Understanding Support & Resistance ๐
Two key concepts every beginner should know:
๐ข Support: A level where prices may stop falling.
๐ด Resistance: A level where prices may stop rising.
These levels help traders understand potential market movements.
#Trading#StockMarket
I might actually found a better way to trade the Initial Balance (IB).
Statistically, there's a 85% chance of a single break, which is crazy high probability target.
Now here comes the strategy:
- you wait for the IB to form as usual
- but you also wait for at least one 15m FVG to form inside of that (if there's isnt a 15m FVG, you dont trade it)
- you set a pending order at the 0.5 of the range
- stop loss at the 0.75 and take profit at the high of the range
Quick note: if the 15m FVG gets inversed, you can trade the opposite of that.
To sum up, this strategy has an 85% of hitting either the high or low of the range and a avg. of 2RR
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How to Create a Solid Risk Management Plan for Prop Firms:
My theory is simple.. always trust your own data and trading system.
Most traders generalize risk like 1% per trade or $1000 per trade. Thatโs a mistake. Risk should never be generalized. Your data should decide your risk.
Here's a simple framework:
Letโs say you backtest 100 trades (without curve fitting) and discover an interesting pattern:
Only 3 times you had 3 consecutive stop losses
Most of the time it's 1โ2 losses followed by a winning trade
Now build your risk around this.
Aggressive Trader
Assume 2 consecutive losses
Multiply by 2 โ Plan for 4 consecutive losses
Risk per trade = Total drawdown รท 4
Mid-Aggressive Trader (Low Backup Capital)
Assume 2 consecutive losses
Multiply by 3 โ Plan for 6 consecutive losses
Risk per trade = Total drawdown รท 6
Conservative Trader (No Backup Capital)
Assume 2 consecutive losses
Multiply by 4 โ Plan for 8 consecutive losses
Risk per trade = Total drawdown รท 8
This approach allows you to:
โ Pass challenges consistently
โ Take payouts repeatedly
โ Avoid blowing accounts unnecessarily
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