Profitable Trading Strategy Step-by-Step
This guide walks you through one complete trading workflow that you can follow from start to finish.
It's not a universal method, but a concrete example of how TradingView indicators can be applied in practice to work toward profitability and consistency.
You can use this workflow on any asset available on TradingView—forex, stocks, or cryptocurrencies.
By the end, you'll understand:
- How to build a repeatable process that works for you
- Why your wins are the result of skill and discipline, not luck
- Why your losses happen and how to learn from them
Why Trading Is Worth It
Trading has the potential to be life-changing—with the right knowledge, discipline, and risk management.
For some, it's an additional income stream; for others, it becomes a replacement for a full-time job.
Real success stories shared in our Discord community include:
- A trader covered the cost of a new business van in just one week.
- Another earned the monthly salary of an IT manager from a single trade.
- Another is covering living expenses for their entire family through consistent trading profits.
These results don't come from luck, but from discipline and persistence—and they can absolutely be learned.
Success takes time—but with consistency, progress compounds into freedom.
Join the Community
All of the profit examples below come directly from our Discord community.
👉 Join here to learn, share, and grow together.








These examples show what can be achieved, not what will happen for everyone.
Your journey will depend on your risk management, psychology, and ability to learn from both wins and losses.
But don't worry, we will cover all aspects in this guide.
How to Use This Guide
If you already have a strategy that works for you, we strongly recommend that you do not abandon or replace it.
Instead, treat this guide as an educational resource or an additional perspective that may help refine your existing approach.
This document is designed to be read from top to bottom.
Do not skip sections, even if you think you already understand them.
If something feels unclear, read the entire guide through once, then come back and read it again.
Repeat this process as needed, giving yourself breaks in between (even a full day) to let the knowledge sink in.
Trading is not learned in a single sitting.
Approach this guide with patience—the more times you revisit it, the deeper your understanding will become.
This is a practical guide. If you're looking for shortcuts or “buy/sell” signals, you won't find them here.
What you'll gain is a structured process and a trading skill that will stay with you for life.
Table of Contents
- Risk Management
- Manage Your Expectations
- Trading Prerequisites
- Core Trading Principles
- LTF Day Trading / Scalping Strategy
- Conclusion
- Cheat Sheet
- Disclaimer
Trading involves risk. This guide is educational only—not financial advice.
See the full disclaimer at the end of this page.
Risk Management
Before we dive into technical setups, it's essential to understand risk management.
Risk management is the practice of protecting your trading capital and ensuring that one bad trade (or even a series of bad trades) does not wipe out your account.
What Risk Management Is:
- Controlling the size of your positions relative to your account balance
- Using stop-loss orders to limit potential losses
- Managing leverage intelligently so that a single trade doesn't put your entire account at risk
- Ensuring you only trade with money you can afford to lose without financial or emotional harm
What Risk Management Is Not:
- A guarantee of profits
- A way to eliminate all risk
- Something optional that only beginners need
- Blindly following “1% rule” or other formulas without understanding your own risk tolerance
Why Risk Management Is Necessary
Even the best trading setups fail. Markets can gap, news can hit unexpectedly, and indicators can give false signals.
Without risk management, a single trade could erase weeks or months of gains—or worse, wipe your account entirely.
By managing risk, you are not trying to avoid losses. Losses are a normal part of trading.
Instead, you are making sure that losses are small and survivable, while wins have the potential to grow your account.
Example: Full Margin Trading
Imagine a trader who decides to use their full account balance with high leverage on a single trade.
This approach can be viewed in two ways:
- Bad (most of the time): If the trader does not understand the risk, one wrong move could liquidate the account instantly. This is usually reckless and unsustainable.
- Potentially Valid (but not recommended): If the trader does understand the risk and has other accounts or backup capital, then losing that single account may fit into their broader strategy.
For example, someone could operate 10 accounts, each treated as a separate risk bucket. Even if one account is lost, the others remain intact.
This is not good risk management in the traditional sense, but it highlights an important truth:
Risk management is about making conscious, informed decisions, not blindly following one set of rules.
Position Sizing and Leverage
Leverage is often misunderstood. It is not inherently dangerous—it depends on how it is used.
For example:
- A trader with a $100 account could use 1x leverage and place a single $100 position.
- Alternatively, they could use 20x leverage, but commit only $2 of their own margin per position, opening 3-4 positions.
