Welcome to the world of Smart Raja Concepts! Before diving into strategy, it is essential to prepare your mindset. To fully apply these concepts, you must give yourself time—don't expect results in just two or three months. Stay patient and commit at least six months to fully understand and experience price movements, knowing that discipline will lead to a light at the end of the tunnel.
The core principles of this approach revolve around rigorous risk management, deep understanding of market structure, and precise execution through advanced entry techniques.
1. The Bedrock: Master Your Risk Management
The number one rule in risk management is simple: you have always to be ok with how much you could possibly lose. You cannot control the amount of money you are going to win, but you absolutely can control your potential losses.
We subdivide risk management into two types:
- Static Risk: This is the basic type used most often at the beginning, managing risk on only one position. You should use a maximum risk of 1% or 2% per trade (with 2% being the maximum percentage you should risk per day). For example, on a $1000 account, a 1% risk equates to a maximum potential loss of $10. With static risk, you can also manage your position by cutting losses short; if the price starts moving against you but hasn't violated your full stop loss (SL), you can close a portion (e.g., 0.50%) to ensure your final loss is less than the initial 1% risk.
- Dynamic Risk: This is more complicated and suited for experienced traders, requiring intuition. Instead of entering with a full 1% position, you divide it (e.g., into two 0.50% positions). You still risk only 1% total, but you potentially add the second position at a better price, usually as the price goes against you but before hitting the SL. This method offers the potential for less risk and more reward.
Ultimately, while it is normal to focus on wins at the start, you must concentrate on reducing your losses, as this is the only path to making money out of the market.
2. Decoding Market Structure, Zones, and Ranges
Understanding when and where big moves happen is crucial.
Sessions and Volatility: Usually, the most volatile sessions, where the big candles form, are the London open and NY open. Statistically, candles that form outside of these main sessions are less volatile and much smaller.
Ranges and Zones: Before taking any trade, you must measure the range, which is the distance between a support and a resistance. Remember that support and resistance are not specific prices (like 164.500) but rather a range of prices (like 160.460).
- A high probability trade requires a good range, which should be at least 20-25 pips. A 10-pip range offers a very low probability of a good trade.
- When entering trades, you should only take trades when price is still near the zone. If price breaks a resistance and shoots straight up, the probability of it retracing for a retest increases, making an immediate trade low probability.
- Always wait for a proper confirmation near the zone, such as the break of a low of a bullish candle, confirming the price is starting to leave that area.
Dealing with Fakeouts: Fakeouts occur when the price breaks a zone but quickly returns into the range, trapping expecting traders. They normally happen after a long period of consolidation. While you cannot anticipate a fakeout, if the price fakes out and then closes back in the range (with enough range), you can consider a trade in the opposite direction. If the candle closes in the middle of the range, however, there is no trade to take.
3. Advanced Precision: Impulse Entries
Impulse entries are used to capitalize on rapid moves that you might otherwise miss. They can be psychologically challenging, so in the first months, it is essential to sit, relax, and observe how price action develops.
To enter these rapid moves, you look for specific candle confirmations:
- Exhaustion Candle: The ideal setup involves an exhaustion candle, defined as a candle that has wicks bigger than the body, forming on a resistance (for a bearish entry) or support (for a bullish entry).
- Volume Confluence: This must be coupled with volume.
- Direction: When these confluences are in place, the price normally goes in the opposite direction of the big wick, continuing the existing trend, which happens about 90% of the time.
When using impulse entries, price often temporarily moves against the trend, creating a wick, which allows the market to "breath and grab some liquidity" before making a larger move in the desired direction.
Risk Sizing: If a major wick has formed, indicating a high probability setup, you can use a regular lot size. If the wick is smaller, you should use a smaller lot size because the probability of success decreases.
4. Psychological Resilience: Second Chances
Trading requires mastering your mind and acting strictly based on learned rules, avoiding hope or trying. You must control your feelings and only take the best opportunities, seeking setups with way more than 50% probability.
One common mental hurdle is dealing with a losing trade. If you take a loss, but the price later starts moving in your original desired direction, you can consider giving the trade a second chance, provided you have enough confluences and are still within the daily risk percentage.
Crucially, do not change your bias after the loss. Attempting to immediately enter a trade in the opposite direction is a sign of emotions taking control, which is psychologically damaging and must be avoided. Stay concentrated and do not lose control of your actions.
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