Three Forex Trading Strategies You Can Take To The Bank

Hello and welcome to another edition of the bulls vs the bears. Today we’ll look at three forex trading strategies you can take to the bank. Sometimes you sit there thing about your trading strategies and a question pops in your head saying”Which three trading strategies would you I bank my money on to get me to the promised land?

This is pretty much what we are going to do. We are going to look at three trading strategies that, if we trade regularly will bring us a ton of profits. Even more important, they are strategies you should be able to recognize like the speed of light without thinking twice about it. So onward:

First Off:

Market Entry

One prerequisite for success  as a forex trader is to get your market entry right. The price action pattern must br so obvious that you can’t miss it. If you ‘re not sure of which price action pattern to choose, let me help you out.

You can get started with the  long-tailed pin bar pattern.  The long-tailed pin bar is a pin bar with a difference. Not to be confused with its sibling the pin bar, the long-tailed pin bar attracts a lot of attention with its conspicuously long tail. It looks so conspicuous that there is no way you can miss it. Now let’s take a look at an example using the USDCAD pair

Image result for long-tailed pin bar

Now this is what the long-tailed pin bars look like up close and personal at the end of the bullish trend just before the bears take over. The long tail  sticks out from the surrounding pin bars. It looks so obvious and conspicuous that there is no way you can miss this one.

It has a small, or skinny body and a longer wick ,hence the nickname, long tailed-pin bar(The ‘Small Body’label’ says it all).  When on a bullish trend the long tail of the pin bar  sticks out from the top  like a tower. However if it were on a bearish trend,the long tail will stick out from the bottom.You’d think it was doing a head stand.

Let’s look at another example of a long-tailed pin bar – this time a bullish long tail

Price Action Trading Strategy: How to use Pin Bars | Campforex.com

Here is a bullish long-tailed pin bar(as indicated by the blue arrow) formed at the bottom of the uptrend around the line of support.  The ,moment you see a long-tailed pin bar pop up on your screen just place your buy order at the tip of the tail. Do that and you should make yourself a decent profit.

Next let’s take a look at pin bars in the pull back strategy.

uptrend-pullback1.png

The pin bar in the pull back strategy offers numerous opportunities to enter trades. Notice  the clear entry Three Forex Trading Strategies You Can Take To The Bank in the uptrend withing the parallel channel. Pay close attention to the pullback within the pin bars. Their long tails are very much in evidence  When that happens you  make your entry.

So if you’re looking for a trading setup you can run with for the rest of your life  go with long -tailed pin bars and pin bars.

If you want to know more about long-tailed pin bars look up Long Tailed-Pin Bar – A Pin Bar With A Difference.

If you want to know more about pin bars  look up How to Prosper From Trading The Pin Bar

Next us is:

Money Management

Sure trade entries are important. But you’d be crazy to ignore the money management side of things. As a matter of money management is the most important aspect of forex trading.  Your future prosperity  rides on how well you manage your trades. Failure to take care of your trades could result in a huge crater in your account.

When  I talk about money management, I’m referring to  position sizing and risk reward.  You need to get these two component spot on if you want to thrive as a forex trader.

In case you have forgotten position is the number of lots you choose to trade. In other words position sizing is the size of the the position you choose to trade on the market. Now why is position sizing so crucial? Because this determines how much money you have chose to risk; the larger your position, the more money you are willing to risk. So keep note of that.

There is another reason why position sizing is  important. It’s has to do with properly adjusting your 1R risk per trade. It is absolutely crucial that you get this aspect right.  Failure to do that and your account becomes history.

Let’s take a look at at an illustration of position  sizing/risk reward in action using the EURUSD pair.

 

An Example of a Risk Reward Ratio

You see how the the risk reward ratio has been layed out at every ke level. You have the stop loss placed at the first key level of support. As you can see, profit targets have been set with different ratio levels from R/R1:1 all the way up to R/R1:3.

The trick here is adjusting your risk per trade. You should give your trades enough oxygyen to withstand any sudden 360  U-turns by the market.

Now let’s  look at how to plot the risk reward ratio for a downtrend  using the Fibonacci tool using the USDSD(Singapore Dollar) pair. Thr neat thing thing about this tool is that it helps you predict how the price will go, and then exits the trade before price retraces.

Here is how it’s done:

  1. Identify a trending market
  2. Draw the Fibonacci extension tool from the swing high to swing low
  3. Set your target profits at the 127, 138, or 162 extension (depending on how conservative or aggressive you are)

Use the same set of rules for the uptrend.

