1
STEP
TRADING
PROTOCOL
BY JOKERSZN
A FRAMEWORK FOR
DISCRETIONARY TRADING
4-STEP TRADING PROTOCOL
by J O K E R S Z N
2
Preface
First and foremost, it is important
to know that no trading system
or protocol alone will make you a
profitable trader unless you invest the
time and effort required to succeed
in the challenging world of trading.
Ultimately, you are the one responsible
for making the trading decisions,
managing risk, and handling your own
emotions.
When working through this protocol,
follow the steps in the proper order. If
you work through it diligently, you will
find that you will not need anything
else on the technical side of trading.
This is not just a single model; once
you have completed the protocol
and reviewed the video material, you
will have all the tools necessary to
interpret price movements. This model
and the concepts used are particularly
effective for day trading or intrasession trading.
All the price-based concepts can be
applied to different timeframes, as
these principles are fractal. Keep in
mind that the time-based aspects
may vary. And yes, this protocol also
works for other markets besides FX,
obviously trading sessions must be
adapted, but everything else will work
in the same way. All times mentioned in
this course are New York local time.
4-STEP TRADING PROTOCOL
by J O K E R S Z N
Do not let the amount of information
overwhelm you. Give yourself enough
time to become comfortable with
the material. It is crucial to journal
your emotions, to backtest, and,
most importantly, live test the entire
protocol. Pay close attention to your
emotional state before, during, and
after a trade. Journal every setup you
take, especially the losing ones. Every
losing trade offers valuable insights
into your trading flaws, which can help
you become a better trader, step by
step, trade by trade.
I recommend journaling every aspect
of the protocol and your thought
process. Over time, you will have lots of
data regarding the trades taken. Your
objective is to identify patterns within
both your winning and losing trades.
Eliminate the patterns that lead to
losses and capitalize on those that
result in wins. It is a cycle of planning,
executing, evaluating, and repeating the path to improvement.
You must become your own mentor,
which necessitates self-awareness
of your behavior and the ability to
correct self-sabotaging patterns in
your trading. Without accountability
and objectivity, success in trading will
be impossible.
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Table of
Contents
1.
Introduction.........................................................................................................4
2.
Step 1: Market Conditions...............................................................................5
2.1
Time-Based Conditions:..............................................................................6
2.2
Price-Based Conditions:.............................................................................8
3.
Step 2: Liquidity (Bias).................................................................................... 11
3. 1
Time-Based Liquidity:................................................................................. 11
3.2
Price-Based Liquidity:................................................................................ 13
4.
Step 3: Narrative.............................................................................................. 15
4.1
Price-Based Narrative................................................................................ 15
4.2
Time-Based Narrative............................................................................... 18
4.3
Inversion level or P/D arrays as HTF POI..............................................22
5.
Step 4: LTF Intermarket Confirmation...................................................... 24
5.1
Entry and Intermarket Confirmation................................................... 24
5.2
The Entry Confirmation..............................................................................27
5.3
Order of Entries ............................................................................................ 31
6.
Standard Deviations...................................................................................... 34
7.
Position Management....................................................................................36
8.
Pyramiding Management.............................................................................37
9.
Journaling.......................................................................................................... 38
10.
How To Pass Prop Firm Challenges - My Approach............................39
11.
Abbreviations................................................................................................... 42
4-STEP TRADING PROTOCOL
by J O K E R S Z N
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Introduction
Before considering participation in
the marketplace, it is crucial to start
by assessing the current trading
conditions. The market environment
forms the fundamental framework
upon which the success of any trade
idea relies. Therefore, Step 1 of the
protocol covers all low-probability
market conditions that must be
avoided.
Once the market conditions align with
our criteria, we can proceed to Step 2,
which involves determining the most
likely draw on liquidity (DOL). Without
a clear DOL, we cannot proceed with
the protocol.
Upon identifying a distinct DOL, we
move forward to Step 3 of the protocol,
which involves creating a narrative.
While bias merely indicates the price
direction, the narrative provides insight
into how the price is likely to move from
its current levels to our identified DOL.
P/D arrays serve as a tool to frame
this narrative, but only when they are
aligned with our bias, also known as
the DOL, and we are trading under the
right market conditions. Only once all
criteria of the preceding steps have
been met, we move on to Step 4, the
lower timeframe entries.
