Secret
Profit Levels is a price action breakout trading system based on
Secret Profit Levels Indicator that draws an box on the chart.
Timeframe:
H1
(1 hour) is my preferred timeframe for trading this strategy.
Currency
Pairs:
I
prefer to trade with pairs that have low spreads, like the EUR/USD.
Indicators:
Secret
Profit Levels Indicator
Chart
Setup
How
To install:
1.
Download the installer (in zip format) from the Member’s area.
2.
Open the downloaded archive by double-clicking on it or extract it by
right- clicking on it and choosing “Extract”
3.
Run the SecretProfitLevels.exe file, which will start the
autoinstaller
4.
Once the autoinstaller has started, read and accept the agreement if
you agree and follow the instructions on autoinstaller.
5.
After the installation process is finished, you’ll habe the
indicator and the template installed and ready to use in your MT4
platform.
Long
Entry Rules
1.
The trend must be heading up.
2.
Wait for the price to climb up towards a round number level. We want
the price to break 2/3rds of the entire range between 2 round
numbers. For example, if we are in uptrend on the EUR/USD and price
is in between the 1.3000 and 1.3100 levels, we want the price to
climb up above 2/3 of this range or above the 1.3067 level to
consider that as a possible long trade set up.
3.
As soon as price reaches 15 pips below the next round number, we can
open a buy order. If we use the same example with the EUR/USD pair
above, as soon as price breaks the 1.3085 level, we can go long. We
can also use a pending order to enter trades.
4.
The stop loss is set 15 pips under the entry point.
5.
We have 3 options in setting the take profit – Conservative,
Aggressive and Managed.
a)
Conservative exit – The next round number (1st target). In the
EUR/USD example above, our first target is the 1.3100 level.
b)
Aggressive exit – This is the round number level plus 15 pips (2nd
target). In our example, it will be at the 1.3115 level.
c)
Managed exit – Here, we close half of our position on the round
number level (1st target), then move our stop loss level to the break
even and close the rest at the round number plus 15 pips (2nd
target). This way, we can lock in some profit and preserve it by
moving the stop loss to break even.
Long
Trade Example
And
now I’ll show you a long entry example.
Below,
a long trade was taken on the EUR/JPY pair on the H1 (1 hour) chart.
There
was a sign to look for a long trade as the price has moved above the
136.670 level, which is 2/3 of the entire range between the 136.000
and 137.000 levels.
So,
a pending buy order for 2 lots was set at the 136.850 level and it
was triggered a couple of hours later.
A
stop loss was set exactly 15 pips below the long entry at the 136.700
level.
Next,
when price hit the 137.000 level, the first lot was closed, the stop
loss was moved to break even at the 136.850 level and the take profit
for the second lot was set at the
137.150
level. Not long after, the price had moved through the take profit at
137.150 and hit the second take profit level.
From
this trade, we bagged 15 pips from the first lot and 30 pips from the
second.
Now
let’s take a look at Short trade conditions.
Short
Entry Rules
1.
The trend must be headed down.
2.
Wait for the price to decline towards a round number. We want the
price to break 2/3rds of the entire range between 2 round numbers.
For example, on the EUR/USD, if price is between the 1.2800 and
1.2900 levels, we wait for the price to decline 2/3 of this range or
below the 1.2833 level to look for a possible short trade set up.
3.
As soon as price breaks below the next round number minus 15 pips, we
can open a sell order. In our example, as price breaks below the
1.2815 level, we can go short. We can also set a pending sell order
instead of waiting for the price to reach that level.
4.
Set the stop loss 15 pips from the entry point.
5.
We also have 3 options for setting the take profit – Conservative,
Aggressive and Managed.
a)
Conservative exit – The next round number (1st target). In our
example, our first target is the 1.2800 level.
b)
Aggressive exit – This is the level 15 pips below the round number
(2nd target). In our example, it will be at the 1.2785 level.
c)
Managed exit – Here, we close half of our position when price
reaches the round number (1st target), then we move our stop loss to
break even and close the rest 15 pips below the round number (2nd
target).
Next,
I will show you a short trade example.
Short
Trade Example
On
the image below, you can see a short trade on the EUR/USD H1 chart.
Close
to the New York session open, the price has reached 2/3rds of the
range between the 1.2500 and 1.2400 levels or below the 1.2433 level.
This was a signal to prepare for the upcoming short opportunity.
The
trend direction at this time was clearly to the downside as the 10
SMA was decreasing in value downwards and the price was below it most
of the time.
The
price declined and hit the trigger level for placing a sell order at
1.2415 and a short position with 2 lots was opened.
Immediately
after that, a stop loss of 15 pips was
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