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In this episode of Words of Rizdom, Ken Chigbo lays out how he went from analyst to independent risk-taker and why his voice cuts through the noise for everyday traders. He’s direct, practical, and focused on what actually moves markets—pairing clean charts with a macro lens so you’re not guessing. If you’re new or returning to trading, Chigbo’s approach matters because it shows how to build structure, cut bad habits, and think in probabilities instead of predictions.
You’ll learn a trader strategy that blends simple technicals (trend, levels, and momentum) with a fundamentals checklist (rates, growth, and inflation) to form a clear bias before you click. Chigbo breaks down risk limits that survive drawdowns, a routine for pre-market prep, and how to journal trades so your edge becomes repeatable. The takeaway is a beginner-friendly playbook you can apply today: trade less, size right, respect your stop, and let the market confirm your idea before you press the button.
Ken Chigbo Playbook & Strategy: How He Actually Trades
Core Framework: Bias First, Execution Second
Ken builds a clear market bias before touching the button, then lets simple, repeatable rules handle execution. The aim is to avoid guessing—use the macro to point the compass, and technicals to choose the exact path in and out.
- Define a directional bias for each FX pair daily (bullish, bearish, or neutral) before the session opens.
- Only take trades in the direction of your bias; skip anything that conflicts (“no bias, no trade”).
- Keep the system modular: Macro → Technical Setup → Risk → Management → Review.
- Hard rule: if macro and technicals disagree, stand down or cut size by 50%.
Market Prep: Daily Routine That Lowers Noise
You’ll trade better when your prep removes uncertainty. This routine gets you aligned with the session’s narrative and keeps you from chasing the first candle you see.
- Set prep window: 45–60 minutes before London or New York open; no entries until prep is complete.
- Build a tight watchlist of 4–8 pairs; remove anything with messy structure or overlapping correlations.
- Note the day’s event risks (rates, CPI, jobs, PMIs); mark “no-trade” windows around the highest-impact prints.
- Prewrite two plans: “If trend continues, I’ll do X” and “If mean reverts, I’ll do Y.”
Macro Scorecard: A Simple Way to Keep a Fundamental Edge
Ken keeps macro simple and visual. Score the drivers that actually move currencies, then trade the strongest differentials instead of headlines.
- Score each currency (0–5) on: policy rate trajectory, inflation trend, growth momentum, labor strength, and risk sentiment.
- Trade pairs with ≥3-point differential (e.g., +4 vs. +1); avoid anything ≤1 differential.
- If policy expectations flip (e.g., surprise dovish turn), reset the scorecard before the next session.
- Re-score weekly; intraday changes only if a major central-bank or Tier-1 print materially shifts the outlook.
Technical Triggers: Clean Structure Over Complication
Once the bias is set, the chart work is straightforward. Ken favors clarity—trend, levels, momentum—over indicator soup.
- Top-down first: mark HTF trend on D1/H4; only look for entries on H1/M15 in that direction.
- Trade from levels: prior day high/low, weekly open, HTF supply/demand, and untested session pivots.
- Momentum filter: wait for a break-and-close beyond a level, then a one-bar pause or retest to enter.
- No entry if ATR(14) < 60% of 30-day median on that pair (skip low-energy environments).
Risk & Position Sizing: Stay Solvent to Stay in the Game
Risk is the only input you fully control. Ken uses fixed fractions, clear invalidation, and non-negotiable circuit breakers.
- Risk per trade: 0.5% (max 1%) of account equity; max 2 open positions correlated in the same direction.
- Daily loss limit: 2R or 2% (whichever comes first); stop trading for the day immediately when hit.
- Position size = (Account * Risk%) ÷ Stop(pips) × PipValue; round down to nearest micro-lot.
- Leverage cap: never exceed notional exposure > 8× account equity across open positions.
Entry Rules: Make the Click Boring and Consistent
Entries are where discipline shows. You’ll act the same way every time, or you don’t have a strategy.
- Must have HTF trend alignment + level + momentum confirmation (all three required).
- Place a stop at structural invalidation (beyond swing high/low or the opposite side of the zone).
- First target at 1R; second target at next HTF level or ADR/ATR projection.
- No market orders inside the top/bottom 10% of ADR unless it’s a breakout retest with fresh momentum.
News & Events: Respect the Data, Not the Hype
Economic prints can change order flow in seconds. Ken protects capital by tightening participation around the calendar.
