BTMM Signature trades – A simplification
The markets are dynamic and as Tom Dante describes this is the hardest game in the world. In the BTMM world the rules are a little different. We bring a fixed structure to a dynamic market by using the levels which are also an integral part in how “other” traders that we often refer as “retail traders” perceive the market.
We need to learn and understand the signature trades if we are to be successful. Because you cannot master the full cycle in a short amount of time. But you can master one part of the cycle. That is where the signature trades comes in.
In this quite long post I intend to discuss with you some of the signature trades.
The5050Bounce and safety trade
The 5050 Bounce – Simplified
There are 2 main variations of this setup which is the ID50 and the 1H 5050 Bounce
In both scenarios we trade the same exact thing and the only difference really is in ID50 we use the intra-day anchor and in 1H 5050 Bounce we use the Weekly anchor or the normal peak formation. And so if we were to simplify this setup for a common person it is:
- Wait for a 13/50 crossover
- Let price pullback and hit the water (50 EMA)
- Let price come back down and close below the ketchup (13 EMA)
In an ID50
- Step 1 must be on a M15 chart
- Step 2’s pullback must include atleast 15 pips
- Your sl goes above the structure that formed on water (M/W/A/V)
In a 1H Bounce
- Step 1 must be on a H1 Chart
- Pullback must be 25 pips depending on the pair
- Sl goes above the structure on water (M/W/A/V)
An easy setup quite hard for anyone to complicate or to get wrong. It is when you start trading them that you understand the timings of these bounces and when pattern failure happens which wont be discussed in this article.
It is an easy setup to track, and you can track it by tracking the 13/50 crossovers. you can track it using stalk-board if you are looking for a paid option or as a free tool any moving average crossover dashboard will do.
The Safety trade
Safety trades are steves favourite trade and it is also the safest trade to take. There are several points to understand before aproaching this trade. This trade happens coming out of level 1 consolidation which is the one place we are told not to counter trend trade back towards the peak formation. This also means level 1 is complete and there are 2 ways to understand if level 1 has completed. One of the methods is the 13/50 cross on the H1 or the 50 /200 cross on M15 which happens at late level 1 on a normal cycle. However when reset cycles come up and the averages go way out of context to the market these confirmations become useless and hence we have to use another confirmation which is the 1xADR confirmation. Which ever method you use is situational to the market but it is quite easy to spot a peak formation based on either of these two situations.
So when we simplify this setup it goes like
- 1xADR against the current trend
- pullback towards the peak formation and forming a pattern at a POI
- 13 EMA close confirmation
SL goes 13 – 23 pips above/below the structure
The question is what is a POI? Point of interest as i am calling which is the areas you need to check this could be any of the following
- 61.8 value
- 50 value
- Mayo (and then it becomes a 5050 Bounce)
- Zone flip
- Previous peak
This might not be an easy and straight forward setup as the 5050 bounce however this is not a signature that is too hard as well.
The point you should start to track for this setup is the 1xADR and due to that reason you can see it coming a day ahead. You can track this with stalk-board from the PFH and PFL columns and tracking manually is not so hard as well except you have to go through all the pairs by yourself.
However that concludes this article about these 2 very basic and original BTMM Signature trades. The advanced portions and variations are left out to make it simple.