Mastering Assets
Finding your edge in Forex trading, even with mentorship, means developing a unique
advantage that increases your probability of success. Your mentor provides guidance, but
your edge is something you cultivate through experience, analysis, and personal refinement.
Here’s how you can discover and strengthen your trading edge:
1. Master Your Mentor’s Strategy, but Make It Your Own
● Understand the "why" behind their trades. Don’t just copy their signals—ask
yourself why they took a particular trade.
● Identify what resonates with you. If your mentor focuses on price action, but you
prefer indicators for confirmation, adjust the method to fit your personality.
● Track their success rate. Backtest their strategy over different market conditions to
see when it performs best.
2. Focus on a Specific Market or Asset (Specialization)
● You have already chosen V25 (Volatility 25 Index) as your main asset. To gain an
edge:
○ Study its behavior deeply—how it moves during different sessions, its
volatility patterns, and reaction to key price levels.
○ Know its liquidity shifts. When does it trend smoothly, and when is it
choppy?
○ Analyze historical patterns. Find recurring setups that align with your
trading style.
3. Develop a Niche Strategy (Find What Works for You)
● Your mentor may have a general strategy, but refine it to fit your strengths. Some
key approaches:
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○ Swing Trading V25: Find the best technical setups for swing trades (e.g.,
support/resistance, breakouts, trend continuations).
○ Use a specific confirmation method: Example: Instead of just price action,
confirm with RSI divergence, order blocks, or moving averages.
○ Risk-to-Reward Focus: Adjust your risk-reward ratio based on how V25
behaves.
4. Build a Strong Trading Journal (Data is Your Edge)
● Record all your trades (both wins and losses).
● Track patterns: What setups work best? When do you lose the most?
● Look for consistency: Which strategy gives you at least a 60% win rate?
● Example Journaling Format:
○ Entry reason (technical/fundamental)
○ Trade outcome (win/loss)
○ Emotion before/after trade
○ Market conditions at entry
5. Strengthen Your Mindset & Risk Management
● Deep Work for Trading: Continue your 'going ghosting' approach to eliminate
distractions.
● Emotional Mastery: Learn to detach from losses—V25 will have unpredictable
moments.
● Position Sizing: Stick to risk-per-trade principles (e.g., 1–2% per trade).
● Backtesting & Demo Testing: Before committing to a new setup, test it on a demo
first.
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6. Challenge & Adapt (Continuous Learning)
● If your mentor mainly trades in one way, explore other perspectives (e.g., ICT
concepts, Wyckoff, Smart Money Concepts).
● Study successful traders outside your mentor’s strategy.
● Adjust based on market shifts—what worked 3 months ago may need slight changes.
Final Thought: "Your Edge is Personal"
A mentor can show you the door, but you have to walk through it by crafting a method
that aligns with your strengths, psychology, and market understanding.
Would you like me to help structure a trading plan based on your focus on V25? 🚀
4o
You said:
yes and help with this: How do I back test a strategy effectively and I want to answer the
questions on (2. Focus on a Specific Market or Asset (Specialization))
ChatGPT said:
Let's break this into two parts:
1️⃣ A structured trading plan for V25 (your main focus asset)
2️⃣ How to backtest a strategy effectively
1️⃣ Trading Plan for V25 (Volatility 25 Index)
This plan will serve as your blueprint for trading V25 efficiently and consistently.
📌 A. Trading Style & Approach
✅ Market: Volatility 25 Index
✅ Trading Style: Swing Trading (holding trades for hours to days)
✅ Timeframes Used: 15M (entry), 1H (trend confirmation), 4H & Daily (big picture)
✅ Indicators/Tools Used:
● Price Action: Support & Resistance, Supply & Demand Zones
● Trend Tools: Moving Averages (e.g., 50 EMA for direction)
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● Confirmation Tools: RSI Divergence, Order Blocks
● Volatility Analysis: ATR (to measure stop loss range)
📌 B. Entry Criteria (When to Enter a Trade)
🔹 Trend Confirmation: Only trade in the direction of the dominant 4H trend.
🔹 Key Levels: Look for rejections or breakouts from support/resistance zones.
🔹 Entry Triggers:
● Bullish Setup: Price rejects a strong demand zone & forms a bullish engulfing candle.
🔹
● Bearish Setup: Price breaks key support & retests before continuing down.
Extra Confirmation:
● RSI divergence (if price makes a higher high but RSI makes a lower high = reversal
signal).
● Order Block rejections (if price respects an institutional order block).
📌 C. Exit Strategy (Take Profit & Stop Loss)
🛑 Stop Loss (SL):
● Below the last swing low (for buys) / above last swing high (for sells).
