The objective is to test a core strategy for profitability, leveraging Single Time Frame (STF) price action and minimal indicators. Below is the general summary of the strategy, the sequence is as follows:
1. The trade is managed on the 1 Minute chart to reduce the stop-loss risk.
2. The profitability ratio is minimum 3:1
3. The 20 and 200Day Exponential Moving Average determine the trade direction. 20 crossing above 200 gives 'permission' to only trade Long; 20 falling below 200 give permission to trade Short.
4. Lower indicators are MACD and Stochastic.
Long Trade Entry:
1. 20Day trending above 200Day.
2. Stochastic is low in the cycle, STO fast_line crosses above the slow_line and rolls back up (Signal 1).
3. MACD crosses above the zero line, falls back to zero line, using the zero line as support before the MACD fast_line crosses above the slow_line and rolls back up (Signal 2)
4. The trade is triggered on the close of the first full Green candle above the 20Day MA (Trigger).
5. On opening the trade a Trailing Stop is simultaneously triggered at the previous support level (Use fractal channels to identify the support level). A dynamic stop with some level of intelligence will be required as defined below.
6. Stay in the trade utilizing a combination of the following: dynamic stops, fractal levels for support/resistance, the Candlestick pattern and MACD fast_line crossing back below the slow_line on the 2 min chart.
The inverse rules hold true for Short trades.