THE WL DAY TRADING SYSTEM ... 3 STRATEGIES IN 1 PACKAGE

Description

WL stands for Wim Lievens, a Belgian trader with over 20 years trading experience. According to this trader successful trading is 20% market analysis, 30% money management and 50% discipline.

His trading philosophy is based on the following principle: “The key is to adapt to different market conditions”. In order to adapt to different market conditions the WL Day Trading System package contains three complete strategies. In addition the system includes the StrategySelector which shows the trader which strategy he needs to use depending on market conditions.

   
Suitable for : Market indices (DAX, CAC, DOW...)
: Stocks
: Forex (EUR/USD...)
: Commodities (oil, gold...)
Instruments : Futures, CFD, stocks, forex
Trading type : Day trading
Trading tempo : 3-8 signals per day
Using NanoTrader Full : Manual or (semi-)automated

The WL Day Trading System package consists of:

• 1 StrategySelector tool.
• 3 Day trading strategies (BoxTrade, T-Channel Scalping and Heikin Ashi Reversals).
• 1 Hour online coaching with Wim Lievens.

Click here to buy the WL Day Trading System package in the trading store

 

The StrategySelector

The WL Day Trading System is based on the concept that a trader cannot use the same strategy all the time. The trader must deploy a strategy which is adapted to the current market conditions. The WL Day Trading System contains three trading strategies. The StrategySelector shows the trader when to apply which strategy.

This example shows the StrategySelector. Traders must observe two things. Firstly, what is the amplitude of the waves? Secondly, is the zero line bold or not? A bold zero line indicates that the market is not volatile.

• If the zero line is bold (low market volatility) the BoxTrade strategy is applied.

• If the zero line is not bold and the amplitude of the StrategySelector wave is not at least twice the size of the preceding wave, the T-Channel Scalping strategy is applied.

• If the zero line is not bold and the amplitude of the StrategySelector wave is at least twice or more the size of the preceding wave, the Heikin Ashi Reversals strategy is applied.

Before explaining the three trading strategies it is interesting to note that:

a) All three trading strategies are contained in the same chart. The trader does not need to change charts or to modify parameters!

b) “You can only make money trading movement, not time” according to Wim Lievens. The candles in the strategies are Heikin Ashi candles based on range bars. These candles are only based on movement. The charts focus solely on movement and filter out time and most of the noise. Time is not relevant. Heikin Ashi candles based on range bars give better reversal signals than range bars themselves. It is also possible to implement the three strategies using Renko bars.

 

The T-Channel Scalping strategy

The T-Channel Scalping strategy exploits trend correction&rebound opportunities. It is traded at moments when the market is likely to trend.

When to open a position?

Step 1: check the StrategySelector.
The zero line is not bold and the size of the StrategySelector wave is not twice the size of the preceding wave.

Step 2: check the market trend.
The trend determines if the trader buys or sells short. The trend is determined by the crossing of the MA50 (black line) and the EMA20 (orange line). If the trend is negative (bearish) the chart background is red and, the trader will short sell. If the trend is positive (bullish) the chart background is green and, the trader will buy.

Step 3: wait for a correction.
If the market trend is positive, a correction is said to occur when a candle closes below the EMA20 line. If the market trend is negative, a correction is said to occur when a candle closes above the EMA20 line.

Step 4: wait for a rebound.
If the market trend is positive, a rebound is said to occur when a candle closes above the blue T-Channel. If the market trend is negative, a correction is said to occur when a candle closes below the blue T-Channel. This rebound candle is also called the confirmation candle.

Step 5: place your order.
If the trend is positive, place a buy stop order 1 tick above the high of the confirmation candle. If the trend is negative, place a short sell stop order 1 tick below the low of the confirmation candle.

 

This example shows a buy signal. The trend is positive (green chart background). A correction occurs as a red candle closes below the orange line (EMA20).

The market turns positive again and a rebound occurs when a green candle closes above the T-channel (black line). The trader now places his buy stop order one tick above the high of this candle. The position is opened in the next candle.


 

This example shows the evolution of the trade based on the above buy signal. Two targets have already been reached and the two stops are at the entry price. The trader can no longer lose. See trade management for full details.


 

Same trade example as above. The third target has now also been reached.


 

This example shows a short sell signal. The trend is negative (red chart background). A correction occurs when a green candle closes above the orange line (EMA20).

The market turns negative again and a rebound occurs when a red candle closes below the T-channel. The trader now places his short sell stop order one tick below the low of this candle. The position is opened in the next candle.

When to close a position?

See trade management below.

 

The Heikin Ashi Reversals strategy

When to open a position?

Step 1: check the StrategySelector.
The zero line is not bold and the size of the StrategySelector wave is at least twice the size of the preceding wave.

Step 2: check the market trend.
The trend determines if the traders buys or sells short. The trend is determined by the crossing of the MA50 (black line) and the EMA20 (orange line). If the trend is negative (bearish) the chart background is red and, the trader will short sell. If the trend is positive (bullish) the chart background is green and, the trader will buy.

Step 3: wait for a correction.
If the market trend is positive, a correction is said to occur when a candle closes below the blue T-channel. If the market trend is negative, a correction is said to occur when a candle closes above the blue T-channel.