And Finally:

Daily Time Frames and High Probability

Probability the most profitable of the three trading strategies is daily time frames and high probability. Not only are you focus on trading the daily frames but you are looking  to trade high probability setups. With these setups, you are not looking trade 100 trades every week. But rather you are looking for a few profit blockbusters that can bring you huge profits in the long term.

Even more important, these setups help you to  keep your emotions in check. And you shed the habit of over-trading – The biggest killer of most traders  trading accounts.

Now let’s take a look at a daily time frame chart in action

Daily Pin Bar Forex Trading Strategy

 

Now notice the pin bar  entries at the key level of support. You can enter this trade. Let it run for a few weeks, go on vacation and come back to see a huge profit nicely tucked in your trading account.

Daily trading saves you from staring at your screen all day  scavenging for trades. And it tames your massive impulses when you feel a strong urge to stare at your screen all day. Even more important you have a better chance at prosperity long term. It’s a no-brainer.

 

That’s a wrap for “Three Forex Trading Strategies You Can Take To The Bank.”  The aforementioned strategies are the best ways to approach your trading day in day out. These strategies have proved to be reliable over the years and will serve you well for years to come.

Til next time take care.

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What Separates Price Action Event Zones From Support and Resistance Levels?

Hello and welcome to another edition of the bulls vs the bears. Today we are going to find out what separates price action event zones from support and resistance levels. Now you need to know price action even zones and support/resistance levels like the back of your hand. Now do I really have to go into what support and resistance levels are? I;m sure most of you know what these two levels are. If not, click here.

For your information, price event areas have been part of forex trading jargon for a quite while. It’s only recently that it’s being introduced into the forex trading main stream. So to avoid further confusion, I’m going to define what these two tools are. And then I’m going to dig deep into what separates these two wonderful tools.

First off:

What’s A Price Action Event Area?

Well, a price action event area is a critical horizontal area on a price chart where a price signal formed. In this same price action event area, you’ll also find a major trend move(uptrend or downtrend)  or sideways range taken shape. These event areas are popularly know as hotspots on the price charts. You should watch these hotspots like a hawk in case in case they retrace(or pull back). If price happens to to touch these event zones, you can be sure the major players will start considering their options. Now let’s take a look at a price event area through the eyes of a pin bar signal.

Event zone

Ladies and gentlemen.  Laying in front of you is an illustration of the price event area  through the eyes of a pin bar buy signal. The grey shaded ares represent both support and resistant areas.  The arrows pointing downwards suggest price retracing after price bounced off both support and resistance levels. Now take look at the bulls blasting through the level of resistance thanks to a pin bar formation at the level of support.

Keep a close watch on the  arrows pointing downwards  at the line of resistance. The line of support converts into a line of resistance, and the bulls break through this key level and head for the mountains on the back of another pin bar formation. And when this happens, just rack up all the profits along this trail. Understand one thing about price event areas. When you miss out on a price signal, don’t panic. Just wait for price to retrace in the same event area and then you make your move.

Next up is:

Support and Resistance Areas

I’m sure most of you know by now that support and resistance areas are static horizontal levels that are drawn across the price chart. Let’s take a look at support and resistance levels.

EURUSD Support Becomes Resistance

Ladies and gentlemen, this is an illustration of support/resistance levels, using the EURUSD pair. These are standard support and resistance levels drawn across highs and lows.

However, there are instances where the support and resistance lines are a more elaborate and longer in length than this example here, So don’t hit the panic button just yet. Now let’s look at support/resistance levels   a daily chart time frame, using the AUDUSD pair.

Image result for forex standard support and resistance levels on daily chart time frame

Ladies and gentlemen, here is another illustration of support/resistance levels using the daily chart time frame. Unlike the previous example, you don’t see any an event area in evidence on this chart. However, price event areas reflect a major price occurrence at the support/resistance levels. Plus, event areas carry a higher premium than support/resistance areas.

Now to the question du jour(of the day):

What  Separates Price Event Areas From Support and Resistance Areas?

This may sound crazy to some of you. But every even zone is a support resistance area, but not every support and resistance area is a price event zone. This begs the next question:

How Do I Tell The Difference?

You see in a price event zone, a price signal suggests a huge breakout from a consolidation area or key level. Let’s take a look at an illustration using the power of confluence.

Image result for forex price action signal in event zone

Ladies and gentlemen, right in front of you is an illustration of a price event area using the AUDUSD pair. The black circled numbers and the red arrows represent price signals long the key levels.

The price signals spark major breakouts at both support and resistance levels. And when  such an occurrence takes place, nobody has to tell you that you are looking at a price event area. If you want to find out more about multiple price signals look up Something Called Confluence.