- No new entries within 10 minutes before Tier-1 data (rates, CPI, NFP, core PCE, central-bank presser).
- For open trades heading into Tier-1: reduce size by 50% or move stop to breakeven if ≥0.8R unrealized.
- After a shock print, wait for the 5-minute bar to close and the first pullback to hold before considering continuation.
- If the event flips your macro score (e.g., hawkish surprise), cancel leftover plans and re-score before the next trade.
Trade Management: Let Winners Breathe, Cut Losers Fast
Management rules turn good entries into a consistent equity curve. Ken’s approach is mechanical to remove second-guessing.
- Move stop to breakeven after +1R or a clean retest that holds; never earlier.
- Scale out 50% at 1R; trail the remainder below/above swing structure or a 20-period structure stop on the entry timeframe.
- Time stop: if price stagnates for 3 full ATRs of time without progress (e.g., 3× H1 ATR), reduce exposure by 50%.
- Hard rule: never widen the stop; exit and re-enter only on a fresh setup.
Multi-Timeframe Alignment: Only Trade When the Stars Line Up
Trading gets easier when your timeframes don’t conflict. This alignment filter keeps you out of chop.
- Execute long only if D1 and H4 are both up and H1 is either trending up or pulling back into support.
- Execute short only if D1 and H4 are both down and H1 is either trending down or pulling back into resistance.
- If D1 is flat but H4 trends cleanly, cut risk by 50% and target just 1R–1.5R.
- Skip trades when H1 structure is overlapping (equal highs/lows cluster) or when wicks dominate the past 10–15 candles.
Session Tactics: London vs. New York Behavior
Different sessions have different personalities. Ken adapts targets and patience to when liquidity is real.
- London open (first 90 minutes): prioritize breakout-retests from HTF levels; use standard size.
- NY open overlap: volatility spike rule—halve size, widen stop to structure, and target 1R–1.5R.
- Late NY: mean-reversion only if ADR is fully expanded (>100% of 20-day ADR) and there’s a clean fade level.
- No new trades after the final top-of-hour two hours before the session’s close.
Journaling & Review: Turn Trades Into a Feedback Loop
Edge compounds when you track and refine them. Ken’s journal makes patterns obvious and cuts recurring mistakes.
- Log for every trade: pair, bias score, setup type, entry/stop/targets, R planned, R realized, reason to exit, screenshot.
- Tag outcomes by setup (break-retest, continuation, reversal fade); review weekly win-rate and R expectancy by tag.
- Monthly kill-rule: pause any setup tag with win-rate < 35% or expectancy < 0.15R until you re-spec and backtest it.
- Create a “missed trade” section; if the same pattern appears 3× without you, add a rule to capture it next time.
Psychology & Routine: Make Good Choices Automatic
Your habits protect you when the market tries to bait you. Ken trims lifestyle friction so trading decisions stay clean.
- Fixed trading window; no chart-watching outside it. If you miss a setup, you miss it.
- Pre-commit to maximum screens: 2 timeframes per pair, 2 indicators (ATR + one momentum, optional).
- Use a pre-trade checklist; if any item is “no,” either fix it or skip the trade.
- End-of-day reset: summarize the day in 5 bullet points, plan tomorrow’s bias, then close the platform.
Playbook Templates: Make It Plug-and-Play
Templates keep you consistent and fast. Set them up once and reuse them every day.
- Bias card per pair: macro score (0–5), HTF trend (↑/↓/—), key levels, today’s triggers.
- Entry template: “If [trend] and price returns to [level] and [momentum] confirms, then enter with stop at [invalidation], 0.5% risk.”
- Management template: “Take 50% at 1R, move stop to BE after 1R or valid retest, trail remainder under/over structure.”
- Review template: “What matched plan? What didn’t? One thing to keep, one thing to change, one thing to test.”
Size Every Trade by Volatility; Cap Daily Risk Before Entries
Ken Chigbo keeps it simple: risk first, chart second. He sizes every position off current volatility, so a wild market doesn’t blow up the same risk that a quiet market would merely tickle. That means stop distance is dictated by structure, and position size flexes to keep the dollar risk constant. Before any entry, he hard-caps the day’s loss so one bad morning can’t hijack the week.
