Tips and Tricks (April 2020) – AOTI and AOTI-EA-Assistant

I continue to collect the most interesting examples and techniques of trading using the All-in-One Trade Indicator (AOTI) and AOTI-EA-Assistant for it. I also plan to continue doing this when I have some free time from trading and programming. I hope this will be useful for all of you.

Link to the previous post is here. I also recommend reading this if you haven’t already done so. Since there is also a lot of useful information so that I do not repeat the same things.

At first, I want to answer the following question and tell you what I think about it. How to avoid bad trade?

I have been trading for more than 15 years. Like everyone else, I had my Up and Down before I reached some fundamental understanding and began to work calmly and profitably. All this happened gradually, not immediately, as in any other case.

My main enemy was psychology. And it took me the longest to defeat this particular enemy. You may have exceptional knowledge and experience, but if you are influenced by psychology – in particular fear and greed, you may fail in the market. After the first financial losses from trading, I was puzzled by only one question: how to avoid bad trades? Or, in other words, how to trade without losses? It was a bold idea that kept me from developing for a while because I was obsessed with it. I had some success, but it wasn’t what I wanted. And I wanted to trade without losses and constantly redrawn my strategies to fit this idea, looking for new ideas, trying, rejecting…

However, this is a long and not very interesting story, the essence of which is that in the end, I realized that trading without losses is impossible, as well as it is impossible to avoid bad trades completely. I can even do this as a quote:

Trading without losses is impossible, as well as it is impossible to avoid bad trades completely!

This was bad news, but the good news is that you don’t need to trade without losses! I have my own maximum achievement: increasing the Deposit by + 500% per month with almost no losses. I know that this is an achievement I will never be able to surpass. It was a very hard scalping. I almost turned gray in the end, and it was a huge stress. And a person can not constantly be in this mode because it is a destructive process. And, importantly, it was a different time and a different market, not like it is now. Old-timers of the market will understand me – trading was much more relaxed at that time. Now the market is less predictable and requires more comprehensive analysis than before. But this is still a workable task, and it is a very interesting task. A task that is worth every effort to solve!

Sorry, I got distracted. So, about the losses. My opinion, which I have come to as a result of my many years of practice, is not to try to avoid losses and bad trades, but to…

Everyone knows this, and all the classics talk about it, but we only understand it with experience. Since losses are still inevitable, the main task is to minimize (reduce) losses and allow profits to grow! Therefore, it is most important, along with lowering losses, to determine where to fix the profit! This is necessary to avoid the main mistakes of a novice trader: when losses are held for a long time, and profits are taken immediately, not allowing the price to grow and get more profit.

Tips and Tricks (April 2020)

Let’s run through some examples:

Next steps, we either trailing the stops or fix profit above the Max TP level. This way, we get more profit than we could because we let the price grow.

About the Unidirectional Signal EURUSD and USDCHF

Now about the unidirectional signal EURUSD and USDCHF, which always means doubts. This means that all calculations indicate that both pairs can reach the target profit levels. But waiting for this can be risky. We look at which pair first starts moving and close the position on the other.

Here it is important to watch the following points: Possible release of important news soon. An important trading session (European or NY) will open soon. These events can significantly affect the course of events. In particular, if we know that today is important news and get a unidirectional signal for the EURUSD and USDCHF pairs, it may be worth avoiding entering the market. Or consider suggestions from other currency pairs.

For example, EURJPY on Sell and GBPUSD on Sell:

With a high probability, if economic factors or news do not interfere, the EURUSD pair will also Sell, although the signal for calculations for this pair was for Buy. But this shows the market’s confusion, and it is worth using additional signals to make a decision.

In any case, I would not risk buying in such a situation and would rather stay out of the market. Or, when opening a position, preparing to close it in case of suspicious activity. It all depends on experience. You can see all this yourself if you have the necessary practice.

It’s one more trading example in a quiet (flat) time:

Let’s look further – another example. There is very low volatility in the pound. Perhaps there will be a movement at the opening of the NY session, but I would not wait for it and closed positions in a small amount earlier, so there may be a weakly predictable move against us.

AUDJPY

It is not always possible to predict the direction of movement with 100% confidence in advance, which depends not only on technical analysis but also on economic factors. Here I did not close the stop, but on the contrary, added a pending buy order, since the support level is powerful – confirmed earlier. And it won’t be broken right away. It is an option to either get an additional profit if we do not close the positions by the stop. Or immediately recapture the loss, if we close positions by the stop.

GBPJPY

Strong signals at a power support level. Reversal arrow + Micro Support level. It is also possible to open an additional trade or a short scalping position. The nearest target is the Entry Level and then the orange resistance line (if we do not close trade at the Entry Level).

Basic Trading Rules

As I wrote earlier: 

Look at the market in a combination of factors.

If you find it difficult to keep control of multiple currency pairs at once, then select the few that are most understandable to you. See the primary majors: EURUSD, USDCHF, then GBPUSD, EURJPY, and then other pairs. With time, you will be able to add other currency pairs and control a large number of currency pairs simultaneously, and this will not be a problem for you.

Follow money management.

Please follow the news!

Another fundamental psychological rule! Don’t trade with your last money!!! Get risk with only what you can afford to lose! When the brain bound by the task of earning money in any case, regardless of anything, the trader makes the maximum number of mistakes: this is the desire to receive profit faster, without waiting for the signals of the system, the desire to win back faster and rash opening positions, etc. If there is a problem with this, then please start with a demo account, learn to see the whole market picture, and then switch to a small real account, so that you can risk a small amount in each transaction. Do not pay attention to the fact that you will earn $10 instead of $1000 per deal on a small account. This should be earnings and an increase in the percentage of your Deposit! At the very beginning, it is more valuable to earn $10 with a Deposit of $1000 (1% of the profit) than $1000 with a Deposit of $1,000,000 (0.1%). There are many nuances here, too – it depends on the degree of risk, etc. But in general, it is convenient to think so that you do not worry about a small profit – you need to look at it as a percentage.

Another example of opening an additional trade at a strong level

Sell trade on the EURAUD pair:

But the price went against our position, and the price showed weakness near the strong Today SL level.

Yes, the Today SL level is also a strong level, along with the Today TP level.

The stop loss did not work because the candle did not close below the Today SL level on the M15 timeframe. And we open an additional buy position with a small lot increase to average our initial position.

I want to draw your attention to the fact that the New York (NY) session has already been opened, and we should not expect a strong price movement. We set the take profits of both our positions on the nearest strong level.

The Take Profit level was reached a little later:

As a result, we fix the profit = $50.46 – $25.67 = $24.79