To help beginners, he conducts not only seminars in Kyiv and Moscow, but also a series of webinars in video format, where he explains his trading system in detail. Since he is a successful trader, his strategy is popular with many beginners.

Trading from levels is the key to success of A. M. Gerchik

In his practice, Gerchik uses price levels. This strategy is also used by many other professional traders, since it involves minimal risks and can still count on good profits. With this approach, there is always a clear entry and exit point, as well as a competent place to place a stop loss, which allows you to minimize risks.

Before trading this strategy, you need to go through and learn how to identify important key levels on the chart. In his videos, A. M. Gerchik explains in detail what they are and how to find them on the chart. He, like many other traders, prefers to use price reversals and price stops on daily charts as significant moments.

This timeframe is very important, since many market participants focus on it, placing large orders directly near the levels.

Method of trading from levels according to Gerchik

Trading from levels is based either on their breakdown or on a price rebound from it. In the first case, the trader expects that the price will continue to move in the current direction. The trade is opened immediately after the breakout occurred and the bar closed above it.

This strategy is considered very aggressive, since not every breakout allows you to make money in the market. It is not uncommon for the price to come back. Some traders prefer to use a more conservative breakout trading strategy. In this case, the trader must wait for the price to return and test it on the other side.

Trading from pullback levels is very similar to conservative breakout trading. Except that in this case the price cannot break through it for some time. Both breakouts and rebounds, A. M. Gerchik recommends trading only pending orders, which are located either in front of him or behind him, depending on what you expect from the market.

Regardless of whether you prefer to trade breakouts or rebounds, the stop loss is placed beyond the level below the nearest price pullback. Take profit is placed near the next level, while the profit is at least three stop loss sizes, which is the key to successful trading.

conclusions

Alexander Mikhailovich Gerchik is a successful trader who is famous for the fact that for a long time he did not have more than one unprofitable month. His strategy is very popular among beginners.

He conducts seminars as well as video webinars, where he talks in detail about the method of trading from key price levels. This method allows you to significantly reduce risks, as well as receive a stable profit of 10% or more based on your deposit.

The popularity of the strategy also lies in the fact that the trader always knows where to place stop loss and take profit. Using it in his trading practice, a beginner will very quickly learn not to lose money in the market, and will soon begin to make profit from the market. Let us remind you that to pass

In this article I want to talk about one of the strategies that were developed by trader Alexander Gerchik. Observation of price dynamics on the market showed that most of the time it fluctuates between two levels. Finding such levels is the essence of this trading system. Gerchik’s strategy, which will be discussed today, does not involve the use of any. To generate a trading signal, it is necessary to have levels and a combination of three candles that meets a certain condition. Now let’s look at the rules for opening trade transactions in more detail.

Condition for opening a buy order

Gerchik's strategy provides for the following rules for opening transactions. To make a trading decision, it is necessary to form a pattern of three consecutive candles. If the Low of one of these candles forms a local minimum (base level), then this is a signal to open a BUY order. We enter the market at the opening of the fourth candle.

I would like to draw your attention to the fact that the local extremum (base level) is determined not by the price, but by the price range (yellow lines). Moreover, the strength of the base level depends on how many candles took part in its formation. The more there are, the stronger it is.
The stop loss should be set a few pips below the base level. And take profit is three times the size of SL. You can also determine the TP multiplicity based on the degree of strength of the base level.

If the stop loss size is too large, then achieving 3-4 times the take profit size may become unrealistic. In this case, a reasonable decision would be to refuse to enter the market at the opening of the fourth candle. You can watch the market. Perhaps the price will approach the base level, which will allow you to open an order with a small SL size.

Condition for opening a sell order

It is similar, but with appropriate amendments. To open a trade, you need a pattern of three candles, the High of one of which forms a local maximum (base level). We also open a deal on the fourth candle. Stop loss is placed slightly above the base level. For take profit, the rules are the same as when opening a BUY transaction. On a price chart, a sale might look, for example, like this:

Despite its apparent simplicity, Gerchik’s strategy requires developing skills in its application in trading. That's what a demo account is for. Take the time to test the trading system, and then over time you will be able to earn good profits from it

Alexander Gerchik is a legendary speculator on the New York NYSE, who managed to be among the best day traders of 2006 for the almost complete absence of negative trading results, which is a huge rarity even among great market professionals. As a simple boy from Odessa, without higher education or connections, he came to America in 1999. Having started, like many other emigrants, by working in a taxi, within three years the talented young man was able to complete a brokerage course and, having passed a difficult exam, began trading shares on Wall Street.

