102# The Dance Trading Method Trading System,
15 min trading method
1. Trade ONLY during the London/ NY Overlap for USD pairs.
2. Trade ONLY during the Asian/London Overlap for JPY pairs.
3. Trade ONLY during the Frankfurt for EUR pairs.
1. Obviously some pairs fit more than one session. Look up the times on your own. Do SOME
1. 15 Minute charts ONLY for all entry signals.
1. The other charts are for direction and fine tuning the entries and exits as needed.
2. The tips of wicks on H1and D1 are great S/R Levels to take trades off and for exits.
3. Only “Touch” trades are acceptable on H1 and D1 and should also match P/A on M15.
1. No more than ONE “main” chart set to M15 and three smaller charts for each “main” currency.
Smaller charts are to be set to M5, to H1 and one to D1. M5 is optional if you find you are getting confused at any point or that you end up paying too much attention to it, losing lots of trades.
1. Trade WITH the trend of the moment FOR ALL trades and assume the trend will continuefrom the previous session on the first entry.
2. The 50 EMA with the 35 SMA moving averages determine the trend!
1. Look for longs ONLY when Price, is above the 50 EMA/ 35 SMA Lines.
1. 5 and 10 EMAs must also be above the 50 EMA/ 35 SMA Lines unless already in a
counter trend trade.
2. ONLY trade the “first touch” of the 10 EMA IF it is the SECOND bar in the retrace andyou trade it EXACTLY at the “touch” with no more then 9 pips SL.
3. DO NOT TRADE “touches” of the 5.
2. Look for shorts ONLY when Price, is below the 50 EMA/ 35 SMA Lines.
1. 5 and 10 EMAs must also be below the 50 EMA/ 35 SMA Lines unless already in a
counter trend trade.
2. ONLY trade the “first touch” of the 10 EMA IF it is the SECOND bar in the retrace and you trade it EXACTLY at the “touch” with no more then 9 pips SL.
3. DO NOT TRADE “touches” of the 5.
3. NO EXCEPTIONS for beginners! Price and THE 50EMA/ 35 SMA MUST AGREE
AGREE WITH THE TRADE, PREFERABLY FROM A PULL BACK TO the 50 or
3. CONSTRAINMENT is the BEST and easiest to “see” entry. (explained in the price action
and examples sections.)
4. “Touch Trades” are next best signals against the 35 or 50. They can also happen at the 10
1. TWO BAR RULE for “Touch Trades” is simply this. It is a “retrace” trade and If it takes
more than TWO large bars to “get there” (to “touch” the MA), pass on the trade and wait for
P/A to reveal where Price is really going.
Maximum Number of Trades!: NO EXCEPTIONS EVER !!!
1. Maximum of 5 successful trades. GIVE IT A REST after that and spend some time doing
something else, GET A LIFE apart from trading.
2. Maximum of 3 Losing Trades. LEARN to stop and get over it!
1. Three TOTAL PER SESSION !
2. MAXIMUM OF TWO IN A ROW, then walk away and get a fresh perspective!!!
1. Stop Losses need to be “adequate” and that means different SL on different currencies. If you find yourself using more than 15 pips consistently for the SL, you need to refine your entries.
2. Move the SL to BE as soon as you feel the trade will not take out your SL on a “breath.”
3. A good place to set your original SL is Spread + just a couple of pips below or above the
previous “round number” or ema that price touched and moved away from. Be sure to include the spread.
4. KEEP THEM TIGHT!: During a move, keep the SL reasonably tight. Meaning move it to the bottom (or top) of the last bar each time one closes until you get strong with this strategy. This is especially important with ANY sort of P/A bar that might indicate a reversal, Tighten to the close of the P/A Bar immediately!
1. Though there is no specific TP in this strategy, the best way to lock in profits is to move your SL to the extreme of the previous bar + spread and wait for the current bar to close. The only exception to this is when approaching a “round number” level or a stronger EMA like the 50 EMA/ 35 SMA Lines on a retrace. Tighten your stops at those levels as price has a nasty tendency to reverse at them. The other option, with more experience will be to exit and
immediately short at that “first touch” of the 50 EMA/ 35 SMA Lines.
2. If it becomes apparent you are in a ranging or choppy market, just be a bit more careful and look only for solid entries based on S/R levels such as the Round Numbers and constrainment of the lower level EMAs, usually around a “round number” or previous P/A or S/R level.
3. DO NOT BE AFRAID TO TAKE YOUR PIPS EARLY there will be more trades! Youdon't have to knock it out of the park every time to be very profitable with this strategy, and ittakes experience to master the longer trades. Taking a quick 20 or so on a move is completelyacceptable and you WILL get better as time progresses.
4. If P/A indicates a reversal between “round number” levels, get out! There will be more
5. NFP DAYS (non farms payroll) learn to take your pips early, even if it's only 10. These days
are extremely unpredictable. The whole week can be as well, so be careful in NFP weeks.
Locking in Profits:
1. Be cautious in moving your SL too aggressively, but keep it no farther back than the bottom (or top) of the second bar back from current price action and preferably no farther back than the last bar bottom (or top).
2. If you have an extremely large bar, move the SL to the just below the last “Round Number” it passed land watch price movement very closely. If it hasn't yet passed a Round Number level, move to slightly less than 70% of the bar's total and wait. It will either continue to explode or retrace pretty rapidly and take out your stop. LARGE BARS RETRACE OFTEN, so don't
hesitate to take your pips before it hits the SL you are trailing AND USE THE “round number” levels!
3. If a large bar “dead ends” at a stronger EMA, or a “round number” level, move your SL very close to the level. Probably about 2 times Spread or less and wait. If the move is strong, it will continue and blow through pretty quick. If not it will take out your stop.
Ranging/ Consolidating Markets:
1. The 50 EMA/ 35 SMA Lines have a strong tendency to either “wind” around each other and “flattening” while sticking close to each other during a period of consolidation or ranging. On “ranging” days you will often see price also wind around them and give you definite
opportunities to enter at solid S/R levels or at Round Number levels on either side of the 50 EMA/ 35 SMA Lines.
2. Be very cautious in these markets unless you are experienced with this strategy. Wait for better signals if not experienced.
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