My Implementation of 00NR7’s System

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com

I’m going to approach my trading very systematically for the foreseeable future. I will focus on following 00NR7’s trading system. It appeals to me because it is based on trading gaps, which are non-subjective trading candidates that draw attention to themselves each day. He also brings a lot of Trader-X influence, a style that I followed with mixed success in the past, but I blame that on myself, not the system. 00NR7 uses fib retracements in his trading, and I like having that non-subjective (there’s that word again!) entry threshold and profit target.

Here’s how I will implement my understanding of 00NR7’s system:

Generate Watchlist

1) Populate watchlist from Briefing’s gap lists before the open
2) Add gappers from Prophet.net scan

Prepare the Charts

To begin with, I will trade 15 minute charts exclusively, though I will add 10 min and 5 min later on.
1) Apply fib retracements to the swing high / swing low of the morning
2) Set price alerts at the appropriate levels (so I don’t have to be watching every chart every minute)

Look For Setups

1) For Gap up, look for bullish hammer closing above 38% level and 5-ema with a volume uptick over previous candle
2) For Gap down, look for shooting star closing below 38% level and 5-ema with a volume uptick over previous candle
3) For either, watch for NR7 candles near the 38% level–enter on a stop order $0.02 above the high / low of the completed NR7

These are my entry signals, and no other shall be considered. Stops will be $0.02 away from the other side of the entry candle, with positions sized accordingly.

Trade Management

I will tentatively target 138% fib levels for exits, but will watch for volume spikes and other reversal price action. OR highs / lows will be watched for potential resistance. Partial exits may be taken if trade is profitable, with stop moved to no less than breakeven immediately thereafter.

There’s my plan. If I follow this plan, my trading is correct. If I continue to lose money following this plan, then the plan is flawed and must be changed.

This post was contributed by a guest author, and does not necessarily reflect the views of Richard or MovetheMarkets.com