Just a couple of years later, having developed his unique trading algorithm, Alexander reached the heights of the trading Olympus and was hired as a managing partner of the largest financial company. This success story is like many others that tell the story of talent, perseverance and luck and can serve as a great example of achieving goals in the financial business. But the most remarkable thing about it is Gerchik’s unusual trading strategy, thanks to which he became so famous and successful.

The basis of trading using the Gerchik algorithm is that all the strongest and most significant movements in the market, which are especially profitable to use, begin precisely from the levels. By levels, the author of the strategy understands not only the support and resistance levels familiar to all of us in places of price extremes, but also various areas of consolidation classified by strength - peculiar shelves on the chart, from which you need to open transactions.

According to Alexander Gerchik, trading by levels, in addition to a clear and visual system, has another important advantage: a fairly high risk-to-reward ratio in transactions is maintained, which is always no worse than 1 to 3. The fact is that in trading, especially if the work takes place within a day, it is almost impossible to achieve more than 40–45% of successful transactions, which is an exceptional result. The majority of traders open their correct positions only 35% of the time or worse, and profitability is limited by the maximum daily movement of quotes. It is for this reason that Gerchik’s trading algorithm is based on consolidation levels, where the smallest stop loss is placed.

In addition to classifying levels by strength, Gerchik’s system divides consolidation zones into several types of patterns, each of which is an easily recognizable combination of bars located near the trading level and making small fluctuations before continuing active price movement. It is on the basis of patterns that the trader makes a decision on successful entry into the market.

The power of levels for trading according to Gerchik

According to the trading algorithm of Alexander Gerchik, there is a clear division of trading levels by strength. The stronger the signal, the fewer confirming bars are required to open a new trade. This classification is simple and understandable even for beginners:

• The mirror level of consolidation or the place where former resistance changes to support and vice versa is considered one of the strongest trading signals and can be entered on the third bar. The coincidence of the mirror level with a round number is a significant gain.
• The next most powerful one is one that arose after a false breakout, when the tail of the candle pierced the price mark, but trading resumed in the previous direction. To enter using such signals, three bars are enough, and a match with a round number serves as confirmation.
• A repeated level, which has already been passed by the price earlier with the formation of a similar consolidation, subject to a round number (00, 25, 50 or 75) as a psychological reinforcement of its strength. It also allows for a quick entry after three bars, although slightly weaker than the previous one.
• The previously existing level without confirmation in round numbers is the last strongest of this group. All weaker levels require completion of four full bars instead of three to enter.
• An air level or a new consolidation shelf formed as the price moves, if it is formed in the area of ​​round numbers, is considered not the strongest option and allows entry after four confirming bars.
• An air level that has not been encountered before, if it is formed without amplification, is considered the weakest signal and requires 4 candles per entry.

Gerchik's strategy patterns

The trading algorithm of Alexander Gerchik requires a clear knowledge of the main patterns (market models) that can be formed by the price near the selected levels. There are eight such models in total – four each for buy and sell transactions:

1. Candles stuck on top. Their bodies and tails are relatively short in length, no more than 150 points for a five-digit Forex broker. Depending on the strength of the level, 2-4 formative bars are required: two for the strongest with round number confirmation, three for most others and 4 for the weakest air signals. For long trades, the approach to the level should only be from above. The entry is always with a limit order slightly above the level, the stop is no more than 300 points with a mandatory daily supply of at least 1000.





2. Reverse sell pattern. Candles stuck to levels of varying degrees of strength. Completely similar to the previous one, but the approach for short is only from below.
3. The candle pierces the level, but closes above it. The bodies must be short in length, not exceeding 150 points. To enter a pattern with a limit order, only strong signals with confirmation of three bars are suitable. Stop loss up to 300 points is set either outside the lower shadow of the breakout candle or slightly higher. Transactions are opened with a power reserve of at least 1 thousand points.





4. Poked with closure below the level. Completely similar to the previous pattern, but it works for selling when approaching the level from below.
5. Breakout followed by repurchase of positions in the upward direction. The closing level of the first broken candle is slightly lower than or equal to the opening of the next one, and the closing level of the redemption candle is above its maximum. The bars forming the pattern should be no more than 150 points including tails. Works only with strong levels. Entry using a limit order after the third candle with a stop of 300 points and a minimum target of 1000.





6. A figure similar to the previous one, but approaching the level from below. Opening a short position using a limit order with a stop of up to 300 points and a target of at least 1000.
7. Formation of a mirror. This pattern represents a change from support to resistance when approaching a level from below. It only works on strong signals, provided the breakout candle closes above them. Bars confirming the pattern must be less than 150 points. To enter, limit orders are used with a target of 1 thousand long points and a stop of up to 300.





