So what is VFI strategy and how I trade it?

Whoever is reading this blog on regular basis that I basically trade two of my strategies. One of them is named VFI or VOLUME FACTOR INDICATION. The reason I have named this is according to the volume it provides during the break of something I call WN or MN. So what is this strategy all about. Well in a nutshell it is nothing more then simple double top and double bottom or I prefer to call the formation after letter which it might remind: either W formation or M formation. So if i refer to WN or MN I am talking about neckline or my entry area. I do not necessarily enter exactly at this point since I usually expect some confirmation from currency futures market and its volume. That's why this method is called volume. I would not simply enter like a sheep at this level if I do not have the confirmation from volume that there are some money behind me going the same direction. As you have noticed I sometimes use this W and M letters in my other strategies. I take it as part of my trading arsenal. Ok, now let's look at take profit (TP) and stop-loss (SL).

I usually set my TP at the point of the projection measured by the distance between neckline (WN or MN depends on formation) and bottom or top of the leg. (depends on formation). My initial stop-loss is usually placed at the leg level but as soon as the market moves in my favour I am tightening the SL level and limiting my exposure. As you know forex market is very variable and formations are not always formed precisely by the book. It takes a lot of practice and hundreds and hundreds of hours testing, demo trading it, micro trading it before you even move to mini lots and finally lots. It is not a monkey system of "ENTRY HERE, EXIT HERE!" all the time and every pattern is in its sense unique. I really like this pattern and I have setup a trading strategy out of it because it provides good expectation and probability ratio. If legs are formed around strong resistance or support this pattern is even stronger. Also good trading strategy should be one that is tradable on any pair and any time-frame. This is also true for this strategy and if you go back to random year you will always find these patterns so it also reflects a robustness of this pattern and overall strategy.

I hope I have clarified this. I want to highlight one thing. Never ever use this pattern by itself. There is always some confirmation needed. Always know where the strong support & resistances are. Always know how the 1HOUR candle looks like. Always know how fast is the market moving and what fundamentals will be released during your trading session. Taking all this in an account I believe anyone can be successful when trading disciplinary and following all other building blogs which constitutes for a successful trader.