4-STEP TRADING PROTOCOL
by J O K E R S Z N
To execute the protocol effectively,
it should be evident that each step’s
criteria must be met. Skipping or
ignoring any step puts you at a
disadvantage. Trading operates
on a “if... then...” basis, much like
the protocol itself. It is crucial to
emphasize that the primary focus
should always be on the first two
steps of the protocol. Do not overlook
Step 1, which involves assessing the
trading conditions. Many unprofitable
traders make the mistake of entering
the market without considering the
prevailing trading conditions. There
is no point in searching for a trading
setup if the necessary conditions are
not met.
Professional
trading goes
beyond simply
identifying
chart patterns.
STEP 1
5
Market
Conditions
There are three distinct price delivery profiles in which markets are
always trading:
Consolidation Profile:
01.
02.
03.
Price is either seeking and destroying existing liquidity
or building up liquidity on both the buy and sellside.
Expansion Profile:
The market experiences increased price volatility and
expansions towards the DOL.
Retracement/Reversal Profile:
Price retraces or reverses its prior trend.
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The key to identifying high-probability
trading conditions primarily lies
in avoiding consolidation profiles.
Therefore, the ability to anticipate
consolidation profiles becomes
crucial. It is important to know
that expansions are followed by
consolidation phases, and conversely,
consolidations are prerequisites for
subsequent expansions. However,
price never goes from a consolidation
into a retracement or reversal. This
understanding allows you to set
expectations in price delivery profiles
by analyzing the price action of
the past and forecasting the most
likely profile for an upcoming trading
session or day. The goal should be to
engage in trading during expansion
or retracement profiles, making the
anticipation of the prevailing price
action profile a crucial element in
positioning oneself for success before
entering any trade.
By analyzing both the economic
calendar and the price chart itself,
use the following points of time- and
price-based trading conditions to
ascertain high-probability trading
days and sessions.
Time-Based
Conditions:
 Red Folder News Event
Approaching:
Wait for the news to be released
and then look for potential setups.
Alternatively, position yourself ahead
of the news release, using it as a
catalyst for volatility that expands
prices into the anticipated liquidity
pool (preferably when the setup
aligns with a higher time frame
entry).
 Multiple Medium/HighImpact News Events in
a Single Session:
When there are multiple news events
at different times within a single
session, the complexity arises from
discerning the specific role of each
news event. News events are either
used for market manipulation or to
expand prices towards the DOL.
þ When are news likely going to
be a manipulation?
If there is a consolidation
(accumulation) ahead of the news
release, and price is breaking
out of the range against the HTF
orderflow, this move will often be
a manipulation to then expand
price (distribution) into the
direction of orderflow.
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 Day before NFP, FOMC, or CPI:
The day before these major economic events tend to be a low-probability trading
day in general.
 Trading on NFP, FOMC, and CPI Days:
It is generally better to avoid trading ahead of Non-Farm Payroll (NFP), Federal
Open Market Committee (FOMC), and Consumer Price Index (CPI) news days.
þ NFP and FOMC events typically unfold in two stages, with the initial move
often being a market manipulation. Subsequently, the true expansion
phase is typically initiated.
þ On the other hand, CPI (Consumer Price Index) events often result in onesided price expansions, where the market predominantly moves in a single
direction.
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 Last or First Day of a New Month:
These days can exhibit unique characteristics due to the opening or closing of a
monthly candle, exercise caution, or apply specific setups based on the situation.
 Mondays:
Mondays are generally considered lower probability trading days unless they align
with an HTF Draw on Liquidity (DOL) or if the previous week left behind an LRLR (Low
Resistance Liquidity Run) in the direction of the HTF orderflow. During NFP week,
Monday can be traded as well.
Price-Based Conditions:
 Previous Session or Day’s Overextension:
When price significantly overextends in the prior session, consider avoiding the
following session. If price exhibits substantial overextension the day before, consider
skipping at least the subsequent London session.
 An HTF Objective has Been Met:
Once the market reaches an HTF liquidity pool, such as an old high or low, expect a
consolidation profile before a potential continuation of the existing order flow or a
retracement/reversal.
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 The ‘3-Daily Candle Rule’:
If three consecutive daily candles have closed in the same direction, avoid trades in
the same direction on the fourth day. Use the previous three daily candles to set your
expectations for the most likely upcoming daily price action market profile. Keep in
mind that consolidation precedes expansion and vice versa.