- If paired with well-placed stop losses, the second approach can actually be less risky, because only a fraction of the account balance is tied to each trade.
The key is not the leverage number itself, but how position size, margin allocation, and stop-loss placement work together.
Example of Good Risk Management Using a Leverage
A trader has a $1,000 account:
- They risk 1% per trade → maximum $10 loss if stopped out.
- They use 10x leverage, but only put $100 margin into a $1,000 position.
- Their stop-loss is placed logically (above/below a range boundary).
- If the stop is hit, they lose $10, not the whole account.
This is how leverage becomes a tool: used carefully, it allows flexibility without exposing the entire balance.
The trader can lose 10 trades in a row and still have 90% of the account left.
Common Myths About Risk Management
-
“Leverage is always bad.”
→ Wrong. Leverage magnifies both gains and losses. Used responsibly with small position sizes, it can actually help manage margin efficiently. -
“Stop-losses are optional.”
→ Wrong. Not having a stop-loss is essentially gambling that the market will reverse in your favor. Even professional traders always define exit levels. -
“Risk management limits profits.”
→ Wrong. Proper risk management may reduce the size of individual wins, but it enables you to survive long enough to realize consistent gains over time. -
“I can recover from any loss if I double down.”
→ Dangerous myth. This is the classic “martingale” trap. If you keep increasing position size after losses, eventually one streak will blow up your account.
Irrational Markets vs. Your Solvency
There is an old saying in trading:
“The market can stay irrational longer than you can stay solvent.”
This means that:
- Just because a move looks “too high” or “too low” doesn't mean it has to reverse right now
- You can be 100% correct in your analysis, but if your position is oversized or unprotected, the market can wipe you out before the move happens
- Logic and fundamentals do not protect you against liquidation
This is exactly why risk management exists:
You don't need to predict the exact moment of reversal—you just need to survive long enough for probabilities to play out in your favor.
Key Takeaways
- Always know your maximum risk per trade (commonly 1-2% of account balance for most traders, but entirely up to you if you accept the risk).
- Always use a stop-loss—even if it is a “mental stop,” it must be defined in advance.
- Use leverage as a tool, not a weapon against yourself.
- Only trade with money you can afford to lose.
- Surviving is more important than winning big. The goal is longevity and consistency.
- Never assume the market must turn just because it looks irrational.
⚖️ Final Note: There are many different risk profiles. Some traders take large risks intentionally as part of a broader plan. What matters most is that you understand your own risk, size positions consciously, and never risk money that would harm you if lost.
Manage Your Expectations
One of the most important truths in trading is this: nobody has a 100% win rate.
Even with a profitable strategy, you will face losses. This is not a sign of a bad system, nor does it mean you are doing something wrong. It is simply how markets work.
Losses Are Part of the Game
- Sometimes you will take a textbook-perfect entry with divergence, confluence, and a well-placed stop-loss—and it will still end in a loss.
- News events, sudden liquidity grabs, or random volatility can and will stop you out.
- No indicator, no trader, no algorithm can eliminate losing trades completely.
What Really Matters
The key is not to avoid losses, but to manage them and think in probabilities:
- With proper risk management, a single loss is just a small scratch, not a fatal blow.
- A profitable strategy does not win every trade—it produces long-term positive expectancy.
- Over dozens or hundreds of trades, your edge is what makes you profitable, not any single position.
Think Like a Casino
Casinos don't win because they win every spin of the roulette wheel.
They win because the odds are slightly in their favor—and over time, those odds always play out.
Trading works the same way.
Your goal is not to avoid red numbers on your PnL, but to consistently apply your edge so that, in the long run, your account grows.
Psychology: The Hidden Enemy
Human psychology often works against you in trading:
- Losing a trade feels much worse than winning one feels good
- This imbalance makes you want to “make it back” immediately, leading to revenge trades and poor decisions
So what can you do?
- Treat every new trade as an independent event. The outcome of your last trade should not affect your next one.
- Never try to “chase losses” or force the market to give back what it took.
- If a loss hits harder than it should, take a step back. Sometimes the best trade you can make is to not trade at all for the rest of the day.
Reset and Recharge
Every trader needs a way to reset mentally. For some, that means:
- Taking a walk outside
- Watching an educational video or stream
- Spending time with friends or family
- Hitting the gym
Find what works for you. The goal is to clear your head so you can return to the charts with a calm and focused mindset.
