The Wait Is Over: Here It Is... The Minibahn Mafia!

Please note that The Mafia is designed to be used by more ADVANCED TRADERS, and I make no apologies to aspiring traders that do not possess the 3M's and 3C's (mind, method, money management, competency, contacts and capital) who in all likelihood will get all confused.


M5 and M15.

Money Management

Sound money management is essential to sustainable and profitable trading. Though I shall not cover in great lengths on the subject, I will share my own money management technique.

On any given trading day, my daily equity at risk is capped at 3%. I further divide this into 10 to 20 trades, meaning that I risk only 0.15% to 0.3% of my equity on any given trade.

Trading Rules

1. This is an ADVANCED intraday trading strategy adapted for trading using the M5 and M15 charts. The indicators you will need as well as the template I use can be downloaded here:

(a) b-clock_(h-m-s).mq4
(b) Stoch Candle OverBought-Sold.mq4
(c) OnChart_Stochastic_Channel_(FL_MTF).mq4
(d) Pivots_Daily_vMB1.0.mq4
(e) Pivots_Monthly.mq4
(f) Pivots_Weekly.mq4
(g) OnChart_Stochastic_Channel_(FL_MTF)_vM5.mq4
(h) Bands.mq4

2. Determine bias by observing the day's opening price relative to the daily pivot point. If price opens ABOVE the daily pivot point, then bias is bullish/long. If price opens BELOW the daily pivot point, then bias is bearish/short.

3. Look at the "slow" stochs (360,180,180 on M5 and 120,60,60 on M15) firstly. If the %K (green) line is above the the %D (red) line, bulls are in control... therefore, look for opportunities to buy support. Naturally, it's best to wait for the crossover AND when both lines are above the 20% level of the stoch channel. For shorts, wait for the opposite signal.

4. Use the "fast" stochs (30,10,10) to time your entries and exits.

5. Good entries at e.g. D3, W1 or Mo1 levels will present opportunities to perform multiple trades... to continuously enter and exit until the "slow" stochs signal a reversal.

  • If price is at PP, watch for a move back to R1 or S1.
  • If price is at R1, expect a move to R2 or back towards PP (shorts outperform longs approx. 58% to 42%).
  • If price is at S1, expect a move to S2 or back towards PP (longs outperform shorts approx. 56% to 44%).
  • If price is at R2, expect a move to R3 or back towards R1 (shorts outperform longs approx. 83% to 17%).
  • If price is at S2, expect a move to S3 or back towards S1 (longs outperform shorts approx. 83% to 17%).
  • If there is no significant news to influence the market, price will usually move from P to S1 or R1.
  • If there is significant news to influence the market price may go straight through R1 or S1 and reach R2 or S2 and even R3 or S3.
  • R3 and S3 are a good indication for the maximum range for extremely volatile days but can be exceeded occasionally (at R3, shorts outperform longs approx. 97% to 3%; and at S3, longs outperform shorts approx. 97% to 3%).
  • Pivot lines work well in sideways markets as prices will most likely range between the R1 and S1 lines.
  • In a strong trend, price will blow through a pivot line and keep going.
  • Once support or resistance is broken, the level in question becomes its opposite, i.e. former support becomes resistance and former resistance becomes support.
** It is important to understand, however, that these are probabilities and not certainties.

6. Stop-losses (SL) are totally unnecessary if you've adhered to all of the above rules. Also, should you be caught by premature reversal trades... employ the standard cost-averaging techniques. Step back, take a look at the next two pivot levels and calculate the appropriate trade size and R:R to re-set the positive expectations.

Well, that's it in a nutshell. Please feel free to review the trading logs posted here to further familiarise yourself with the strategy... and remember, practice makes perfect. Should you require further clatification, you'll most probably find me here ( most weekdays.


Mark said...

Use "fast" stochs to time entry -> So how about the old rule? Do we still make entry at +- 15pips around pivot line or do we enter whenever the fast stochs cross no matter if it's below or above pivot line (as long as it in the -15,+15 range)?


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Fixed Ratio Money Management

It's been a while since I last blogged about Money Management, what many consider to be the most important yet overlooked subject in trading. As one of the three (3) pillars of trading success (the other two being Mind and Method), I therefore feel that I have an obligation to share more of my thoughts on the matter.

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