 Price Trapped Between Two Opposing P/D Arrays:
When price remains within a range between a bullish and bearish P/D array, wait for
price to displace out of this range and to disrespect either the bullish or bearish P/D
array, to then it being formed to an inversion P/D array.
4-STEP TRADING PROTOCOL
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 Price in the Middle of an HTF Range:
When price trades near the midpoint of an HTF range, the 0.5 level, it is common to
observe consolidations due to the transition from discount to premium and vice versa.
 Decoupled Assets:
If correlated assets are not trading in sync, such as EURUSD showing bullish movement
while GBPUSD is bearish, or when EURUSD/GBPUSD and DXY (Dollar Index) are all
trading in the same direction. This often precedes an HTF shift in orderflow or hints at
ongoing market manipulation. In such situations, it is best to wait for the correlation
between these assets to be re-established before resuming trading activities.
4-STEP TRADING PROTOCOL
by J O K E R S Z N
STEP 2
11
Liquidity
(Bias)
The most significant liquidity pools are beneath previous price lows,
above prior highs, and at points of inefficiency in price delivery (FVGs).
The fundamental concept of price movement revolves around trading
from one liquidity pool to another. The only P/D arrays to consider,
when framing a bias, are old highs/lows and FVGs.
Always question whether a high/low is being used to engineer or take
liquidity (aka creating a weak or strong high).
Time-Based Liquidity:
þ Daily/Weekly/Monthly Highs/Lows
þ Highs/Lows from the previous trading session
þ The last three daily candles to determine the most probable daily
profile (expansion, consolidation, or retracement day)
þ After an expansion day, anticipate either a retracement or
consolidation day
þ Following consolidation or retracement days, an expansion
day is more likely
4-STEP TRADING PROTOCOL
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þ If the past three daily
candles formed a swing
low at an HTF P/D
array or after taking
out an old low, expect
the fourth day to be a
bullish expansion profile
þ If the past three daily
candles formed a swing
high at an HTF P/D
array or after taking
out an old high, expect
the fourth day to be
a bearish expansion
profile
 All swing highs/lows within the last 60 trading days
should be considered for the HTF bias
Use the economic calendar and analyze the distribution of high-impact news events
throughout the week to determine the most likely weekly profile. Once you have the
assumption about the most probable weekly profile, you can break down the weekly
candle into individual daily profiles, aligning them with the weekly profile bias. It is
essential to remain dynamic in your approach, validating and potentially adjusting
the weekly profile assumption with each daily candle’s closure. This adaptability
allows you to fine-tune your bias based on evolving market conditions throughout
the week.
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Price-Based Liquidity:
 Highs/Lows that have not taken LQ (weak Highs/Lows)
 Internal LQ → External LQ &
þ Once price takes out internal LQ (FVG’s) within the dealing range, it is likely
going to expand toward an external DOL (old Highs/Lows)
 External LQ → Internal LQ
þ Once price takes out external LQ (old Highs/Lows), we are likely trading
towards internal LQ (FVG’s within the dealing range)
4-STEP TRADING PROTOCOL
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 Highs/Lows close to imbalances (FVGs)
 Pay attention to CME (Chicago Mercantile Exchange)
futures opening gaps on daily and weekly charts
þ If for example, euro futures are drawn to a gap, this will also impact price
movements on the EURUSD trading pair
 Combine both time and price-based highs and lows to
identify a high-probability DOL.
Always consider the daily orderflow and determine if the
market is currently in an HTF Market Maker Model (MMXM).
Only taking trades when your daily bias is aligned with
the daily orderflow and HTF DOL sets the stage for finding
high-probability setups.
4-STEP TRADING PROTOCOL
by J O K E R S Z N
STEP 3
Narrative
Once the bias has been determined, the next step is to
create a narrative that outlines the most likely scenario for
how price will trade from current levels to the DOL. It is crucial
to note that without a clear DOL, there is no basis for framing
a narrative. In essence, a bias is a prerequisite for developing
a narrative. If there is no bias, there is no narrative.
Markets will always move in either an MMXM or AMD from one price level
to the other. By applying the context of time via session and daily profiles,
you can anticipate the timing of transitions between the different stages
of an MMXM or AMD model. Therefore, always try to combine an MMXM or
AMD with a session profile (for intra-session trades) or a daily profile (for
day trades).