● Use ATR to adjust based on market volatility.
🎯 Take Profit (TP):
● First target: 2x risk (Risk-to-Reward = 1:2).
● Second target: Next major support/resistance level.
📌 D. Risk Management
📌 Max Risk per Trade: 1–2% of account balance.
📌 Max Open Trades: 2 trades at a time.
📌 Trading Psychology Rules:
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● NEVER chase trades—wait for your setup.
● Accept losses & move on.
● Follow your plan—no impulsive entries.
2️⃣ How to Backtest a Strategy Effectively
Backtesting is testing your trading approach on past data to see if it works before risking
real money. Here’s how to do it step by step:
📌 Step 1: Set Up Your Chart & Define Rules
● Choose the asset (V25) & timeframe (e.g., 4H & 1H for swing trading).
● Define entry, stop loss, and take profit rules (from the trading plan above).
● Keep all settings the same—don’t change strategies halfway through.
📌 Step 2: Scroll Back in Time & Trade Bar-by-Bar
● Hide future price action and start scrolling back on your chart.
● Identify a valid entry setup (e.g., price bouncing off a demand zone).
● Mark where you would enter, set SL & TP.
● Move price forward bar by bar to see how the trade plays out.
📌 Step 3: Record Every Trade
📌
Create a backtesting journal and record:
📌
Date & Time (e.g., March 20, 2025, 10:00 AM)
📌
Entry Reason (e.g., price rejected demand zone + bullish engulfing candle)
📌
Result: Win/Loss/Break-even
📌
Risk-Reward Ratio (RRR): Was it 1:2 or higher?
Emotional Notes: (Did you doubt the setup? Were you overconfident?)
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🔹 Example Entry in Journal:
📌 Step 4: Analyze Your Data
✅
After backtesting at least 50–100 trades, look for:
✅
Winning %: Does the strategy win at least 55% of the time?
✅
Risk-to-Reward Ratio: Is it consistently 1:2 or better?
Best Conditions for Winning Trades: Does it work best in strong trends or ranging
✅
markets?
Most Common Losing Trades: When does the strategy fail?
📌 Answering Your Specialization Questions (V25)
Here are the key questions you wanted to answer for specializing in V25:
1️⃣ How does V25 behave in different market conditions?
● It moves in strong momentum bursts, meaning sharp moves up/down.
● It has periods of consolidation before explosive trends.
● It often respects support & resistance zones strongly.
2️⃣ When is V25 most volatile?
● During market openings (London & New York time).
● After prolonged consolidation—breakouts can be aggressive.
● Near psychological levels (e.g., 1500, 1550, 1600).
3️⃣ Does V25 react well to price action or indicators?
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● Price Action dominates (support/resistance, breakouts, supply & demand).
● Indicators (RSI, Moving Averages) work better for confirmations, not signals.
4️⃣ What are the best setups for V25 swing trading?
● Breakout & Retest: Price breaks a key level & retests before continuing the trend.
● Order Block Rejections: When price taps an institutional zone & reverses.
● Divergence with RSI: When price makes a higher high but RSI makes a lower high
= trend reversal signal.
Final Steps: Putting It All Together
🔹 Backtest at least 50 trades using this strategy.
🔹 Identify what works best for you (track win rate & risk-reward).
🔹 Start demo trading to refine execution.
🔹 Once confident, go live with strict risk management (1-2% per trade).
Would you like me to create a trading journal template for you? 🚀
ChatGPT said:
Got it! I’ll break down each asset in full detail, covering behavior, trading strategies, best
setups, risk management, and deep insights.
🔍 Mastering V25, XAUUSD, and V75 –
Complete Guide
📌 1. Understanding the Behavior of Each Asset
🟢 Volatility 25 Index (V25)
📌 Characteristics:
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● V25 is a synthetic index that moves in structured trends and often follows
technical levels strictly (support, resistance, order blocks).
● It has moderate volatility, meaning it can trend well but also consolidate frequently.
● Liquidity is steady—doesn’t have extreme spikes like V75.
● Works best with swing trading strategies.
📌 Trading Conditions:
● Trends Respect Support/Resistance Strongly: This makes it a great asset for
swing traders who hold trades longer.
● Breakouts Follow Through: Unlike XAUUSD, where fakeouts are common, V25
respects breakouts better.
● Sessions: Moves well during London & New York hours but can be slow in Asian
sessions.
📌 Best Strategies for V25: ✅ Breakout & Retest: Wait for a major level to break, then
✅ Swing Trading Demand & Supply Zones: Identify high-probability zones & wait for
enter on a retest.
