Try This Every Morning And You’ll Make Money

The 5 minute bar

Already experienced with the 5 minute bar? Skip to the end for your practise.Never heard of the 5 minute bar? Then read on.

OK for this exercise you need to open up your IG account at 7:45 am ready to trade the FTSE at 8:05am.

If you have been following us for some time you will know about this but here is the exercise. At 7:45 am note yesterdays close. Note if it was a down or an up day. At 8 am watch the first 5 minute bar form. Note is it continuing the trend from yesterday, closing the gap, going away from the trend? Once the bar has formed note the length of the bar and direction. Now its 8:05 am you need to find the low of the bar plus 2.5 pts and the high of the bar plus 2.5 pts. That is your entry for this 5 minute bar system. It’s called a break of the bar. Your target? The length of the bar + 5 pts. Your stop? Set it at the other end of the bar from where you are entering and add 2.5 pts.

Make Money

Now if you want to do this every morning and make money here is the very first thing you have to do.

ONLY TRADE this on MONDAYS and TUESDAYS and on Wednesdays, Thursdays and Fridays you practice until you can do these numbers in your head. DON’T get tempted to trade when you see one of these come up on another day.

Let me repeat that, ONLY TRADE THIS on Mondays and Tuesdays.

Why does it only work on Mondays and Tuesdays do you ask? Well actually it can work at any time BUT on these days the retail traders, after reading the “My Shares Weekly” over the weekend, come in and buy and sell the latest hot tips. This creates volatility and volatility is our friend for this strategy.

If you are a beginner trader this is a great place to start your journey. We trade this exact system here at Magnetic Trading just with more filter. Filters? Filters are things we apply to the trade to make it more profitable. For example, your first filter is do this at 8 am. Your second filter is only Mondays and Tuesdays. Technically your very first filter is to trade the FTSE. You spotted that at the start of the article? Traders develop filters over time. You will develop your own if you follow this for long enough.

We will shortly be releasing a new course specifically for beginners about this method with all the filters and an introduction to trading and trading psychology.

One last thing if you are really new so you don’t lose your shirt. Your STOP. Also known as the STOP LOSS. Don’t forget place it at the other end of the bar plus 2.5 pts. That way if your trade goes the wrong way you will get stopped out and live to trade another day.

OK putting this all together? the chart and your levels.

I have taken this from last Tuesday 16th May. Lets go over this, the low of the bar was 7451.4 so adding 2.5 pts means if the bar breaks down then our entry would be 7449.

The high of the bar is 7464.5 so adding our 2.5 pts means the entry is 7467. The length of the bar is 13pts. Our target is going to be 18 pts which is the difference between your entry and your stop. Another easy way to calculate is the length of the bar plus 5 pts. Stop is going to be at the opposite end of the bar to entry plus 2.5pts or another way of saying it was the other entry point. So in this instance my entry point was 7469 and my other possible entry was 7449 so that becomes my stop when I enter at 7469.

You are going to have read this over and over again and look at charts. But eventually this will trip off the tongue and you will be able to trade this with your coffee in the other hand.

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I know all about the 5 Minute Bar whats new?

If you are a more experienced trader then you may already be trading this 5 minute bar with us.However, don’t switch off just yet, this is for you to. How often do you practice your set ups?

Depending on your experience do you still make silly mistakes in and out of the trades?

This is a perfect starting point to do, what is known in education, as deliberate practice. If you are a guitarist 10 minute of practicing scales is deliberate practice. 10 minutes sitting fiddling on your guitar is not deliberate practice.

And so it is with trading, deliberate practice can be mentally going though the entry and exit. This will give you so many benefits including the mental fortitude to notice your reactions when the trade starts heading in the wrong direction. Also the fortitude to stay out of the market if it is not a Monday or Tuesday. Now there is no substitute for the experience of actual trading when the chips are down mentally it can be stressful but there again this practice allows you to almost experience that but with a little more breathing space so you can become more self aware.

Try it and let us know what you find out about your trading and yourself. Email us at the usual email we are interested to hear.

If you do understand the 5 minute bar and want to trade alongside us in our live room you can join here with our brand new pricing. Click on the image below, where you can hear Cameron and Mark talk a little bit more about their approach.