👉 Staring at the chart 24/7 will not make you a better trader—it will only exhaust you and lead to mistakes.
Additional Mindset Principles
-
Trading is not like a regular job.
You can't just “show up” at any convenient time and expect opportunities.
The market doesn't adapt to your schedule—you must adapt to the market's. -
Sometimes trading means waiting.
The right setup may appear during the Asian session, in the middle of the night, or only once every few days.
Patience is part of the process.To minimize wasted screen time, set alerts on your chart:
- Price levels
- Trendlines
- Indicator signals
- Crossings of important levels
This way the market will call you when something important happens.
The more hours you spend staring at charts, the less clearly you see.
Stay sharp, and don't waste energy watching nothing happen. -
No trade is better than a bad trade.
Forcing yourself to trade every day or to hit a fixed profit target will push you into low-quality setups and poor decisions. -
Opportunities are infinite.
Missing a move does not matter—there will always be another one.
In fact, FOMO (fear of missing out) is often a reverse indicator: when you feel it strongly, it usually means it's time to step away. -
Trade what you see, not what you want to see.
Never “front-run” a setup.
If you think a divergence might form or price might break a level, do not enter yet.
Wait for confirmation. Acting early is gambling, not trading.
Losses do not mean you are failing.
What matters is consistency, discipline, and the ability to stick to your plan even after setbacks.
Your job is to control your psychology, reset when needed, and approach every trade fresh.
Consistency and discipline—not perfection—are what make traders profitable in the long run.
Trading Prerequisites
Before you begin following this strategy, there are a few things you'll need in place.
These are not “nice-to-haves”—they are essential for building the right environment and mindset for trading success.
For a more general introduction to ZenAlgo and the platform itself, please see our
Getting Started Guide.
1. Community Support (Absolute Must)
Trading can be a lonely activity, but it doesn't have to be.
Our ZenAlgo Discord is the heart of our community, where traders:
- Share their journey (wins, losses, lessons)
- Discuss trading setups and strategies
- Offer personal support, motivation, and encouragement
Humans are social creatures, and trading becomes much easier (and healthier) when you're surrounded by like-minded individuals.
Don't trade alone—join the community and grow together.
2. Charting Platform
You will need a TradingView account to access charts, indicators, and alerts. Free account can get your started, Plus or Premium TradingView plan is optimal.
👉 You can sign up here: TradingView Pricing
The strategy described in this guide relies on ZenAlgo's custom indicators. As you progress, you'll naturally discover which tools are required. We recommend at least our Gold or Platinum plan. For now, just make sure you have a functional TradingView account.
3. Trading Account (Exchange or Broker)
Finally, you'll need a place to execute trades.
The right choice depends on the market you want to trade:
-
Crypto Exchanges (spot or derivatives):
Popular options include Binance, Coinbase, Hyperliquid, MEXC, and Kraken. -
Forex Brokers:
Established names include OANDA, IG, and FOREX.com. -
Stock Brokers:
Well-known platforms include Interactive Brokers, E*TRADE, and Robinhood.
Choose a provider that fits your region, regulatory requirements, and personal preference.
Always make sure your broker or exchange is reputable and secure.
Quick Recap
- ✅ Join the Discord community
- ✅ Create a TradingView account
- ✅ Open a trading account with a reliable crypto exchange or forex broker
Once you have these three pillars—community, charts, and an exchange—you're ready to move on to the strategy itself.
Core Trading Principles
Before diving into the actual strategy, you need to understand several core principles that form the foundation of trading with ZenAlgo indicators.
These are not optional tips—they are rules of thumb and insights that will help you interpret the market correctly.
Heikin Ashi Candles
Our indicators work best with Heikin Ashi (HA) candles.
The reason is simple: HA candles automatically smooth out market noise, making it easier to:
- Identify the dominant trend
- Spot clear reversals
- Filter out random price spikes
While Heikin Ashi does have limitations (e.g., exact highs and lows are less precise), the benefits far outweigh the drawbacks when used for strategy execution.
👉 For a deeper dive into pros and cons, see our full guide: Heikin Ashi Candles
Always switch your charts to Heikin Ashi when trading with ZenAlgo indicators. Make sure this setting is applied in every new layout.