✅ Moving Averages for Trend Confirmation: Use 50 EMA on the 4H timeframe to
price rejection.
determine trend direction.
🟡 XAUUSD (Gold)
📌 Characteristics:
● Gold is a safe-haven asset, meaning it rises when the USD is weak and drops
when the USD strengthens.
● Most volatile during news events like NFP, CPI, FOMC (avoid trading around these
times unless you trade news spikes).
● XAUUSD has fakeouts & liquidity grabs—you must confirm breakouts.
📌 Trading Conditions:
● Moves with USD (Inverse Relationship): If the USD Index (DXY) goes up, Gold
often goes down.
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● Best during London & New York sessions: Volatility increases when US markets
open (2:30 PM CAT).
● Gold respects psychological levels (2000, 1950, 1900, etc.).
📌 Best Strategies for XAUUSD: ✅ Liquidity Grab & Reversal: Market makers grab stop
✅ Breakout & Fakeout Strategy: If a breakout happens, wait for confirmation (e.g., a
losses before pushing price in the real direction.
✅ News Trading Strategy: Watch economic calendar—trade only after the news is
second retest).
released.
🔴 Volatility 75 Index (V75)
📌 Characteristics:
● Most volatile synthetic asset—it moves aggressively in one direction.
● Fast & sudden spikes: Can move 500+ pips in a few minutes.
● High reward, but high risk—proper risk management is key.
● Requires precision timing; small mistakes can wipe out accounts.
📌 Trading Conditions:
● Highly Liquid & Fast-Moving: Best for short-term or breakout traders.
● Trending Market: It follows strong trends and rarely consolidates for long.
● Best traded in high-volatility periods: New York session (2:30 PM CAT onwards).
📌 Best Strategies for V75: ✅ Momentum Trading (Breakout Entries): Wait for a trend
✅ Scalping with Order Blocks: Use 1M & 5M timeframes to find sniper entries.
breakout, enter with the trend.
✅ Trend Following with Moving Averages: 50 EMA for trend confirmation, 20 EMA for
entry timing.
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📌 2. Deep Trading Strategies for Each Asset
🟢 V25 – Swing Trading & Technical Strategy
📌 Setup:
● Identify a strong demand zone (e.g., previous support level).
● Wait for bullish confirmation (e.g., engulfing candle, RSI divergence).
● Enter after price rejection from the demand zone.
● Risk-to-Reward: Aim for 1:2 or better.
📌 Example Trade:
1. Price drops to 1500 key level.
2. RSI shows bullish divergence.
3. A bullish engulfing candle forms.
4. Entry at 1505, SL at 1495, TP at 1525.
🟡 XAUUSD – Liquidity Grab & Fakeout Strategy
📌 Setup:
● Watch for manipulation near key levels (e.g., 2000, 1950).
● Enter AFTER a liquidity grab (wick spikes above resistance).
● Use Fibonacci retracement (38.2% or 61.8%) for extra confirmation.
📌 Example Trade:
1. Gold breaks 2000, spikes to 2005, then drops.
2. Price closes below 1998.
3. Enter sell at 1997, SL at 2006, TP at 1985.
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🔴 V75 – Momentum & Scalping Strategy
📌 Setup:
● Identify a strong trend on the 1H timeframe.
● Drop to 5M timeframe to find an order block.
● Enter on the retest with tight SL.
📌 Example Trade:
1. V75 is bullish, and price retests previous resistance as support.
2. Enter at 187500, SL at 187200, TP at 188000.
3. Risk-to-Reward = 1:3.
📌 3. Risk Management & Position Sizing
Since these assets have different volatilities, adjust lot sizes accordingly:
Risk Control Tips:
✅ Never risk more than 2% per trade.
✅ Always check volatility before entering a trade.
✅ Stop trading after 2 consecutive losses (psychology control).
📌 4. Trading Psychology & Execution Plan
● Be patient. Wait for perfect setups—no rushing.
● Follow your plan. If a setup doesn't fit the strategy, skip it.
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● Use a trading journal. Log every trade, find patterns in wins/losses.
● Control emotions. Fear & greed destroy accounts—stick to your rules.
📌 5. Final Action Plan (What You Should Do Next)
🔹 Backtest: Take at least 50-100 trades per asset in demo before going live.
🔹 Use a structured journal (record every trade, track mistakes).
🔹 Start trading live with strict risk management (1-2% risk per trade).
🔹 Refine strategy as you go. Identify what works best for YOU.
🔥 Now you have the complete roadmap for mastering V25, XAUUSD, and V75! Do you
want me to create a trading journal template for you? 🚀
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