By using the economic calendar in combination with HTF P/D arrays, you
can frame the most likely weekly or daily profile. Remember, news are
either used to manipulate price into an HTF P/D array, or to expand price
towards the DOL.
Price-Based Narrative
 Market Maker Buy/Sell Model (MMXM)
þ In an MMXM you want to align P/D arrays formed on both sides of
the curve
þ In a MMSM old areas of accumulation on the buyside become
areas of distribution on the sellside
þ Old bullish P/D arrays turn into inverted bearish P/D arrays
4-STEP TRADING PROTOCOL
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þ In an MMBM old areas of distribution on the sellside become areas of
accumulation on the buyside
þ Old bearish P/D arrays turn into inverted bullish P/D arrays
þ SMTs often form at HTF levels during a killzone when transitioning from the sellto buyside or buy- to sellside
þ SMTs are not used to base trade ideas off, they are only a confluence or
additional confirmation
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 Accumulation → Manipulation → Distribution (AMD)
þ The manipulation move should always happen against the direction of your
bias, else the logic is invalidated
þ The manipulation ideally happens at the LO/NY session open into an HTF POI
and takes LQ
þ When price returns back into the range, you do not want to see price retrace
back into the area where the manipulation occurred (especially when the
reversal back into the range has left behind a BPR inside the manipulation
phase)
þ If you anticipate an AMD after price breaks out of the accumulation phase,
ensure the manipulation happens against orderflow. If the manipulation move
is happening in the direction of orderflow, it is less likely to be a manipulation,
but already an expansion.
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Time-Based Narrative
 Session Profiles
þ By looking at the previous session and its price action, the profile of the
following session can be anticipated. Consolidating sessions are likely followed
by an expansion profile session and the other way around. If we have a
manipulation in one session, expect little to no manipulation in the following
session.
þ LO reversal → manipulation against the direction of the daily bias at LO
open
þ This profile is very likely on a classic sell- or buy-day, where the Asia session
has been consolidating (again think of AMD (Asia session = accumulation,
LO session = manipulation, NY session = distribution) close to an HTF POI to
build up counterparty liquidity for the LO open manipulation to then initiate
a reversal
þ The session high or low will most likely form around 3 am, entries close to or
after 3 am are optimal
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 LO continuation → a manipulation at LO open is not
expected, only a small retracement into a P/D array is
likely
þ Asia raid on external LQ (for example an H1 raid)
þ A clear shift in orderflow is established afterwards
þ If Asia takes external LQ, but keeps consolidating afterwards, we anticipate
another manipulation at LO open
þ As we expect only a small retracement at the open, an entry shortly after 2 am
is optimal for this session profile
4-STEP TRADING PROTOCOL
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 NY continuation → retracement at NY open, followed by
a continuation of LO orderflow
þ LO likely made the high or low of the day
þ LO session did not overextend
þ Our DOL is still intact
þ The average daily range has not been met yet and price is still likely to expand
toward the DOL
4-STEP TRADING PROTOCOL
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 NY reversal → manipulation against the direction of the
daily bias at NY open or 8:30 am/10 am news
þ NY likely will make the high or low of the day
þ If we have high-impact news during NY and LO didn’t make the high or low
of the day this profile is more likely (for example, LO is a continuation of Asia
orderflow and the Asia and London highs or lows haven’t been taken out yet)
þ Most difficult profile to trade from my experience, best to avoid
 Daily Profiles
þ MO: avoid, unless TH/FR of the
previous week leave behind a low
resistance LQ run in the direction
of orderflow or we are about to
trade into an HTF LQ objective
(you want to use Monday price
action to anticipate the weekly
profile)
þ TU: MO-range – H/LOTW
4-STEP TRADING PROTOCOL
by J O K E R S Z N
þ WE: H/LOTW
þ TH: weekly reversal (consolidation
MO-WE)
þ FR: TGIF (20-30% retracement
into weekly range, Thursdays NY
session must show first signs of
reversal of weekly direction) –
expansion (seek & destroy MO-TH)
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Inversion level or P/D
arrays as HTF POI
 Timeframe Alignment
HTF P/D array
Execution Timeframe
Trading Style
Weekly
H4
Swing trading
Daily
H1
Short-term trading
H4
M15
Day trading
H1
M5
Intra-session trading
M15
M1
Scalping
þ If possible, always combine inverted P/D arrays with newly created P/D arrays
in the present orderflow.