PVSRA Vector Candles
You will also notice vector candles on the chart. These are candles that appear when volume is multiples higher than the surrounding candles.
- Such candles are often highlighted in color
- They typically break through important levels (support, resistance, or ZenAlgo indicator levels)
- When this happens, we say that the chart has “passed the level with a vector”
Empirically, vector candles often mark shifts in momentum or confirm that a trend continuation is valid.
They provide a valuable confluence signal when you are watching for a specific setup to play out.
Following chart clearly illustrate this concept with ZenAlgo - Avenger indicator.
Avoid Trading During Major News
One of the most overlooked rules: do not trade during major news releases.
Why? Because news events often cause unpredictable spikes:
- Traders are psychologically biased toward long positions (most people prefer betting on growth)
- Market makers know this and will frequently push the market down during news, often with a fake breakout to trap both longs and shorts
- The result? Nobody wins—except the market maker
How to Stay Informed
You don't need to guess when news is coming—there are reliable tools to keep you updated:
- TradingView Economic Calendar - available directly inside TradingView
- Forex Factory Calendar - a popular source for major economic events
- Investing.com Economic Calendar - another widely used alternative
In our Discord community, members also frequently share upcoming news events and discuss their potential impact, so you'll rarely miss an important release if you stay active there.
When news is coming, step away. Use that time to study charts, review streams, or simply take a break.
Don't Long at All-Time Highs (ATH)
When the market hits an All-Time High, the temptation is strong to chase the breakout.
This usually ends badly. After ATH, markets tend to retest lower levels.
A simple trick:
- In TradingView, press Alt + I to invert the chart.
- Ask yourself: Would I long this inverted chart right now?
- Most traders would say yes—because it looks like the bottom is in.
- And that's exactly the problem: if it looks like a bottom on the inverted chart, it means it's actually an ATH on the real chart.
Chasing it as a long entry is usually a trap.
This does not automatically mean you should short ATHs either. Shorts should only be taken if other confluences (such as divergences) confirm the setup.
Important Context: Trading vs. Investing
This rule applies specifically to short- and mid-term trading.
If you are a long-term investor buying ETFs or stocks for many years (e.g., passive index investing), then buying at ATH is often perfectly fine.
- Historically, stock indices like the S&P 500 have continued to make new highs over time
- For long-term investors with multi-year horizons, buying at ATH has consistently been profitable, as markets tend to grow over decades
- The difference is that traders look for short-term setups with risk/reward optimization, while investors rely on compounding growth
If you are here to learn trading, follow the ATH rule above. If you are investing long-term, don't worry—ATH entries can still work in your favor.
Stick to Your Stop-Loss (SL) and Take-Profit (TP)
One of the most common mistakes traders make is moving their stop-loss or target mid-trade.
- Price gets close to your SL → you move it lower, hoping for a reversal → the trade keeps going against you → suddenly you're sitting on a much bigger loss.
- Price gets close to your TP → you move it higher, hoping for “just a bit more” → the market reverses → your profit evaporates.
In both cases, the result is the same:
- ❌ Poor risk management
- ❌ Emotional decision-making
- ❌ Regret and confusion
Fixed vs. Dynamic Exits
- If you set your SL and TP based on the strategy in advance, leave them there. Do not adjust them just because the market “looks scary” or “looks promising.”
- If you are using a dynamic exit based on an indicator, then stick to what the indicator tells you. Let the system, not your emotions, decide.
When You Can Exit Early
Exiting early is not the same as moving your levels.
There are legitimate reasons to cut a trade short:
- Market conditions have changed (setup invalidated)
- You've been in the trade too long and the coin isn't moving as expected
- Major news events are approaching and you don't want exposure
The rule is simple:
- 👉 You may exit earlier if conditions demand it.
- ❌ You should never push your SL further away or your TP higher just to “hope for more.”
Why This Matters
Your SL and TP should always be based on a clear reason:
- A technical level
- A divergence
- A trend confirmation
If you cannot explain why you set them where you did, then the trade should not have been opened in the first place.
Changing them mid-trade means your reason has changed too—and that usually means you're no longer trading your system, you're trading your emotions.
Define your SL and TP before entering a trade, and then execute with discipline.
You may exit early if the market gives you valid reasons, but never move your SL or TP further away.
If your plan was solid, you don't need to interfere. If your plan wasn't solid, the mistake was opening the trade in the first place.