new highs. The original posting for this trade can be

found here: http://www.forexfactory.com/showpost...63&postcount=3

This AUD trade is a good example of ranges, and how to tell which level price will bounce off of

if multiple areas of support/resistance can be found in the same area. You can see here that in

addition to .9290 support, there is also relevant support lower at 0.9273. One strategy is to

scale into the position, putting on a portion of it at .9290 and, if price dropped any lower, put

the rest on at 0.9273. Your stop loss should be placed directly under these levels, as if price

continued to move any lower, it would signify a follow through, and clean break of this level.

Near-term support and resistance occurs when a previous level is breached, and that support

(or resistance) level acts as a resistance (or support) level. The best timeframe to view these

on is 1-hour or less. Starting with a 1-hour chart, work your way down to smaller timeframes,

paying close attention to the points of support and resistance on the last wave moving

countertrend to the current one. 1-hour charts sometimes cover up these areas, requiring a

30-min or 15-min chart to view them properly.

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