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þ If the setup is based on the assumption, that the high or low of the day might
already be in (for example if you plan on trading the NY continuation and
you anticipate LO made the HIGH/LOW of the day), always make sure it has
formed at an HTF level, such as a daily or weekly.
þ A high-probability POI always origins after counterparty LQ against orderflow
has been taken and displacement is being followed.
 Most sensitive areas of P/D arrays
þ The 0.5 level of a P/D array
þ The upper half of a bullish P/D array or inversion level
þ The lower half of a bearish P/D array or inversion level
4-STEP TRADING PROTOCOL
by J O K E R S Z N
STEP 4
Entry and
Intermarket
Confirmation
LTF Intermarket
Confirmation
All assets are correlated, by looking at them, you will receive more
information to base your trading decisions on. When the intermarket
correlations align with the present orderflow, trading conditions are
in your favor. Relative strength between correlated assets is always
changing. Make sure you always trade the more favorable trading
pairs, which trade in sync and show clear displacement towards your
HTF LQ objective. Decoupled markets usually indicate an ongoing
manipulation in price or are introducing a shift in orderflow.
You do not have to use all of those correlations for your trading. Often
using only DXY for intermarket confirmation will be enough. Using
treasuries, bonds or the commodity market is just for extra confluence.
You should only apply those as a confluence tool at your HTF key levels.
 DXY is negatively correlated to EURUSD and all
other xxxUSD pairs
þ If you want to trade a bearish setup on EURUSD, you want to see
a bullish setup on DXY
þ If you want to trade a bullish setup on EURUSD, you want to see a
bearish setup on DXY
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 DXY is positively correlated to USDCAD and all
other USDxxx pairs
þ If you want to trade a bearish setup on USDCAD, you want to see
a bearish setup on DXY
þ If you want to trade a bullish setup on USDCAD, you want to see a
bullish setup on DXY
þ If DXY is not confirming your setup, your setup turns into a lowprobability trade and should be avoided. This means there is
a crack in correlation and we are trading in a low-probability
environment (decoupled market). Wait until market symmetry is
re-established, then look for potential setups.
 EURGBP: relative strength analysis between
euro and pound
þ If bullish, EURUSD is the stronger pair, and therefore better to look
for longs if DXY is bearish and GBPUSD is the better choice for
shorts if DXY is bullish
þ If bearish, EURUSD is the weaker pair, and therefore better to look
for shorts if DXY is bullish and GBPUSD is the better choice for
longs if DXY is bullish
 Treasuries: negative correlation to DXY
þ Use divergences between T-Notes to confirm possible reversals
on DXY (ticker on TV: ZF1!, ZN1!, ZB1!)
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 Bonds: positive correlation to DXY
þ Use divergences between 5, 10, 20, and 30-year bonds to confirm possible
reversals on DXY (ticker on TV: US05Y, US10Y, US20Y, US30Y)
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þ Divergences ahead of news events or during killzones can be used to confirm
reversals at HTF levels, often they are the result of a decoupled market
environment.
þ Divergences are only used at HTF levels at the right time (during active trading
sessions).
þ The most important correlation is always between the trading pair and the
dollar (DXY), this is where your main focus should be.
þ For optimal conditions you want to see the correlations mentioned above
being intact. For example, if EURUSD is bearish, you want to see bullish DXY
and bonds. At the same time treasuries and gold should trade down as
well. If one of those correlations is being disrespected, there is most likely
manipulation under the way.
The Entry Confirmation
The entry is the least important aspect of the protocol. If you have done the work
properly during the previous steps, finding an entry pattern at the right time, at
the HTF POI, will become easy. If your trade is based around the idea of entering
at an anticipated high or low of the day, make sure it has formed at an HTF level,
transposed from the daily or weekly chart. I would recommend using the m5 or m15
chart for intra-day trades. If you want to scalp or play an intra-session trade, you
can also go down to the m3 or even m1. It comes down to personal preference,
and what makes you feel most comfortable when trading. Always make sure your
entry is after an LTF run of stops against orderflow. If you are bullish, you want to
wait for a run of sellside into or close to your HTF POI, and the other way around if
you are bearish.
