The 5 Simple Steps to The Ultimate Intra-Day Strategy
(The Strategy Use in Winner Edge Trading Room)
Here's a simple shot of how the Market moves.
It trends, consolidates and breaks through again. This happens constantly in the Market.
All we want to do in this strategy report is teach you the rules and principles we use to catch the moves in the market that are shown above. Trading is not easy and this report will not make it easy, but it will give you a strategic Edge that others don't have.
Step One: Define the trend on the Daily and 4 Hour Chart.
“Defining the Trend” seems like a simple and obvious step, but it is AMAZING how many people get caught up in the moment of whatever chart they are looking at and don't even think to check the other Time Frames to see if longer term momentum is on their side.
So ALWAYS know what direction the Trend is on the 4HR and Daily Chart... Always!
Defining the trend does not have to be a complicated set of rules. A simple look at the charts and determining whether Price is consistently going UP, consistently going DOWN, or moving in an overall
sideways direction will tell you what the trend is.
If you are someone who really likes rule-based thinking, you can do this:
Put a 200, 100, and 50 Simple Moving Average on your chart. If the Price is above all 3 of those on the
Daily and 4HR, it is an uptrend. If it is below all 3, it is downtrend.
And if price is back and forth between them and crossing in and out, it is a sideways market.
Not surprisingly, we are only looking for trades in the direction of the Defined Trend.
If the trend is UP (Bullish) we are looking for Buys.
If the trend is DOWN (Bearish) we are looking for Sells.
Again, it seems simple, but just sticking to the #1 Rule of defining the Trend and sticking to that
direction gives you a big Edge... and we still have four more steps to go!
Step Two: Look for the Opportunity
**Note: Step 2 may come off a bit confusing at first, but when you understand the whole puzzle, it
makes a lot of sense, so just bare with us and keep on reading :)
A trading opportunity occurs when the Market starts moving in the opposite direction of our
defined trend. If the defined trend is Up (or Bullish), an opportunity would be when we see the
market begin to move down. In short, the opportunity is the area that's circled in red:
Why is that an opportunity?
Because that means we have a chance to get a Good Price (buying at a lower price) in the direction of
the trend.
In other words, if we just buy in an uptrend, we may get in at too high of a price so there is not
enough “room” for the market to keep pushing the price higher (which means it would move down
and we would lose money); however, if we wait for the market to move down, we KNOW there is
room for it go higher because it has just recently been higher. Simple, yes, but very powerful.
Now, just because it is moving down in an uptrend, does NOT mean we are buying; it's only the 2nd
step in the process telling us we MIGHT have a trade possibility soon.
To summarize, the opportunity is just the simple step of recognizing that the Market could be giving
us a better price to trade in the direction of the Trend Soon.
Remember, step 2 is still a long way from the trade, it's only alerting us to keep our eyes open on a
given pair.
Step Three: Watch for Filters
Once we spot an opportunity in the Market, the next thing we need to do is qualify that opportunity.
In other words, we might get a whole bunch of “Potential Trades” but only a small percentage of
those will be high quality trades.
The Filtering Process helps us eliminate many of the bad trades that would just get us into trouble.
No matter how many filters you have, you will still lose trades, but having good filters can mean the
difference between a Net Winning System or a Net Loser.
This whole report could be focused on Filters and we would still not even scratch the surface on how
many things you could look at in the market, but we'll keep it simple and just mention a 3 good ones
to start (remember, our trading room is a live look at how to implement things like using filters).
1. Fibonacci Levels
Since we are using trends in this strategy, there should always be a swing that you can draw a Fib on.
This will help you determine whether or not there is a critical level you should be concerned about. In
other words, you don't want to take a Buy Position when there is a Fib level acting as resistance just a
few pips above your entry price. That's an easy way to put the probability on the losing side.
2. Support and Resistance Zones
Fibs are already support and resistance levels, but another thing to watch out for are ZONES of
support or resistance. These occur when there is a certain level or area of price in the Market that has
rejected or supported price tons of times in the past. Many times this creates a cluster or a zone and
you don't want to trade into these areas.
3. News
News is another filter to consider. Even if a trade opportunity is looking great, News can easily throw
off your opportunity. Not all news has to be avoided, but be careful of major events.
Remember that filters are something that comes with experience more than just reading an E-Book.
It will take time in the market (or in our trading room) to really understand how to navigate the
market and avoid bad trades. Using filters can minimize your losses, especially with some experience
in the Market.
You won't avoid every losing trade, but if you can avoid enough of them, you'll be a profitable
trader.
Step Four: Wait for the Break
Since we know that the “Opportunity” in this strategy comes when price is moving in the opposite
direction of our defined trend, you may have guessed that the Trade comes when price BREAKS BACK
into the direction of our trend.
Remember when we defined opportunity with this graphic?
The reason that is the “opportunity” is because we know price is likely to break back at any time.
When it does, we have a trade.
Defining the Break:
All you need to do is draw a rough trend-line on the bearish move circled in the image above(use a
lower time frame like 30 Minute or 1 Hour to draw your line). When price breaks that “mini-trend”
and starts going back in the direction of the Bigger Trend, we will have more than just an opportunity
—we'll have a trade!
So Step 4 is this: Knowing that the opportunity is a quality one (no major filters), having your trend line in place (30 Minute or 1 Hour Chart) and WAITING for the BREAK BACK into the direction of our defined trend (candle close on whatever time frame you have drawn the Trend Line on).
Remember, a little trend line and break doesn't mean much if you don't know what direction the
market is likely to go on the bigger time frames. Using a break on a smaller time frame that is
actually showing continuation on the Larger time frame is an easy way to cheat :)
Step Five: Strike Entry
The entry is called the “Strike.”
We call it that because it is typically a quick and powerful move when the Market breaks back into
the direction of the longer trend. As a trader, there is nothing better than getting on board just as the
Market is ready to make a Strong move in your favor which is why we love this strategy so much.
Trade Management/Setup:
For a Buy Strike Entry, Stop Loss will be BELOW recent lows and Take Profit will be a few pips BELOW
recent Highs. The Opposite of what's show below is true for a Sell Strike:
The strike is a powerful strategy. Most traders don't have an understanding of what the Market is
trying to do and how to implement a strategy to take advantage of it.
Now, there is an entire other part to this strategy that actually implements a second entry using the
same strategy concept. The second entry is called the Boomerang entry and it refers to the set-up
that often occurs after the original Break.
However, this set-up is one that has too many variables to explain with a written document so we
only teach it in our Trading Room. That way, we can actually explain the Boomerang with real
examples rather than a vague document.
That brings me to my Pitch for our Trading Room.
Quite Simply, I really think you ought to try it out.
We will continue to give you free information and we'll never stop doing so, but seeing the action live
in our room is the ultimate way to shorten the learning process and start trading profitably SOONER.
Not to mention the fact that you will be able to copy our trades and make pips even before you can
trade profitably on your own... Making money WHILE you learn to make money—it's almost too good
to be true :P
So, as an encouragement, we have a Special Offer for those that Downloaded this Report.
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Thanks again for reading this Strategy Report.
We hope it is a great step in your path to becoming a profitable trader and that we can be a critical
part to that process.
- Chris and Nathan (trading room hosts) and the rest of the Winner's Edge Team