Step 4: place your order.
If the market trend is positive, place a buy stop order on the high of the candle which closed below the T-channel. If the order is not triggered and the market continues to go down, lower your buy stop order to the high of every last candle until you are triggered.

If the market trend is negative, place a short sell stop order on the low of the candle which closed above the T-channel. If the order is not triggered and the market continues to go up, increase your sell short stop order to the low of always the last candle. This is called a reversal bar entry.

When to close a postion?

See trade management below.

 

The BoxTrade strategy

The Boxtrade strategy is used when the market has stalled or is losing momentum. In other words, when volatility is low. When volatility has been low for some time a strong movement can occur. The risk/reward ratio on such trades can be very good. The NanoTrader platform automatically draws low volatility boxes for the BoxTrade strategy.

When to open a position?

Step 1: check the StrategySelector.
The zero line should be bold.

Step 2: check the market trend.
The trend determines if the traders buys or sells short. The trend is determined by the crossing of the MA50 (black line) and the EMA20 (orange line). If the trend is negative (bearish) the chart background is red and, the trader will short sell. If the trend is positive (bullish) the chart background is green and, the trader will buy.

Step 3: only after 6 completed candles, place your order.
If the market trend is positive, place a buy stop order 2 to 3 ticks above the top of the box. If the market trend is negative, place a short sell stop order 2 to 3 ticks below the bottom of the box.

Tip: the ‘best’ boxes are those boxes which are on or near the MA50 – EMA20 lines. Consider rejecting trades based on boxes far removed from the MA50 – EMA20 lines.

 

This example shows a box which consists of more than 6 candles. After the 6th candle the trader can consider placing an order. The trend is positive (green chart background) so the trader placed his buy stop order 2 to 3 ticks above the box. The box has come to an end before the order was triggered. The trader must cancel his order.


 

This example shows a box which consists of 6 candles. After the 6th candle the trader can consider placing his order. The trend is positive (green chart background) so the trader placed a buy stop order 2-3 ticks above the box. The market made a strong upwards move out of the box, triggering the order and resulting in a profitable trade.

When to close a position?

See trade management below.

Tip: although the system combines three strategies and the speed at which the charts evolve can be high, traders need to keep in mind that there are about 3 to 8 good signals per instrument per day. It is important to be patient, apply the right strategy (sometimes there can be overlaps or quick successions) and wait until things line up perfectly. Don’t get tempted by signals before they are complete. Enter correctly.

 

Trade management – When to close a position?

The NanoTrader Full is the optimal platform for the WL Day Trading System. It allows automated trade management based on multiple targets and multiple stops. The below description is based on a position of 4 lots. The trader can open a position of a different size. Whether you buy 2 lots, 3 lots, 4 lots ... the NanoTrader Full will automatically manage all position sizes based on the most prudent solution.

All targets and stops are programmed on the basis of a volatility measure called the Average True Range (ATR). The higher the volatility the further the targets and stops. The lower the volatility the closer the targets and stops. Remember Wim Lievens’ principle: the trader has to adapt to market conditions.

 

This example shows the situation immediately after a position has been opened. Four targets and two stops have automatically been placed by the NanoTrader platform.

When the first target has been reached, the trader moves his (closest) stop to the level of the entry price. On this part of the position he can no longer lose.

Tip: simply click the triangle in front of the order label in the chart and drag the order to the entry price level.

When the second target has been reached, the trader also moves his second stop to the entry price. The trader can at worst break-even but can no longer lose.

 

This example shows another short sell situation after the second target has been reached. The trader has moved both his stops to the entry price. He can no longer lose.

When the third target has been reached, the trader will move the remaining stops when new swing lows (in case of a long position) or new swing highs (in case of a short sell position) are reached.

 

This example shows the same short sell situation as above but after the third target has been reached.

The fourth target can never be reached ... the trader keeps on moving it away from the market whilst at the same time moving his stop. It is the stop which will close the position.

Tip: it is possible to use a TacticButton and convert the order to a trailing stop order (as an alternative to moving the orders manually).

 

This example again shows the same short sell situation as above. The trader has now lowered the stop based on the swing movement. This guarantees him a profit on his last lot.

But things will not always go as planned ... what to do if the market moves against the trader before even the first target is reached? When a candle closes below (above for short sell positions) the T-channel, place the closest stop on the low (high) of this candle. This will reduce the loss on losing trades.

 

This example shows a short sell position which was opened based on a box. The market, however, does not go down and a green candle closes above the T-channel. The trader has lowered his closest stop to the high of this candle to reduce his risk. The position was stopped out later.

 

The WL Day Trading System package consists of:

• 1 StrategySelector tool.
• 3 Day trading strategies (BoxTrade, T-Channel Scalping and Heikin Ashi Reversals).
• 1 Hour online coaching by Wim Lievens.

Click here to buy the WL Day Trading System package in the trading store

Practical implementation

If you are not yet familiar with the NanoTrader Full platform, please visit the quick start page.

Setting up

Step 1: Firstly, activate the strategy. Right-click on the instrument you wish to trade and select the relevant strategy.



Click here to buy the WL Day Trading System package in the trading store