Time
 London session
þ From 2-5 am, the best
setups will usually
form after 3 am
þ Entries close to 5 am
should be avoided, as
we are heading into
London lunch hours
 New York
session
þ From 7-10 am, the best
setups will usually form
after 8 am, especially
if there is news at 8:30
am
þ Entries close to 10 am
should be avoided,
as we are heading
into the London close
session
 London close
session
þ From 10 am - 12 pm
þ Only should be
traded if there is
news at 10 am and
the NY session had a
consolidation profile
or the average daily
range is still not met
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 TDO Confluence
þ Buy below TDO if bullish (on a bullish day everything below the TDO is
considered as discount)
þ Sell above TDO if bearish (on a bearish day everything above the TDO is
considered as premium)
þ This applies especially to LO session trades, if playing a NY continuation, it is
also okay to buy above or sell below the TDO. However, make sure the average
daily range has not been met yet and price is not overextended or has already
taken out the LQ objective
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 Shift in Orderflow
Orderflow is defined by how P/D arrays are being respected and/or violated. As
our entry timeframe, we preferably use the m5 chart, as it has the optimal ratio to
position yourself according to a session or daily profile (for daily profiles, the m15
chart is also an option).
þ A bullish shift in orderflow will violate bearish P/D arrays and respect the newly
created bullish ones
þ A bearish shift in orderflow will violate bullish P/D arrays and respect the newly
created bearish ones
A market structure break is just one form of confirming a possible shift in orderflow,
as it is just one form of P/D array violation. Other forms of confirming shifts in
orderflow are the following:
þ BPR (this is one of the strongest signs of a shift in orderflow, once we see
an FVG being overlapped with an opposing FVG (=BPR), we have an highprobability indication of a shift in orderflow)
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þ FVG + BRKR/OB (combined with a BRKR/OB is an ideal entry pattern, depending
on where the FVG is placed around the breaker, the FVG might also act as a
breakaway gap)
þ Mitigationblock (this entry model can often be used in combination with a SMT
of a correlated asset. If the orderblock fails to create a new high or low, the
orderblock turns into a mitigation block once we close below (bearish case) or
above the orderblock (bullish case))
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Order of Entries
 Turtle Soup Entry (Offset Accumulation)
þ entering a position without an LTF confirmation
þ runs above old highs or below old lows against a clear oderflow into an
þ HTF POI are perfect conditions for turtle soup entries
þ in a bullish HTF orderflow, buy below an old STL into a relatively HTF bullish
P/D array below/inside
þ use a 10-30pip stop below the STL at the HTF invalidation level
þ the placement and size of the stop should always be within the context
of the narrative, meaning which HTF level supporting your idea of buying
below an old low should not be violated
þ in a bearish HTF orderflow, sell above an old STH into a relatively HTF bearish
P/D array above/inside
þ use a 10-30pip stop above the STH at the HTF invalidation level
þ the placement and size of the stop should always be within the context
of the narrative, meaning which HTF level supporting your idea of selling
above an old high should not be violated
þ Only use turtle soup entries if you have a clear invalidation level originating
from an HTF P/D array close to the old highigh/lowow
 LTF Confirmation Entry
þ This entry is followed right after the turtle soup entry once we see our LTF
confirmation/displacement
þ Enter at an imbalance or orderblock
 Retracement Entry
þ Price has already established a new trend and is now drawn toward our
DOL
þ Enter at a breakerblock or imbalance (only if DOL has not been taken out
yet)
4-STEP TRADING PROTOCOL
by J O K E R S Z N
32
4-STEP TRADING PROTOCOL
by J O K E R S Z N
33
 Stop Placement
þ Your stop should always be placed where your trade idea would be
invalidated, at a logical and reasonable level. Never place your stop at a level
for the sake of having a setup or higher risk to reward trade by keeping your
stop as small as possible
þ Never put your stop loss below/above a weak low/high
þ You can also put your stops below/above 2-3 P/D arrays of your entry P/D array
 Take Profit
þ Above old highs and below old lows (external LQ)
þ Inside FVGs (internal LQ)
If you are not yet profitable or new to the protocol, I recommend taking off half of
your position at an LQ pool or opposing P/D array that offers approximately 2 RR
from your entry. Allow some partials of the initial position to continue running, to
capture the majority of the move until the DOL is met.