8. A mirror level similar to the previous one, for trading short positions. Approach only from above.

Gerchik strategy for binary options

Despite the fact that Alexander Gerchik developed his trading algorithm specifically for stocks that he himself successfully traded on the NYSE, he recognizes the versatility of the method and its independence from the type of financial assets. Many traders have tested it in futures trading, and there are even special courses on the system for Forex players. Such a relatively new financial instrument as binary options is also quite suitable for profitable use of the level trading strategy.

The goal of a binary options trader is to predict the direction of price movement as accurately as possible. It is the level that is the separator for CALL and PUT type forecasts, the confirmation of which directly depends on how the price behaves after consolidation. To use the Gerchik system in binary options, no special changes or additions are required. It is enough to find the right time, in accordance with the above rules, and make an option bet in the desired direction. Of course, we must not forget about the standard rules of money management, which ensure success and safety in any trading.

A. Gerchik is known among traders as a successful investor who has achieved high results. Every participant in the Forex market has heard that Gerchik conducts courses, webinars, etc., perhaps even you have opened his articles.

Such a personality was able to evoke a mixed opinion among investors. There is a group of practicing speculators who consider Alexander a guru of the foreign exchange market. And there are those who insist that this is an information trader who makes a profit by selling his own courses. Who is A. Gerchik for you?

So, in this article, we will look at a trading strategy for the Forex currency market. Moreover, we provide you with recommendations from Alexander.

So, this is a Ukrainian who emigrated from Odessa to America in the late 90s. Initially he worked as a taxi driver, dreaming of becoming a trader on Wall Street. But this required taking 4-month courses and passing exams.

Then Alexander took courses, and even more, received a license from a stock market broker, and began working as an assistant trader in a small company.

Worldco - This company became the place where Gerchik's career as a successful investor began. After some time, a brokerage company was created together with other traders - . Then the investor began to create courses, webinars, write articles and books.

As we can see, it was not an easy path for Gerchik to become a professional, well-known trader in the world.

TS “False Breakdown”

• Type of tactics— trading based on levels.
• Trade– once a day.
• TF- one day.
• Trading assets: British pound-dollar, dollar-yen, Australian and American dollar, gold.
• Recommended broker— Gerchik & Co

Features of searching for levels on a chart

The technique developed by Gerchik uses designations specially compiled by him for certain points on the chart:

• BSU– a bar that was formed by the level.

This bar is taken into account only when connecting BPU bars 1 and 2, which act as proof of the level.

• BPU– bar confirming the level.

This bar is based on the level formed by the SU bar with the same number of points. In this case, between the bars of the confirming and forming levels there may be an unspecified number of intermediate bars.

Even more, bars on the chart can be located in different directions from the level. But, in this case, the level can be formed by both the shadow and the body of the candle.

There should be no buffer bars between the bar of confirming levels 1 and 2; they must be located one after the other. In this case, the bar confirming level 2 should not approach the level up to points; even more, there may be a small amount of play between the levels.

It turns out that the SU bar and the PU bar are located on different sides of the level. In this case, bars PU 1 and 2 should be located in the same plane.

• Level is round– a level ending with a round number.

A level is powerful if historical and mirror type levels are formed on it.

Trading according to the method of A. Gerchik

So, everyone knows that three scenarios can occur in the market:

• Level breakdown.
• Bounce from the level.
• And also an incorrect level breakdown– this is a situation when the price on the chart breaks through a level and then turns in the opposite direction. Please note that this type of breakout can be of several types: simple (the price breaks the level and returns to its original position) and complex (the price breaks the level, fixing itself behind it, and after one of the previously placed bars it will return to its place)

Incorrect breakdown occurs most often in such cases as:

It should be noted that a successful investor only works with complex and incorrect breakout levels. Alexander uses the system he compiled:

• Power levels are calculated.
• We expect a breakout of the level and fix the price behind it.
• Orders are placed, taking into account that the price will reverse in the opposite direction.

So, so that you understand what the essence of the technique is, let’s look at a clear example of concluding a deal.

The first step before trading is to mark the levels on the chart. Initially, a weekly chart opens and, in accordance with the trading method presented earlier, we form levels on W1, after which you can move to a single daily chart, and there you need to find the closest powerful levels.

After this, we expect the breakout of one of the levels. Then, as soon as the level breaks through, we place an order at the end of the day.

As an example, consider concluding a transaction on the Australian-American dollar currency pair. After the formation of a complex incorrect level breakout, a SL order is placed.

