Hello and welcome to another edition of the bulls and the bears. This week we want to learn how to ride the big waves in the forex market. I’m not referring to those monster waves surfers ride on in the Atlantic. Riding the big waves is my subtle way of referring to spotting the big moves that occur on the forex market. Those huge moves are the type every trader can profit from, assuming your instincts for spotting these gargantuan moves are as sharp as a butcher’ knife.
Profiting from these monstrous waves don’t happen like Black Jack. You must think big when looking for these big waves. If you think these big waves are get rich quick 5 minute scalps, sorry, you are on the wrong blog. I’m talking about long term waves that drag on for weeks(sometimes months) and help you make significant profits from your trades.You must develop the mindset that you are going to strike while it’s hot with these big waves. That you are not going to settle for breadcrumbs and make a quick exit out of fear that your trading position is about to take a massive hit. Instead you will sit back and allow your trade to play pick up the profits.. This mindset is not a remote control button you just hit it. you will have to develop it over time.
So! Are you ready to make massive profits from these huge waves and ditch the breadcrumbs? Here are a few tips on how to catch the waves
Develop The Mindset of Holding A Trade
If you want to ride these monster waves you have to develop the mindset of holding a trade for weeks and months. You have to tell yourself” I’m going to ride this trend for all its worth. I’m not chickening out.” The key here is summed up in one word:PATIENCE! You must be willing to wait for as long as the wave is scheduled to last until it runs out of steam. I’m talking about digging into reserves that you never realized you had. Not the 5 minute or 10 minute daily patience that we exhibit everyday.
Let’s go down memory lane to the days when you were demo trading. You use to hold trades for days, weeks, months without blinking an eyelid. In fact You were busy with your day job you weren’t worried about whether your trade was going to crash or not. And when you did check on your account you discovered your profits were piling up significantly. You were probably like “Wow! I hope I can make this type of money when I switch live.
Do you know why you didn’t care?Because you weren’t using real money on your demo account. Since demo accounts hold virtual cash you didn’t feel the pressure of a live trade. You could afford to make money and lose money. It was more like trial and error for you.
However, the tension level goes up a notch when you create a live account. Instead of getting less involved with your trades you are getting more involved with your trades.To the point where you are having second thoughts about entering trades.Even worse you are jumping in and out of trades like a cat burglar and making all kinds of trading mistakes Consequently, you ended up missing out on the big waves. Even worse you lose a truckload of money as well.
What I’m trying to illustrate here is that the psychology of holding a trade on a live account is completely different from that of a demo account. In fact, it’s downright tricky. If you want to prosper on a live trading account, then you have to replicate the same ‘do nothing’ behaviour you exhibited when you were trading on your demo account. Yea I know you’re thinking “Look man, this is live money. I can’t sit and do nothing.” But the truth of the matter is you are going to have to absolutely nothing if you want to catch the big waves. Just go out and smell the roses while the profits pile up.
Now let’s take a look at an illustration of a huge wave
Ladies and gentlemen, I present to you a huge wave via the GBP/USD pair. As you can see this baby has been stretching for months. First we have the bears pulling a humongous 4000 pip move. Next the bulls take over respond with a crazy 3300 pip wave of their own and son and so forth.
You can only profit from such huge waves if you hold your nerve and ride these waves. It’s no use settling for breadcrumbs out of fear that your trading position will take a huge hit.You have to go for the entire cake when you trade on the market. You don’t want to be jumping in and out of trades(Who does that?) Just settle for one huge trade that runs for months and which will fetch you a huge profit. All you have to do is to set and forget and go to the beach while the market does the heavy work. You don’t need to sweat it at all.
Do Absolutely Nothing
Yes do absolutely NOTHING! You need to understand that forex trading is a true test of patience and mental strength. Let’ consider two questions. First,if the market does a sudden U-TURN against your trading position How would you react? On the flip side if your trade is racking up a handsome profit but your position has suffered that dreaded tsunami hit, how’re you going to react? Again I know it’s hard for you to stomach my suggestion but DO ABSOLUTELY NOTHING!