As you gain more experience in identifying high-probability setups, you become
more comfortable with holding positions for extended periods. You learn how to
effectively manage trades, and can gradually aim to hold larger portions of your
position for higher RR returns. This approach allows you to balance risk and potential
reward while adapting to your evolving trading skills and confidence.
4-STEP TRADING PROTOCOL
by J O K E R S Z N
34
Standard
Deviations
You can use STDV’s to identify potential take profit or retracement areas, by aligning
them with the DOL and other P/D arrays.
Identify Swing High/Low:
01.
Look for a swing high or low that has taken LQ from a
previous swing high or low and has resulted in a break in
market structure.
Fibonacci Tool Application:
02.
Apply the Fibonacci retracement tool from high to low or
low to high to project the potential retracement levels or
extension targets.
Extension Targets:
03.
Focus on the 2.0, 2.5, 4.0, and 4.5 extensions as potential
targets. Ideally, these extensions should align with significant
P/D arrays, such as old swing highs or lows. This alignment
enhances the reliability of these levels as potential areas for
take profit or retracement areas.
4-STEP TRADING PROTOCOL
by J O K E R S Z N
35
You can use STDV’s to identify potential take profit or retracement areas, by aligning
them with the DOL and other P/D arrays.
4-STEP TRADING PROTOCOL
by J O K E R S Z N
36
Position
Management
Â
We want to see an immediate reaction in the
form of displacement from our HTF POI, if we keep
consolidating at that level, the setup becomes lowprobability
Â
HTF raid on external LQ against trade direction,
followed by a reversal, invalidates the setup, and stops
are moved to break-even or limit orders get canceled (if
you have not been in a position already)
Â
Stops are only moved once a strong high/low has been
formed that has taken LQ
Â
Trades can be closed early if the trade idea is
invalidated by changes in orderflow
Â
Scale into positions and pyramid when market
conditions allow it (heavy one-sidedness)
Â
Pyramiding is only allowed after stops of the initial
position are moved
Â
The maximum open risk should never exceed the one of
your initial position
4-STEP TRADING PROTOCOL
by J O K E R S Z N
37
Pyramiding
Management
The idea behind pyramiding into trades is to maximize the potential rewards of your
winning setups while keeping risk at a minimum.
By moving stops of previous positions, you have no the opportunity to add on new
positions, while staying at your initial risk profile.
You also passively improve your risk management, by making sure the size of your
winners is far bigger than the losses.
By being able to capitalize way more on one setup via multiple executions, it allows
you to wait for the A+ setups. Less is more.
I only advise you to consider pyramiding into multiple positions, once you are
consistently profitable trading one position per setup.
Â
New positions are opened after old P/D arrays are
reclaimed and turned into inversion levels or a new P/D array
is formed
Â
If bullish, only pyramid at discount, if bearish, only pyramid at
premium of the anticipated dealing range
Â
A new position is only opened when the stops of the previous
positions are trimmed, to keep open risk at a minimum
Â
Each new position is reduced in size (e.g., 1% → stops get
tightened → new position with 0.5% → stops get tightened
on 2nd position → new position with 0.25%)
4-STEP TRADING PROTOCOL
by J O K E R S Z N
38
Journaling
To become a better trader, you must learn from your
losses what to avoid and from your winners what to
focus on. To do this, you must maintain a trading journal
for every trade you take, documenting all relevant
variables.
Review your trade history, analyzing both your winning
and losing trades. Identify recurring patterns within your
successful trades as well as your losing ones. Eliminate
the patterns that lead to losses and leverage those that
result in wins. This approach will help you reduce losses
while increasing your profits, thus improving your overall
win rate.
I not only recommend journaling your trades, but also
your emotions and all behavioral patterns before,
during, and after taking a trade. Your trading system
is just one aspect of your overall trading strategy; you,
as the trader, are the most critical factor in determining
your success in trading. Therefore, do not overlook the
importance of personal development. Often, the reason
for unprofitability cannot be found in your system or the
charts, but rather within your mindset.
4-STEP TRADING PROTOCOL
by J O K E R S Z N
How To Pass Prop
Firm Challenges
- My Approach
When it comes to successfully passing prop firm challenges, an effective risk
management strategy is crucial. Finding the right balance between risking too little
and too much is key. Both extremes have their downsides; risking too little may result
in prolonged evaluation phases while risking too much can lead to blowing through
challenges quickly and struggling with the emotional aspects of trading. Therefore,
I employ a dynamic risk management approach that combines the strengths of
both methods. The specific risk management protocols may vary within different
phases of the funded account, typically consisting of two evaluation phases and the
funding stage upon successful completion of both.