Now let’s use the CADJPY pair to ascertain why support/resistance is not a price event area.

Image result for why support/resistance levels are not price event zones

If you look at the price chart you’ll see that there is no sustained consolidation before the breakout. Even worse, there is no evidence of a price signal triggering the breakouts in either the support or resistance levels. Even worse, we don’t see any price signal triggering a breakout  at neither the support nor the the resistance levels. S you  see why I say the support and resistance levels

That’s a wrap for “A Closer Look At Price Action Event Zones And Support & Resistance Levels.” As you can see price action event zones and Support/resistant levels help you understand the  overall dynamics of the formation of a trade. This give and go between the price signal/entry and the market conditions give rise to the high probability opportunities. Til next time  take care.

Til next time take care.

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How To Find The Best Trade Entry For Maximum Profits

Hello and welcome to another edition of the bulls vs the bears. Today we are going to find out how to find the best trade entry for maximum profits. Basically we are looking for lower risk and higher reward. Ask most people what their ideal low low risk and high reward is and they’ll say”A massive stop loss and massive profits.” But then somebody will retort saying”Yea. That’s easy for you to say.”

Sure these sublime trade situations are hard to find. They are like shooting stars. You find them today , and that’s it. But I’m hear to tell you that it’s possible to spot these sublime sightings. You just need to do a little digging. So without wasting much time, I’m going to show you two ways you can spot the best trade entry. And then I’ll show you a few illustrations of how to spot these trades.

Look For Obvious Price Signals

Look Obvious price signals. These signals should so obvious that  you can’t miss them. T  Most will tell you that the best time frame to spot these price signals is the daily chart frame. Because that is where all the excitement is. Do this over and over again, and you will get the hang of it.

Next up

Look for Factors of Confluence That Confirm The Price Signal

The next step is to look for factors of confluence that confirm the price signal. Basically you spot the signal, and then go back to another time frame and check to see if  the signal aligns with other key levels or has formed thanks to a pullback within a  trend, or that there is another factor of confluence in the chart.

Basically you want to find as much supporting evidence if you want to find the perfect trading point. Because the last thing you want to o do is to increase the risk:reward potential  just to satisfy your restless urge. Just stay within your trading plan and you should be good to go. Like I said last time, greed kills.

I will let you in on a little secret. You may not find the perfect entry out there, but you can definitely find trades that carry a lot of confluence(or weight) behind them.

Now that we’ve gotten the meat out of the way, Let’s get into some examples

Trader Jack_Le — Trading Ideas & Charts — TradingView

 

First is a clear example of a pin bar sell signal at the line of resistance. Pay close attention to the way the pin bar’s tail sticks out at the top. This obviously suggests a major price reversal, and it also tells you that price might be dropping pretty soon. This is pretty obvious it’s ridiculous.

Now next look at the illustration of confluence in the next pic

Using-Pin-Bar-Price-Action-Trade-Forex-Confluence

 

Right in front of us are three factors of confluence ina EURAUD graphic. This was a consequence of two zones acting as both support and resistance. If you ask me they give enough grounds to warrant a trade entry. Once again, see the way pin bar tail jut out at each of the three zones. That’s because of major pullbacks in each of the three areas.

Now these price signals are so obvious you can miss them. And when you get the entry right, expect to see a spectacular downward slalom run, as is the case at the line of resistance. See  the way the  bears just barge  through the resistance barrier like it’s stolen something from them. And when that happens it can only mean one thing – humongous profits.

Now let’s look at another example illustrating an entry tweak and potential risk rewards

How To Find The Best Entry Points For Your Forex Trades | Forex Filli

Ladies and gentlemen, we are going to look try to tweak our entry and improve on the risk reward potential on the trade. It’s going to be tough entering on the 50% retrace as price has barely touched the the first level of support at the bottom. The good news is you can still enter on the retrace of the pin(as indicated by the red arrow on the “Buy Entry”) and place your stop above the pin high(as indicated by the red diagonal line). Do this and you have yourself a strong stop loss and a decent profit.

We can see the same pattern at the RR2(Risk Reward) level. Stop loss is placed above the pin bar and entry is made just around the the third line of support. This sets the stage for a huge profit binge.

Finally let’s look at a bearish pin bar illustration whose profit potential is not so obvious

The Pin Bar Price Action Signal - Forex Price Action Trading ...

Here you see along – tailed pin  bar followed by a strong bearish pattern. These   bars formed after price broke and closed under this level previously. Now it wont be so obvious  since they don’t immediately scream “SELL US.” But the strong momentum behind the sell off should pretty much tell you it’s time to put in your sell order.

