Choose a Clean Setup: One Demo Plan

Risk warning: One setup still loses often and this is a demo exercise, not financial advice or a trading signal.

Your one setup is this: H1 trend, pullback to a marked area, M15 candle confirmation, and a stop beyond the zone. Practise only this on demo.

Parts 2 through 6 gave you separate filters. Direction tells you the side. Areas tell you where to wait. Pullback rules and candle proof tell you when. Break filters tell you what to reject. This lesson bolts them into a single plan from the five-point process.

Why one setup wins

Beginners collect setups like football jerseys. One for trends, one for ranges, one from a signal group. Each loss triggers a new purchase.

One setup ends the shopping. Every chart gets the same four questions in the same order. Every log entry looks the same. After twenty examples, patterns in your own mistakes appear.

Think of a food vendor with one pepper soup recipe. She tastes the same soup daily, so she notices one extra pinch of salt at once. Ten recipes would hide every error.

Read Entry and Exit Rules: Knowing When to Click before you personalise anything.

The four-piece setup

All four pieces must agree. Three out of four is a skip.

• H1 trend. Label up, down, or wait as in Part 2. Only up or down continues. A wait label ends the check in seconds.
• Pullback to area. Price returns to your marked support in an uptrend, or resistance in a downtrend. Price sitting mid-chart means no setup, however pretty the candles.
• M15 confirmation. A wick into the zone plus a strong M15 close back on your side, as in Part 5. No close means no plan.
• Stop beyond zone. The stop hides past the zone with room for normal wicks. If that distance breaks your 1% risk, the setup is too dear. Skip it.

Invalidation is built in. A full H1 close beyond the zone kills the idea, win or loss. You do not rescue it.

Walk it on EUR/USD

Tuesday, London and New York overlap, around 1pm–5pm WAT. EUR/USD on H1 shows higher highs and higher lows. Label: up.

You marked support at a zone with two clear bounces last week. Price now slides back toward it. You do nothing yet. Pullbacks deserve patience, not predictions.

Drop to M15. Price enters the zone and prints a long lower wick. The candle closes back above support with a firm body. Confirmation exists.

Write the plan before anything else. Entry above the M15 close. Stop below the zone. Target before the next resistance. Risk near 1%: on $10, about $0.10.

Then check room. If the next resistance sits too close, the target pays little for the risk. Skip and close the laptop. Waiting counts as practising the setup.

Skip checklist

Run this veto list on every candidate. One yes means no setup.

1. No trend? — H1 label reads wait. Stop here.
2. No area? — price floats between zones. Stop here.
3. No close? — wick only, candle still open. Stop here.
4. Late entry? — price already ran far past the zone. Stop here.
5. Big news near? — major release within the hour. Stop here.
6. Stop too wide? — distance breaks your 1% risk. Stop here.

Six ways to say no, one narrow way to say yes. That ratio keeps small accounts alive.

Common mistakes

Adding a second setup

This one feels slow, so you borrow a reversal trick for excitement. Now losses have two authors and neither learns. One setup for the full twenty logs.

Trading both directions

Taking support longs and resistance shorts in the same week doubles decisions and halves learning. Practise the trend side only. Ranges and counter-trend entries can wait for later lessons.

Shrinking the stop

The zone stop looks wide, so you tuck it inside the zone for comfort. Normal wicks now hunt it daily. Size the position to the stop, never the stop to your feelings.

Grading after three trades

Two wins mean nothing. Three losses mean nothing. Twenty logged examples with screenshots mean the start of evidence. Read Backtesting: Testing Your Plan on Past Charts.

Your practice task

Use replay mode or a demo chart. Do not fund an account for this exercise.

1. Write the rules — copy the four pieces onto one card or note.
2. Find ten candidates — mark trend, area, close, and stop for each.
3. Apply vetoes — run the six-question skip list on every one.
4. Log twenty examples — screenshot each plan before the next candle.
5. Grade rule-following — score yourself on obedience, not on profit.

On demo with $10, the goal is twenty obedient logs. Profit on demo pays nothing. Obedience on demo pays future discipline.

Read How to Use a Demo Account Before Risking Real Money and The Trading Journal.

Next in series

You own one setup. Next you price it exactly: where entry sits, where the stop hides, and where the target waits.

Continue with Part 8 — Plan Entry and Exit. It turns today's four pieces into three written prices.

Bottom line: Practise one four-piece setup on demo twenty times: H1 trend, pullback to area, M15 close, stop beyond zone. Switching rules early teaches nothing, so log obedience instead of chasing profit.

Part 7 of the KoboFX Price Action Series. Previous: Part 6 — Real or False Break. Cross-links: Entry and Exit Rules, Stop Loss, The 1% Rule.