Some of you are probably thing “What the heck is this guy talking about?” You see, you can’t afford to let fear take your mind and body hostage when you trade. Closing out a potentially profitable trade for a small loss before your stop loss absorbs a hit is a classic example of what I’m talking about. You’re not allowing your trade to play out , and in so doing , you end up taking a forced stop loss.
Now exiting a profitable trading too soon can be just as deadly to your own prosperity and your peace of mind. If you have already established when you are going to take profit and head for the exits, please stick to that strategy. You will not be doing yourself any favors by pulling the trigger too soon. Just apply some logic and objectivity by laying out your entry and exit strategy before you make your trade entry. It will profit you handsomely in the long run instead of you being under the influence of Russian roulette. To make matter worse, you put your hard earned cash in harm’s way/
Let’s take look at examples of doing absolutely nothing
Ladies and gentlemen, here is another example of a long term bearish pin bar opportunity. via the GBP/USD pair. As you can see the long term trend is in one piece with the resistance levels holding the fort at
1.2950 and 1.3100. and the support keeping shape at
1.2820 and 1.2660.
Now the red circle suggests the bears are about launch a massive reversal. downhill. It means price is preparing to attack at 1.2820 and 1.2660. When such a scenario show up you either sell short at market price or wait until price gathers strength and then make your move. If this were live, you’d have made your move at 1.2820 and 1.2660. . Now see what patience and mental fortitude can do for your state of mind?Not to mention your trading balance?
Let’s look at another example of keeping your nerve while the opportunities reveal themselves.
This is another example of a significant wave through the EUR/USD pair. Keep your eyes on the”Sell Here” signal on the red bearish inside bar signal just above the huge red triangle at 1.3320. The gren arrow suggests the bears successful breach of the support level at 1.3320. Do you see the two previous pinbar breakout attempts that didnt work? Luckily the third inside bar breach attempt turned out to be the charm
See what the power of doing nothing can bring? Now had you jumped out of the trade you would have missed out of a rack of profits enough made your head spin. Whoever said patience is a virtue knew exactly what he was talking about. The same holds for riding huge waves waves in the forex market.
That’s a wrap for ”How to ride the huge Waves In The Forex Market”. The moral of the story is give your trades a chance to make you huge profits rather than you exiting early with breadcrumbs. You should decide ahead of time how much money you can afford to part company with before entering your trade. If you jump ship too soon before your stop loss get hit, you miss out on a lot of money.
Sure you can jump ship early to avoid full blooded stop loss- type losses. But when the opportunity to make a handsome profit presents itself, don’t jump too soon or else you’ll leave a lot of money on the table. For more information on catching the big waves, look up How to Spot High Probability Trades and Don’t Jet Out Of A Good Trade Too Soon.
Next time we’ll look at how to avoid exiting a trade early. I know I promised that today. This time I promise it’s coming on. Til next time take care.
Looking To Join The Forex Trade Gravy Train?
If you’ve stumbled in here looking to join the forex trade gravy train, here is what you need to do . First, look up Why Forex Trade Is So Popular. Next, you learn the fundamentals of forex trading by reading Forex Trading Basics – Top To Bottom Part I and Forex Trading Basics – Top to Bottom Part II .Next, you need to learn how to read candlestick patterns. They are the main feature of price action analysis. And you need to know what these patterns are telling you. To be able to do that read the following on Fundamentals of Reading Candlestick Patterns, Single Candlestick Patterns, Dual Candlestick Patterns, and Triple Candlestick Patterns . Also You Need To Know Ten Of These Candlestick Patterns . And finally If you want to give your trading skills an edge by relying on pure price action trading/analysis, instead of fancy forex robots and fancy indicators, get started with What is Price Action Trading?
Looking to get a leg up on price action analysis,?you need to learn How to Identify Support and Resistance Levels. And if you want to learn how to interpret trading zones, read up on Identifying Dynamic Support and Resistance Levels. Finally you should know How To Read Candlestick Patterns using Support and Resistance Levels.
However, if you only want to trade once a month and watch your entry rack up huge profits over a stretch of several weeks, consult How to Spot High Probability Trades. And if you are still not sure about price action trading, find out Why Price Action Trading Still Rocks . Dont let me stop you from reading the other posts as well. But the suggested posts above are the most important posts to get you started.
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Opening Of Live Forex Trading Account
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