You need to bet behind the tail of the bar that broke the level. The size of the TF should be calculated in a ratio of 3 to 1 from the ST.

The position is being split. As an example, moving to lot 1.2 with a TF 3 to 1 and 1.1 lots with a TF 4 to 1, the first TF is triggered, which means the second operation can be transferred to breakeven.

If the order is inactive, the price moved more than half the distance to a further level, most likely the breakout can be considered active, and the order should be deleted.

Conclusion

Gerchik’s strategy is not easy, but at the same time the trader has the opportunity to work with the methodology of a successful investor. Please note that it is recommended to work out the tactics on a training deposit. Since there are really a lot of conditions, plus you shouldn’t forget about the basic rules in the field of trade.

1. I don’t trade for the first hour, I watch how the instrument is traded (breakouts of levels are traded for the first hour).

2. Trade strictly according to the algorithm.

3. Enter into formations that I see and understand.

4. Trade only rebounds from levels.

5. Two timeframes are used for trading:

a) day - determining levels, trend direction, ATR and power reserve;

b) 5 minutes – determining the entry point.

6. Trade from stop.

7. Power reserve:

a) daily ATR – up to 75% entry into the trend, after 75% entry into the countertrend;

b) look at the nearest support/resistance levels.

8. Wait for the entry point, do not search. Who seeks will always find.

9. Enter with limit orders.

10. Start trading with one contract:

a) if the week closes with a profit, I increase the volume;

b) if the week closes with a loss, I reduce the volume.

11. The maximum risk per transaction is 1% of the deposit.

12. The maximum number of losing trades per day is 3 trades.

13. If on a profitable day a losing trade takes 30% of the profit, the working day is over.

Markets (forts)

Tradable instruments:

Stock futures contracts

• OJSC "Sberbank of Russia" ordinary shares
• Gazprom"
• Si – dollar-ruble exchange rate

Trading time (forts)

Work schedule

10.00-14.00 Beginning of the main trading session.

14.00–14.03 Interim clearing session (day clearing).

14.03–18.45 End of the main trading session.

18.45–19.10 Evening clearing session.

19.10–23.50 Evening trading session.

From 10.00–11.00 I watch the market and do not trade. I don’t trade at the beginning of the evening session.

Levels (forts)

1. I determine the levels at D1, the day is always primary.

• Level – the point (price) at which the issuer changed its direction, i.e. We don’t know where the level was, we only take historical events. After the fact.
• Levels are formed only by a trend break or long trades.
• The strongest levels are formed by tails and false breakouts.
• We believe that everything goes from level to level.

2. It can become a level.

• The closing price of the instrument on the previous day.
• The opening price of the instrument on the previous day.
• High/low of the year
• High/low of the previous month/week/day.
• The lower retracement point is on an up-trend and the upper retracement point is on a down-trend.
• High/low spike on large volume.
• Border gaps.

Levels that were “worked out” in previous days.

3. Strength levels (from weak to strong)

• Air level (1+2+3+4 in a beam, BSU has not been encountered before within the screen).
• Air level + round number.
• Level encountered before.
• Previously encountered level + round number.
• Mirror level.
• Mirror level + round number.

4. Air level (+ 1 point)

• The weakest model in terms of information content is the air level.

BSU-bar that formed the level.

BPU— the bar that confirmed the level.

This is where the BSU is; BPU-1 and BPU-2 go all in a row, without gaps.

• At the air level, do not enter into a countertrend! Only according to the trend.

Air level + round number (+ 2 points)

• There is such a thing in technical analysis as a round number, for example the level 79500 or 39000.
• Typically, the strongest option levels are located at these levels.
• These so-called round numbers - they strengthen the levels, that is, if the level is located on a round number, then its strength is stronger.

5. Level that has been encountered before (+ 3 points)

That is, somewhere there was some kind of trading and a reverse limit order begins. The level that was encountered earlier is naturally more informative in strength.

There can be any number of bars between the BSU and BPU-1.

6. Level that was met before + round number (+ 4 points)

7. Mirror level (+ 5 points)

8. Mirror level + round number (+ 6 points)

Mirror level, i.e. in simple terms, where the support level becomes a resistance level (and vice versa) - this is the strongest level in terms of information content.

9. Level Boosters

• Tails (wicks) – if there were long shadows when the level was formed.
• Round numbers – psychological level.
• False breakout is a breakout formed by two bars stronger.

There are also two levels that are not suitable for creating a trading model and carry only information:

• Floating – there is no clear limit player;
• The internal one is clamped and has no power reserve.

