15555
by xard777
A recap on the XARD - Simple Trend Following Trading System
## Trading Strategy: Arrow Cycle to Arrow Cycle with 2nd Semaphore and EMA 55
### 1. Understand the Tools and Indicators
- **Arrow Cycle Indicator:** This indicator points to potential trend reversals or significant market movements, which may correspond to overbought/oversold conditions or momentum changes.
- **Semaphore Indicator:** Semaphores (dots) indicate potential tops or bottoms in price action. The 2nd Semaphore is considered more reliable.
- **EMA 55 (Exponential Moving Average):** A technical indicator used to gauge market trends. Crossing the EMA 55 acts as a confirmation filter for the trend.
### 2. Basic Strategy Outline
- **Entry Point:** Wait for the new Arrow cycle to begin. Enter the market at the appearance of the 2nd Semaphore, provided the price has crossed above the EMA 55 (for long trades) or below the EMA 55 (for short trades).
- **Compounding Trades:** Add positions each time an additional 2nd Semaphore appears within the same Arrow cycle.
- **Exit Point:** Exit the market either when the Arrow cycle ends or based on your defined exit conditions.
### 3. Steps to Execute the Strategy
#### Initial Preparation
- **Chart Setup:** Configure your trading platform with the necessary indicators (Arrow, Semaphore, and EMA 55). Use timeframes that match your trading style (e.g., 5-minute, 15-minute charts).
- **Capital Allocation:** Determine your starting capital and the amount you’re willing to risk per trade. Follow strict risk management guidelines.
#### Entering the Market
1. **Identify the New Arrow Cycle:** Note the start of a new Arrow cycle.
2. **Wait for the 2nd Semaphore:** Be patient and wait for the 2nd Semaphore to appear. This step confirms the trend.
3. **Confirm with EMA 55:** Ensure that the price crosses the EMA 55 line before entering a trade:
- Long Trade: UP Arrow and Price crosses above EMA 55.
- Short Trade: DN Arrow and Price crosses below EMA 55.
#### Compounding Within the Cycle
1. **Initial Position:** Enter your first position when the 2nd Semaphore appears and the price has crossed the EMA 55.
2. **Additional Entries:** Add to your position each time another 2nd Semaphore appears within the same Arrow cycle, maintaining risk management.
3. **Risk Management:** Always use stop-loss orders to mitigate adverse movements. Adjust your stop-loss as needed to lock in profits:
- Initial stop-loss: Place at the last Arrow.
- For compounded trades: Place stops at the previous 2nd Semaphore.
#### Exiting the Market
1. **End of Arrow Cycle:** Prepare to exit the market when the Arrow cycle is expected to end.
2. **Consistent Review:** Regularly review market conditions. If there are signs of reversal or if semaphore indicators suggest a trend change, consider exiting or tightening your stop-losses.
### 4. Compounding Example
- **Starting Capital:** $10,000
- **Initial Risk per Trade:** 1% (i.e., $100)
- **First Trade:** Enter on the 2nd Semaphore crossing the EMA 55 within a new Arrow cycle. Assume a 1:1 risk-to-reward ratio.
- **Compounding Strategy:**
- First Entry: $10,000 * 1% = $100 risk for a potential $100 profit.
- If the trade is successful, new capital is $10,100.
- Second Entry: Enter at the next 2nd Semaphore within the same Arrow cycle and repeat the risk management process.
Continue to compound as long as the Arrow cycle persists and 2nd Semaphores keep appearing, but always within your risk tolerance and capital limits.
### 5. Practical Tips
- **Patience:** Wait for the right signals. Impatience can lead to premature entries and increased risk.
- **Position Sizing:** Use a compounding calculator or a trader's journal to track your positions precisely.
- **Flexibility:** Be prepared to adapt your strategy if market conditions change. No strategy is infallible.
### Example Workflow Summary
1. **Identify:** New Arrow cycle starts.
2. **Wait:** For the 2nd Semaphore to appear and ensure the price has crossed the EMA 55 line.
3. **Enter:** Initiate a trade and place a stop-loss at the last Arrow.
4. **Compound:** Add positions at each subsequent 2nd Semaphore within the cycle, placing stops at the previous 2nd Semaphore, maintaining proper risk management.
5. **Exit:** Stop all trades when the Arrow cycle ends or based on your exit strategy.
By adhering to these steps and maintaining stringent risk management, you can effectively leverage the power of compounding within an intra-day trading framework. Remember, consistency and discipline are key to successfully implementing this strategy.
NB In the chart (shown below) I also show where the last Square Semaphore is - this helps with establishing the roadmap of the market being traded.
Included updated XU v65m XARD UNIVERSE indicator and XU v65m-TRIANGLES1 indicator - Remember to save template.
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XARD: If Carlsberg made charts... Probably the best charts in the world
Quick follow-up from today’s trading session 
