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The Five Most Powerful "Trading Edges"

The Five Most Powerful "Trading Edges"

To make a really long story very short, I have found five vital "trading edges". Each of these five "trading edges" are built on valid fundamental trading principles and can be combined into one integrated powerful trading advantage.

Using the five trading "edges" below eliminates the vast majority of mistakes and pitfall most traders have that prevents them from becoming consistently successful traders.

#1) The first critical "trading edge" requires several components (a) stop loss must provide a low amount of risk to your capital, (b) stop loss must be located on the other side of real time support/resistance as shown by the Fractal Channel indicator, (c) every entry should provide a high probability reward potential such that your reward to risk ratio is 3:1 or greater.

Your "entry" is the ONLY thing you have complete control over in trading!!
After you make your "entry" then the market has complete control over what happens!!
Your job after entry is to make the best response to what the market does.

#2) The second critical "trading edge" is to understand and properly trade each of the three market modes:
  (1) Up Trend or Down Trend
  (2) MTF Consolidation
  (3) Trading Range

Why does the market mode deserve a spot as a critical "trading edge"?
The reason is that any single entry logic only handles the one single market mode that it was designed to handle. When your entry logic and trading chart market mode are in harmony then you make good profits. When your entry logic and trading chart market mode are NOT in harmony you'll experience those unwanted equity losses. By keeping your entry logic and trading chart market mode in sync with each other you will improve your trading profitability.

#3) The third critical "trading edge" is to understand and use the following three key fundamentals in priority of importance:
  (1) Price Action (the best is MTF Price Action Gapless indicator)
  (2) Volume (the best is Time Based Volume indicator)
  (3) Price Action and Volume together produce Support & Resistance (the best is Fractal Channel and MTF Fractal Channel indicator)

Important Corollary:
All indicators that do not provide valuable insights into at least one of these three key trading fundamentals listed above is to be considered a non-essential trading indicator.

#4) The fourth critical "trading edge", which is the greatest one of all, is Multiple Time Frames (MTFs). To best illustrate why using MTFs is the greatest "trading edge", let's look at a typical single time frame consolidation breakout trade on a 5 min trading chart. This trade setup often results in a fair trade producing a reward to risk ratio generally around 1.5 to 1. Compare that to trading a MTF consolidation that spans across the 5 min, 15 min, 20 min, 30 min, 60 min, 120 min, and 240 min time frames. This trade setup often produced powerful breakouts that produce as high as 20 to 1 reward to risk ratios. These MTF consolidation breakouts create High Probability trading entries where the stop loss risk is low and the reward is very high. That is why MTFs became my third "trading edge" and the greatest "trading edge" of all. More details about MTF's are covered in the first 8 articles and videos which starts with "Truth vs Fallacy".

#5) The fifth critical "trading edge" is using "Advanced Position Sizing" to properly control your risk per trade while maximizing your profit potential per trade. This is the correct way to use leverage in your favor without increasing your risk! Advanced Position Sizing can double or triple your profit while lowering your per trade risk. Complete details about Advanced Position Sizing is covered on this web page "Advanced Position Sizing - Done Automatically ".