A New and improved version!

TL;DR

1. Clean up version of my mechanical strategy
2. Step-by-step guide from start to finish.

Disclaimer: I am not a financial advisor. The content for this article is purely for educational/research purposes only and is merely based on my personal opinions.

Please note: There will be affiliate links in this article. But it will only benefit both of us. If you do not wish to participate under my affiliate links, please feel free to Google them separately. Cheers!

Since the last step-by-step guide, my mechanical strategy has undergone numerous changes. As you know, I have always been trying to simplify the strategy, while trying to maximize total return through extensive backtesting and a series of live trades. As a result, I’m now writing a new step-by-step guide to outline how my mechanical strategy works today.

Intro — Mechanical Strategy

A mechanical strategy involves executing and repeating the same trade setup every day, relying on strict consistency and effective money management to become profitable over time.

My mechanical strategy is simple, using a combination of trend following and retracement strategy to enter into a trade. There is zero fundamental analysis and minimum technical analysis. Only using 21 EMA and Fibonacci Retracement tools and we will have directional bias and entry/stop loss/take profit levels plotted out.

Trading Tools

1. Timezone — Singapore time (GMT+8) (UTC +8)
2. Enable Session break
3. 21 Exponential Moving Average (EMA)
4. Fibonacci Retracement Tool

Details

1. 1 Trade/day
2. Trading Pair: Gold (XAUUSD)
3. 1% or 0.5% risk per trade.
4. 1-hour timeframe
5. Entry: Fibonacci Level 38.20%
6. Stop Loss: Fibonacci Level 0%
7. Take Profit 1: Fibonacci Level 76.40%
8. Take Profit 2: Fibonacci Level 127.20%

Step-by-Step Guide

Step 1 — Morning Chart Setup

This is what I will do every morning. Once the first-hour candlestick of the day closes either above or below the 21 EMA, we can determine the directional bias. Then we will plot the Fibonacci Retracement tool from the previous day's highest to lowest points, and from there we will have our entry, stop loss and take profit levels.

For the example above, the first-hour candlestick closes above the 21 EMA, therefore our direction bias is upward. By plotting the Fibonacci retracement tool we will have trade entry, stop loss and take profit 1 & 2 levels, details below.

BUY LIMIT Order: $2299.54

Stop Loss: $2281.43

Take Profit 1: $2317.40

Take Profit 2: $2341.15

Step 2 — Place trades in the MetaTrader 4/5 Platform.

After knowing my directional bias and entry levels. I would use my smartphone to enter limit order trade in the MetaTrader 5 apps. Because I have previously passed the funding challenges from The5ers. I am using their funded account in MT5 to execute all my trades.

Step 3 — Setup trade alerts and Leave for work.

I also use the Free TradingView app on my phone for trade alerts. Typically, I set up two alerts: one for when the trade reaches my limit orders and another for when it hits take profit 1. Then, I close my laptop and head to work, occasionally checking the TradingView app to monitor the trade’s progress.

Note: After hitting take profit 1, I will take 50% of the profits and shift stop loss to breakeven. Then I will leave the trade alone letting either hit stop loss at breakeven or take profit 2.

Premium Trade Idea Through Email Newsletter

Additionally, before heading to work, I always send out a Trade Idea Email Newsletter to my premium members, detailing my exact trade entry, stop loss and breakeven levels. If you don’t have the time to learn my strategy or simply prefer something you can easily follow, feel free to visit my blog and sign up for the premium membership.

barrygamestrading.ghost.io/xauusd-trading-signal-for-02-may-2024/

Downside

My mechanical strategy is definitely not perfect. After a series of backtesting and live testing, this strategy only has a 60% win rate. But with proper money management, like risking small and good risk to reward, we can be profitable in the long run.

Some of you might think with proper fundamental and technical analysis, we could probably have a higher win rate and higher returns. I completely agree with you! Unfortunately, with my other commitments like Career & family. I simply do not have the time to stare at the chart all the time.

Endnote

This is essentially a simplified version of my current trading strategy. Simple, clean, straightforward but most importantly it frees up more time for other commitments! Although I am hoping that I could turn this part-time trading into full-time, I have to understand that patience and perseverance will bring me there!

Affiliate Links / Connect With Me

1. Connect with me on Linkedin
2. Read my blog post on Medium or Blog
3. Best Charting Tool: TradingView SuperChart
4. Thank you for Buying Me A Coffee:)
5. Useless fun fact Youtube Channel
6. The prop firm I am using: the5ers Prop Firm
7. Collect Free Stock from Webull
8. Join my trade Signal Group HERE