Trend (forts)

• For us, a trend is where we are relative to levels.
• On the daily chart we look at the current price relative to current levels, i.e. below the level - go short, break through the level down and gain a foothold - go short.

• If we are above the level, it means that we are in the long zone and we are looking at all trades in long. We broke through the level up and settled – long.

• For us, zones are our trend.
• There is only one task: above the band - we buy, below the band - we sell.

Conditions for entering a trade

1. We determine the levels during the day.

2. Global stock trend:

• If we are above the level, it means that we are in the long zone and we are looking at all trades in long.
• If we are below the level, it means we are in the short zone and all transactions are considered short.

3. Power potential (reserve).

a) We look at the average ATR for the last 3-5 days;

• Entry following the trend – when the instrument passes up to 75% ATR;
• When we pass 75% – ATR, we do not trade with the trend. We are looking for a counter-trend entry point.

When an instrument is near record values ​​– it overwrites high/low – we can close one eye to the past ATR and continue to follow the trend.

b) I'm looking power reserve to the nearest support/resistance levels.

4. If there are no shadows on the candle of the previous day, it is likely that the movement will continue - someone did not manage to buy/sell everything yesterday (it is also a “panic” candle).

• Closing a transaction at the highest/low level – 9 out of 10 continuation of the movement – ​​not everything is bought/sold.
• No more than 10% play is allowed.

5. I am looking for options for a short stop – a strong level.

6. Stop loss calculation

• Max. Stop loss 0.2% – trade following the trend. 0.1% – against the trend.
• Si = 20 points (not calculated)

7. Calculation of profit (Take profit)

• Risk/reward ratio of at least 1:3
• If the entry is more than one lot, I exit in parts of 50-60% - 1:3, break everything else into parts - 1:4, 1:5, 1:6, etc.
• When the price passes the goal 1:3, I transfer the remaining parts to 1:2.

8. Calculation of backlash = 20% of the Stop loss size

Si = 04 kop. (fixed)

9. TVH – BSU; BPU-1; BPU-2 TVH

• Entering a trade with a pending order + backlash.
• I set stop loss right away.
• I set take profit right away.
• Don't go under pressure.

Entering a position

Model

1. We have a level.

• BSU is the bar that formed the level.

2. BSU is a post-factum phenomenon that confirms the presence of a previous level.

3. BPU is the bar that confirmed the level.

4. There can be any number of bars between the BSU and the BPU. BSU and BPU must hit point to point.

5. The BSU can be located in any plane relative to the BPU, i.e. it doesn't matter where it is located.

6. After BPU-1 comes BPU-2. There cannot be any other intermediate bars between BPU-1 and BPU-2, i.e. they must be a bunch. BPU-2 may not reach the level of the amount of play.

7. TVX is the entry point.

• 30 seconds before the closing of BPU-2, a limit order to sell or buy is placed.

8. After placing a limit order, I immediately place Stop loss and Take profit in the order.

9. A limit order to buy or sell is canceled when the instrument passes 2 stops.

• The main condition for 2 stops is the closing of a bar or candle at the level of 2 stops.
• If the price approaches the next level with abnormally large bars, this is a signal to exit the trade; a rebound from the level is likely.
• If the price approaches the next level with small bars, this is an accumulation of the position, a breakdown of the level and Support Resistance is likely.

Models we are looking for

• At the levels you need to learn to see the battle plan between buyers and sellers and choose the winning side.
• Traders' belief in support and resistance levels shapes these levels - these are self-starting mechanisms.
• What is the logic of traders based on, what puts pressure on traders’ brains? - Templates! Patterns are triggered, and it all works on the analysis of the past, on the analysis of charts.
• Everyone sees the same thing. But still, the connection will always be the same - to the level.
• Everyone is looking to be attached to something.

Entry points

There are situations when there are limiters at the top and bottom. Provided that the price is clamped from above and below by limit levels, the work is carried out according to the local trend.

• We came from below - we go up.
• We came from above - let's go down.

The exception is the previous historical level.

• If there was a historical level, we go into a countertrend.
• If there were no historical levels, we follow the trend.

Range (RANGE)

At RENGE we keep things simple. We have a corridor.

• And naturally, the lower and upper boundaries of the corridor are our levels.
• Trading is carried out from level to level.
• The corridor width must be at least 3 ATR.

Exit from the deal

The hardest thing is the simplest, oddly enough. These are the exits.

I come up with an extremely simple ratio: 3 to 1; 4 to 1 and 5 to 1. This is any intraday transaction.

• 3 to 1 – we get 50-70% of the transaction volume.
• I break everything else down into parts.

Only when we do a breakdown by output, only in this way can we learn to sit in the issuer.