An efficient trading strategy at your fingertips! Get your trading off to a flying start with this effective trading strategy! Works on any time frame, market and asset. Good for intraday and End Of Day trading!
An Efficient Trading Strategy For You
Whether you’re a beginner or a seasoned trader, this great trading strategy can benefit you. Why this strategy?
First: it can be used on any time frame. Any market. Any asset. And any type of trading: intraday trading, end of day trading, swing trading, but also logn term investing.
Then, it is simple and easy.
1 Trading Strategy – 3 Technical Indicators
First, in order to use this trading strategy, you need 3 technical indicators:
At TradingLikeHeroes we have designed this indicator for the best traders in the best trading sessions. But, let’s explain how to use them.
See how the DAS indicator is one of the best:
The efficient trading strategy begins with the analysis of the market structure
First and foremost, you need to study the structure of the market. Yes, you need to check that you trade long in an uptrend, not in a downtrend.
To this end, we’ll use a diptych: 2 charts side by side. On the left, the upper time frame. On the left your trading time frame. Both use the same indicators.
2 charts, 2 time frames
Necessary indicators for an efficient trading strategy
So, the indicators configuration is the following (on both charts):
- on prices, the A7 indicator
- FTABoll(1)
- FTABoll(4)
- FTABoll(5)
- DAS
No trading without analyzing the structure of the market
First, we need to check the structure of the market. On the left chart, the price must be in an uptrend. You can look for a FTABoll Safe Zone or the orange line of DAS being rising and above the zero line and blue line.
In (1) the DAS (orange line) is rising up, above the blue line, above zero and going to go above the +10 level. Notice: the probability of movement’s duration are better when the blue and orange liens are rising up.
Moreover, the FTABoll indicator gives you hints about the trend. You’re looking for Safe Zones: it’s when the FTA (the 2 lines very close one to another) is above the mid line.
More about that later. But, for now, let’s see what are the tools to be used.
The tools for an efficient trading strategy
In order to set this strategy up, you need a few tools.
Charting with technical analysis
First, you’ll need a tool called TradingView (affiliate link). If you don’t know TradingView, here is a cool tutorial. It’s in french, so put the automatic translation on. Alternatively, you can use ProRealTime, a good platform with very powerful screeners for stocks. But not great for cryptocurrencies.
An efficient trading strategy needs a good broker
Then, you need a broker. It can be Interactive Brokers for stocks, Oanda, Fxpro or FXCM for Forex or Binance for cryptocurrencies.
In fact, this tutorial is focused on the indicators, and each broker has specificities, but we’ll see that in other posts. Now, the indicators.
Which technical indicators for a good trading strategy ?
So, you’ll find a lot of technical indicators on internet and in books. But, I have been researching for more than 20 years. And what I propose is this combination:
- A7 indicator
- FTABoll(1)
- FtaBoll(4)
- Ftaboll(5)
- DAS
then, organize your TradingView layout as following:
You can use which time frames you want, for example: 3h-15m, 1h-5m, 5m-1m (for short term scalping on leverage). The 2 charts layout is configured through the following menu:
Here are the different steps to follow.
The efficient trading strategy steps
First, the strucutre of the market
Now, you certainly know the saying : “trade with the trend”? It’s so true! First of all, before trading, you must analyze the structure of the market. And with the FTABoll indicator, it’s so easy!
On multiple time frames, the FTABoll(4) and FTABoll(5) must be in Safe Zone. If you don’t know what a Safe Zone is, read my post about the FTABoll.
So, look on several time frames and see whether both FTABoll are in Safe Zone or not. And. if they are positive, it’s even better.
Signals in our trading strategy
So, with the Three indicators A7, FTABoll and DAS, there are a number of possible strategies. But, here, we’ll focus on the DAS indicator. And the main signal is when the orange DAS line crosses the +10 level up. But there are secondary signals like:
- DAS crossing above the -10 level
- orange DAS line crossing above the blue one under 0
- Das crossing above the 0 level.
Heads up and confirmation
Whereas the DAS crossing is a sort of heads up signal, what makes the real opportunity is when prices go above the A7 indicator.
Here is a full example with all our indicators:
Your stop loss
What makes a good stop loss in this efficient trading strategy? First, notice that we are looking for strong bullish swings and long trends. But a trend is made of several swings with consolidations.
So, in order to enter a strong swing, prices must go fast upwards. Then, you can put a stop loss under the previous candle bottom.
But, to follow a long trend, you must avoid being exited by short consolidations. So, you can also take the previous bottom on the upper time frame. Think of Dow’s waves. A trend is made of higher and higher bottoms and tops. And you can use the upper time frame to filter the noise.
Commented example
Now, let’s comment another example.
On this chart, whereas the 5m FTABoll(5) is negative, it begins a good Safe Zone. Then, on the 1m time frame, in (2), the orange line of the DAS indicator crosses above +10. And in (2′), the FTABoll(1) starts a Safe Zone. Prices go through the 17 indicator and surf above. This is a perfect entry.
Not all bottoms are alike
An efficient trading strategy must adapt. It is why, trading strategies using a sole indicator are not very good. In our efficient trading strategy, you must take into account 2 types of bottoms. Round bottoms and V bottoms. Let’s see an example.
In both cases the orange DAS cross above the blue DAS line or above -10, zero. But in the V Bottom (1), the 3 FTABoll end their Sell Zone and start a new Safe Zone quickly. In the case of a round bottom, you lay get 2 or more signals ((2) and (3)) before a new Safe Zone.
Conclusion: wait for FTABoll(4) and FTABoll(5) to start a new Safe Zone or go flat after a Sell Zone.
Efficient trading strategy: the importance of coherence
Now, a very important thing. You probably know that you must trade with the trend. But you also must trend with the momentum. And, when is it?
At TradingLikeHeroes, we have a simple mean to detect great momentum:
- your probability of winning a trade is good when there is coherence between:
- the different indicators
- time frames
By coherence I mean: the indicators go in the same direction.
This principle is very important. Because, when there is no coherence, there is no good trend. Let’s see an example of no coherence.
So, in (1) and (1′) we have coherence between price, FTABoll(4) and FTABoll(5) on each time frame and between time frames. But, in (2) and (2′) there is a lack of coherence. While the price may continue to rise, it heralds a trend reversal (at the right end of the 5m time frame).
A secret to get an efficient trading strategy
As mentioned above, prices rise in trends, but a trend is made up of consolidations and corrections. And what we are looking for is long and strong trends. Yet, we want to stay in the market and not be exited by a stop loss.
The little secret is to study the structure of the market and:
- find a time frame where signals are crystal clear
- within this time-frame, indicators filter out noisy price movements
- do not enter long on higher end of upper time frame candles.
Look at that chart:
On the upper time frame the candlesticks (1), (2) and (7) match with (3), (4), (5), (6) and (8) on the lower time frame. Entering long on the top of the japanese candlesticks means buying on a top in the lower time frame.
What’s more, the candles in the upper time frame are neat: an ascending row of green candles with no correction. The trend is crystal-clear on this upper time frame. By the way, the 5m DAS is clearly bullish, and there is coherence.
Learn more
Stay tuned to learn more. Go on our trading strategies page. Get powerful indicators:
Illustrations : canva & Charts: TradingView