 The 1st Evaluation Phase:
In this phase, where a larger profit target is required for quick progress, I adopt an
aggressive risk management approach. I use the following risk protocol:
Balance Change
Risk per setup
<-5%
1%
<-3%
0.25%
0% (starting balance)
0.5%
>+1%
1%
>+3%
1-1.5%
You might wonder why the risk per trade increases to 1% even when the drawdown
exceeds 5%. This is to minimize time opportunity costs. Rather than slowly trading
out of drawdown, I prefer to increase risk and attempt to either break even quickly or
accept the possibility of losing the challenge. If you can not afford to lose a challenge,
sticking to lower risk like 0.25% per setup until the account returns to break even might
be a better option. I’d rather fail a phase 1 challenge quickly and purchase another
one than waste time and mental energy trading out of drawdown in the first phase.
39
40
 The 2nd Evaluation Phase:
Once phase 1 is completed, and a lower profit target is required, a less aggressive
risk management approach is employed:
Balance Change
Risk per setup
<-2%
0.25%
0% (starting balance)
0.5%
>+2%
1%
We aim to keep our time-based opportunity costs relatively low in the 2nd
evaluation phase. Losing the 2nd phase account would mean having to repeat the
1st phase, which is why we adopt a more cautious approach and strive to minimize
potential drawdown. Risk is only increased when we have a cushion of at least
+2%. If the drawdown falls below -2%, we maintain a risk of a quarter percent until
the drawdown is fully recovered and back above the -2% threshold. This approach
is designed to create a balance between preserving capital and meeting the
objectives of the 2nd evaluation phase.
4-STEP TRADING PROTOCOL
by J O K E R S Z N
41
 The Funded Account:
In the funded account, where both phases have been passed, preserving the
account becomes the top priority, followed by receiving the first payout and refund
of the signup fee. Funded accounts should be approached conservatively, and the
risk management protocol is adjusted as follows:
Balance Change
Risk per setup
<-5%
0.15%
<-2%
0.25%
0% (starting balance)
0.25-0.5%
>+2%
0.5%
>+5%
0.5-1%
Lowering the risk per setup as the drawdown increases serves as a protective
measure to prevent breaching the maximum drawdown rule. This approach may
result in a longer process of trading out of drawdown, but it is a more favorable
alternative to losing the account altogether. It is crucial to ensure you have some
funded accounts on the side or engage in different setups on separate accounts.
For instance, you might allocate one account for swing trades and another for
day trades. This diversification is just one example; there are various possibilities to
explore.
Maintaining a consistent approach is vital. Using the same risk and the same trades
across all accounts can lead to synchronized drawdowns, which can be risky. Your
objective should always be consistency, not only in your trading performance but
also in the frequency of your payouts. Therefore, having accounts that do not
experience the same drawdown as the others is essential for receiving regular
payouts. Think of it as ensuring you have enough “bullets” to keep trading effectively
and managing risk across your various accounts.
4-STEP TRADING PROTOCOL
by J O K E R S Z N
42
Abbreviations
Â
BPR Balanced Price Range
Â
MO-range Monday Range
Â
BRKR Breakerblock
Â
NY New York
Â
DOL Draw on Liquidity
Â
OB Orderblock
Â
DXY US Dollar Index
Â
P/D array –
Premium/Discount Array
Â
FVG Fair Value Gap
Â
POI Point of Interest
Â
FR Friday
Â
RR Risk-Reward
Â
FX Forex
Â
SMT Smart Money Divergence
Â
H/LOTW High/Low of the Week
Â
STDV Standard Deviation
Â
HTF Higher Time Frame
Â
TDO –
True Day Open (NY-midnight
price)
Â
LQ Liquidity
Â
TH Thursday
LRLR Low Resistance Liquidity Run
Â
TGIF Thank God It’s Friday
LO London
Â
TU Tuesday
MMXM Market Maker Buy/Sell Model
Â
WE Wednesday
Â
Â
Â
4-STEP TRADING PROTOCOL
by J O K E R S Z N