Chigbo’s playbook translates into concrete rules that traders can actually follow. Use ATR or recent range to set stops, then compute size so you risk a fixed fraction—think 0.5% to 1%—per trade. If you hit the daily cap (e.g., 2R or 2%), stop trading immediately and review; no “revenge” entries allowed. When volatility spikes, cut size in half or stand down entirely until spreads and slippage normalize.
Diversify by Underlying, Strategy, and Duration to Smooth Equity Curves
Ken Chigbo doesn’t bet the farm on one look or one market. He spreads risk across uncorrelated underlyings, mixes directional and mean-reversion ideas, and staggers holding periods so not everything wins—or loses—on the same day. The goal is a smoother equity curve that survives regime shifts without needing a crystal ball.
Chigbo’s approach is practical: if EURUSD and GBPUSD are moving on the same macro driver, he treats them as one risk bucket, not two trades. He pairs trend setups on higher timeframes with intraday continuation plays, and offsets them with occasional fades when ADR is fully spent. He also staggers duration—some positions hunt 1R quickly; others target swing levels over days—so realized P&L isn’t perfectly correlated. Net effect: fewer drawdown spikes, steadier compounding, and a mindset that focuses on portfolio risk rather than single-trade heroics.
Trade Mechanics Over Predictions: Rules, Checklists, and Repeatable Execution
Ken Chigbo refuses to guess the future; he executes a process. He starts with a pre-trade checklist—bias alignment, level, momentum, risk—and won’t click until every box is green. If one item fails, he skips the setup and protects capital. By standardizing entries, stops, and first targets, Chigbo turns trading from a hunch into a system that can be reviewed and improved.
During the trade, Chigbo manages by rule, not by feel. He moves to breakeven only after objective progress, scales at predefined R-multiples, and trails behind structure instead of hope. Post-trade, he logs screenshots and tags each setup so he can track expectancy by pattern, not memory. The result is simple: fewer impulsive errors, more repeatable wins, and a portfolio built on mechanics rather than predictions.
Prefer Defined Risk Setups; Avoid Unlimited Downside and Hidden Correlations
Ken Chigbo prioritizes trades where the maximum loss is known upfront and structurally contained. He favors levels that provide clear invalidation—once price violates that boundary, the thesis is wrong and the position is closed without negotiation. Instruments or tactics with theoretically unlimited downside get sidelined, and he constantly checks for stealth correlation so he isn’t doubling risk by accident.
Chigbo’s method is practical in fast markets. He sizes positions to the stop, uses hard exits rather than mental ones, and rejects averaging down unless a fresh setup appears with independent confirmation. If two pairs are driven by the same macro impulse, he treats them as one idea and cuts size or drops one trade entirely. The result is simple math: capped losses, fewer cascade drawdowns, and a portfolio that lives to fight the next clean, defined-risk opportunity.
Systematize Entries, Exits, and Reviews; Let Data Drive Adjustments
Ken Chigbo treats the trading day like a checklist factory: the same inputs, the same sequence, the same quality control. Before entry, he confirms trend alignment, level, and momentum, then programs the stop at structural invalidation and preloads 1R and next-level targets. If any component is missing, he skips the trade and protects the day’s risk budget.
Once in, Chigbo manages by the rules that he can audit later. He moves to breakeven only after +1R or a clean retest, scales partials at predefined levels, and trails behind structure instead of emotions. After the trade, he tags the setup type, records R-multiple outcomes, and reviews weekly which tags carry positive expectancy. The next tweaks come from those stats—not from vibes—so the playbook evolves with evidence while the core process stays stable.
In the end, Ken Chigbo’s message is disarmingly simple: make risk your cornerstone, not your afterthought. He sizes every position according to volatility, so the same mistake can’t cost more just because the market is louder. He treats correlation as a hidden tax, diversifying across instruments, tactics, and holding periods so bad days don’t become bad weeks. And he refuses to trade “feelings”—only trades that satisfy a bias, a level, and a momentum confirmation earn the click.
Chigbo’s “how” is pure process. Define risk at the chart’s structural invalidation, pre-clear your daily loss cap, and stop when it’s hit. Let the calendar dictate your participation around Tier-1 events, then manage winners by rule—scale, trail, and never widen stops. Journal every decision in the same format, tag the setup, and let those stats tell you what to double down on and what to kill. Do that long enough and the edge stops being mysterious; it’s just the by-product of consistent mechanics applied to clean ideas.
