published-date Published: March 13, 2024
update-date Last Update: June 28, 2024

I earned $11K last month with this trading strategy – Astronaut Auditorium #6

In a recend Astronaut Auditorium, our renowned trader, Devon, outlines his XAUUSD strategy to achieve $11K in a month.

He affirmed that Bitcoin and Gold are his primary focus of investment, but the framework can perform equally well in various markets, including the forex pairs like EU, GBPJPY, GBPUSD.

Devon highlighted the rigorous sleeping schedule as the reason for his success in trading, prioritising money over sleep. His trading technique involves a mixture of intense scrutiny and hands-off strategy, determined by the market movements.

He explained that his trading schedule is quite erratic, finishing trades early morning to waking up till late night. This has helped him transition to a full-time trader, making $1000 in a day.

How to trade Bitcoin & Gold

The significant approach for bitcoin and gold trading generates great profits and helps grow the account in days. The strategy explained by Devan for trading bitcoin involves stacking the position at the top and bottom where the price is consolidating after placing the trade.

You can let those positions run for the day without worrying about the loss because the chances of profit are high once it enters the market.

On the other hand, the approach for gold trading needs constant and close monitoring and sitting there until you are finished. Sometimes, it takes long trading sessions and sometimes, you are done early in the morning.

Best time frames to open a position

The methodical approach to find the best time frames to open a position involves identifying the range-bound pricing behavior and their capability to swap between the time frames, facilitating them to adapt to varying market dynamics.

Devan explains his strategic and ideal approach for locating a compression area or time frames to open a position in a podcast with Antonio.

To pinpoint the trending opportunities and substantial price levels, you should mark the high and low on the 4-hour chart using the rectangular tools.

What strategy to follow to look for the consolidation zone on 4-hour chart

  1. The first step is to look for the consolidation zone on the marked 4-hour chart. The strategy here to follow is to go for shorter time frames, such as 1 hour, 30 minutes, 15 minutes, and 5 minutes.
  2. What Devan does to look for the consolidation zone is to mark the previous day’s high and low without including the candle wicks. He anchored all his tools on the rectangle bodies.
  3. Consolidation is basically the time period when the stock is moving in well-defined patterns and does not rise over the resistance line.
  4. Sometimes, the consolidation will not be on a 1 hour chart, making you move to a shorter time frame of 30 minutes. If not on a 30 minutes chart, it might appear on 15 and if not on a 15 minutes chart, it could be on 5.
  5. If it starts consolidating on a 5 minute chart and not consolidating on other time frames, then the 5 minutes is going to turn into consolidation on 15 minutes. Now, you have to flip to 15 minutes to catch the consolidation and if it continues, you will monitor or follow the higher time frames of 30 minutes and 1 hour.
  6. Devan explained that the consolidation periods can reach across multiple time frames, ranging all the way from 5 minutes to 4 hours and you have to flip between various time frames.

The leading XAUUSD strategy for winning trades

Devan reflected on his leading XAUUSD strategy for profitable trades.

  • Marking the support or resistance levels or high and low points on the chart.
  • Moving to 1 hour charts to catch the sight of price action.
  • Identifying the consolidation zones and checking for breakouts. 
  • His tactic to make money includes, using rectangular tools on a 4-hour chart, waiting for the zones to be broken, and waiting for price pullbacks.

Price action breaking out

Devan explains that if you find no consolidation on a 15 or 30 minutes chart and you are already dropped out of the 1 hour range, you are going to look for consolidation on the 5 minutes chart where the first area of consolidation happens.

The price action breaks out of this 5 minutes range, which is also the consolidation zone. Now, the thing to focus here is to wait for the structure to build out and price to pull back.

Furthermore, Devan suggested to avoid entering on the breakouts immediately because it can be short-lived or false, minimizing the risk of going for false breakouts.

Order settings and trade management to avoid fakeouts

Devan stated that he set the buy stop once giving chance to candles to come down, such as placing buy stop above the new high point and sell stop below the new low point on the chart after observing the price action breakouts and pullbacks.

Moreover, you can use the mental stop loss sometimes to manage the trades and put stop loss in profit while avoiding to put stop loss anywhere and let it run.

Entering on the break of newly created high and low

You should place the buy stop order to buy a security above the recent or newly created broken high where the price is expected to move in position direction after the price action breakout.

Similarly, Devan stated that he usually places the sell stop below the newly created low because the price is expected to fall there after pullback. Setting these orders ensure genuine breakouts and save the traders from fakeouts.

Problems traders come across while applying XAUUSD strategy

  • Devon affirmed some cons of this way of trading, stating that sometimes the price action breakouts of the consolidation period and reverse shortly after this, faking the breakout.
  • The traders can “Wink in” if the trade is triggered before the pullback, causing significant losses due to price moving against the trade.
  • Furthermore, another con of this way of trading that some traders encounter is the accurate moment to enter the trade. For example, the timing mismatch between the entry and pullback can lead to potential loss if your plan does not go with the traditional framework.
  • Relying on the mental stop loss is risky, as it requires an extremely high level of discipline. The traders guess or determine the exit point in their head and do not predetermined the exit points, leading to unexpected losses.

When is the best time to find a good trading opportunity

Devon stated that there is no fixed time in a day to find a profitable trade, as you can find it even in early morning or late at night, depending on your strategy and analysis, market flow, and understanding of entry points.

Furthermore, he explained that trading at 4:30 or 5:00 am in the early morning provides good opportunities for gold, while trading at 12:00 or midnight can offer the price movement of 20-30 points.