My Trading Hazard Checklist…

Something i’ve decided to put together recently and include in my trading plan is what i’m calling a “hazard checklist”. Basically, it’s a quantifiable pattern, condition, situation, etc that, when present, will often act on the market with such singular directional bias that I have found it just very dangerous to trade against.

1. Going long in a downtrend if price pulls back into an area of significant daily resistance (a supply zone seen on a daily chart) Or, going short in an uptrend if price pulls back into an area of significant daily support.

2. Going short in a market that just had “large implication” bad news come out, and yet the market moves up (or, good news, and the market moves down…do not go long) This includes any news that will directly affect the money supply (such as a QE, LTRO, etc). any interest rate change, any employment change, any GDP announcement.

3. Once sentiment analysis has been done, any currency that is rated as one of the top 2 currencies in terms of strength cannot be shorted under any circumstances against either of the weakest 2 currencies for that day.

4. If the previous day was an engulfing candle, or a “pinbar”, and the indication is that price will continue to move in the direction of the trend, do not fade the trend the following day.

Do any of you have any other ideas of what I could add? or what you believe would be worth considering for such a list of “universal filters?”

Of, for those that have something like this, I’d like to hear if you believe it’s done more good than harm, or if each trade is just so situational, such a universal list you don’t find applicable to you…

Feel free to comment your thoughts below.