How to Trade with Supremacy Strategy
Active involvement in trading operations is a double-edged sword. On the one hand, it provides you with numerous opportunities for gaining profits. Meanwhile, the more you trade, the higher the chances that you will lose money. In this regard, one of the most efficient means that experienced traders advice for novices is swimming against the flow by opening positions opposite to the prevailing tendencies and relying on the axiom that, after some time passes, the market always reverses going against the majority.
This model of trading is known as Supremacy Strategy. The main peculiarity of this strategy is that, to a significant extent, it relies on the acquaintance with other traders' positions rather than typical technical analysis instruments. Meanwhile, the only traditional trading instrument used in it is D charts, which eliminates the necessity to spend long hours staring at your trading terminal.
Let's discuss the peculiarities of the Supremacy strategy in more detail.
What is Supremacy?
Supremacy applies to most of the major currencies traded on Forex. Moreover, they are also suitable for operations involving the Japanese yen. Usually, with this strategy, you trade one time a day using D1. It is typical for a trader to address the chart approximately half an hour ahead of the session's end. The second time he or she does it should be the next day, after the opening of the subsequent session.
The essence of Supremacy trading is opening your positions contrary to those of most other traders. In other words, you need to identify the dominating trends within which the majority of other positions are being opened and bet on the opposite side. This strategy's conceptual basis is the thesis that if the volume of positions opened in one direction exceeds 60%, there are significant chances of the market reversal. Therefore, experienced traders have an opportunity to capitalize on this pattern.
Since the information about the prevailing tendencies is the essential part of Supremacy strategy, finding the relevant sources to take this knowledge from becomes a crucial task for traders. However, it's not a problem since this data is usually placed in open access, being provided by most brokerage platforms. You can easily define the leading tendencies by using fundamental and technical analysis.
There are a few aspects you need to keep in mind when applying the Supremacy strategy. First, it is better done with the involvement of several different currency pairs, which will mitigate your risks. Second, it is not applicable together with the Take Profits options. Therefore, you need to let your profits grow to their full potential before taking them. Third, due to the specificity of this strategy, you can only use it in the availability of distinctive prevailing tendencies mentioned above. In other cases, you will have to wait until the market conditions become more favorable to you.
Opening positions within Supremacy Strategy
As noted above, you should open your Supremacy-based position if you see a trend involving more than 60% of traders working in the same direction. Suppose that the majority of traders sell a particular currency pair. As soon as you identify this moment, it's time to get ready. First, set up your instruments to a daily chart. Then, open an acquiring position at the relevant price. Simultaneously, create a buying pending order at the lowest point of the day's last candlestick.
Next day, as soon as you see the closure of another candlestick, eradicate the pending order in case the price has not triggered it. Simultaneously, close the positions you opened priorly. Disregard the profits or losses from these intermediate operations. When trading by Supremacy, you need to track the immediate signals of the market, not wait for your positions to win in the long run.
In case if most traders buy a particular currency pair, the algorithm of your actions should be slightly different. You need to combine opening a trading position and create a Sell Limit command when the candlestick is at its top. Next day, do the same thing as mentioned in the previous paragraph and close all the positions.
Don't get involved in Supremacy trading if you're not ready to put yourself at the risk of having losses. It is not the model to immediately restore your lost profits. You need to wait for subsequent market signals you'll be able to interpret correctly to regain and multiply your earnings.
The essential rules of opening Supremacy positions
- Enter the game only if you identify a trade imbalance of approximately 60% or more. Of course, you can always risk and try to use Supremacy if the imbalance is lower as well. However, the smaller it is, the higher the risk that the market won't reverse such an imbalance and vice versa.
- Wait for the closing time of the next trading day's candlestick to open your position. Creating a pending order at this time is an essential element of Supremacy strategy.
- When you open your first position based on market imbalance, disregard the price movements.
- Open selling positions at the highest point of the candlestick. Open buying position at the lowest point.
Stop Loss in Supremacy trading
As we have already mentioned in one of the previous paragraphs, if you want your Supremacy strategy to be effective, you cannot use the Take Profit option. Meanwhile, it is crucial to apply Stop Loss to your operations. This command plays the leading role in controlling your risks. Since Supremacy does not require you to monitor the situation constantly, you may easily lose your capital due to severe shifts in market dynamics without using the SL option.
In terms of this strategy, it is most advisable for you to place this command at approximately 100 points from your entry. If your pending order is placed at the trading day's top or bottom end, limit your Stop Loss to 50 points.
Additional recommendations
Aside from the things listed above, there are several extra points and principles which you should keep in mind when using Supremacy trading. One of them is having a stable strategy for managing your money and retaining from going beyond additional risks. In this regard, another valid point is that you can withdraw some parts of the sums on a monthly basis. In such a way, you will secure your profits.
One more essential tip for Supremacy trading is monitoring the latest news that may affect market trends. This procedure itself is an integral part of fundamental analysis. At the same time, if you want to use the Supremacy strategy, it becomes even more relevant, allowing you to predict market trends' movement in a certain direction and open a position before this moment comes to increase your chances of success.
Also, using the Supremacy strategy, you can modify it if you are confident in your knowledge and competence. One of the popular modifications of this model involves doubling the position each time the previous one loses. However, you need to remember that this model is suitable for experienced traders who have enough resources so that the associated losses do not cause them significant harm.
Final words
As a trading strategy, Supremacy has numerous benefits, one of which is its easiness and straightforwardness. These traits make the model under discussion understandable and capable of being mastered even by newcomers. The strategy has little to no reliance on graphs and complicated analytical tools while mainly focusing on market players' behavior. Besides, it does not require the traders to spend hours over the scrupulous monitoring of their terminals. On the contrary, they can look at the charts once or twice a day to identify the imbalance and still be able to implement this strategy effectively. With the consideration of all the features discussed above, Supremacy combines understandable prerequisites with high distinctiveness, due to which it is impossible to overlook it.