That’s a wrap for “How To Find The Best Trade Entry For Maximum Profits.” The main thing you should take away from this lesson the best trades form, backed by supporting factors better known as factors of confluence. With a little practice and knowledge of what you are looking for, this will be a cake walk for you.

Just look out for an intersection of a signal and  a key level. Or it could even be the intersection of a key  level and  a trend. Just trade like a  sharp shooter and wait for the right pieces to fit. Once the flash bulb in your head  goes off,  just pull the trigger and enter your trade.

Til next time take care.

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How to Manage Forex Trades The Right Way

Hello and welcome to another edition of the bulls vs the bears. Today we are going to look at how to manage forex trades the right way. Basically we are going to look at “Forex  Trade Management 101.”

Forex Trade Management has become the elephant in the room as far as forex traders are concerned. It’s not something traders like talking about. Now don’t ask me why. I have no idea. But I’ll tell you this. Fore trade management is absolutely essential for any forex trader. It’s the difference between exponential growth and your trading account taking a humongous hit.

Once your trade entry goes live, you have to  to play manager.  Unfortunately a lot of traders simply ignore this simple admonition. And when you do that it’s only a matter of time before you hit the self-destruct button. What looks like a winnable trade setup could turn into a losing cause if you manage your trade properly. It’s the nature of the beast.

So without wasting much time we are going to learn a few  forex trade management tips you can put to use in future trades.

Make Sure You Take 100% of  Your Winnings

You want to make sure you take  100% of your winnings.  Some of  you are “Of course I’ll take the profits. Why would I leave them on the table?”. Point  taken. However, you need to  take these all your winnings to cover your losses in future trades in case the market does an unexpected 360 on you. And so, you must be consistently making winning trades. Or else, you will find yourself in a hole on your trades.

Let’s say you lose a trade at 3% risk. With multiple profits from previous winnings, you can use them to absorb your  losses. Someone is probably asking”How do we do that? By using the breakeven option. If used properly, you can generate even bigger profits.  I hear somebody asking this question”What happens if I take 50% at the first profit target? I move my stop loss to break even, only to be stopped at break even?

Let’s look at this illustration in the graphic below

breakeven Forex trading

Ladies and gentlemen this is a classic illustration of a breakeven situation. As  I stated, 50% profit is  taken at  target one. But the rest of the trading position gets  stopped out at break even point. If  let’s say 3% was risked for the trade  you’ll end up with 1.5 % profit.

On the surface of things someone may say”That’s not too bad. However, things become a little hairy when you make a loss on the very next trade and lose another 3%. Next thing you know, you are  hemorrhaging money. That’s why it’s absolutely crucial that you make full profits regularly on your trades so you can absorb huge losses from these trades. Even more important, it helps in your overall risk reward strategy.

Next  We’ll learn how to manage trades the right way using a sell position and a buy position. Let’s start with: the

Stop Loss in Buy Position

Make sure your stop loss is at the tip of the downtrend. If you want to move your stop loss further up, make sure the pattern is higher than the current stop loss. You absolutely must not move your stop loss when you are in a buy position. Let’s look at an illustration

Ladies and gentlemen, this is the uptrend for the Eur/USD pair. As you can see the initial stop loss is placed at the tip of the down pattern along the line of support,. Now let’s look at the next chart to see the break even situation

 

This time the stop loss has moved higher up at break even point around the line of

resistance. Once either the profit target or stop loss is hit, the trade is completed and

the profit or loss will reflect in your account balance.

Last but not least is:

Stop Loss in Sell Position

If you find yourself in a sell position, you move your stop loss to the tip of every new pattern. If you want to move your stop loss to breakeven make double sure that the pattern is lower than the stop loss. Let’s take a look at the illustrations below.

 

 

This is an illustration of the breakeven situation using the the same EUR/USD pair. As you can see the stop loss has been placed at the tip of the pattern at the line of resistance. Now let’s look at the break even situation.

As you can see  the stop loss has  been relocated to the  new breakeven point at the line of support. And just like the buy scenario, once the profit target or stop loss is hit, you will make a profit or incur a loss. Of course, either of these scenarios will reflect in your trading account.

For information on trade management, look up What Next After Entering A Forex Trade?

That’s a wrap for “How To Manage Forex Trades The Right Way.” It’s absolutely crucial that you have a trade management policy when you trade. Failure to do that could bring you eternal misery, not to mention, a nuclear-sized crater in your trading account. If you utilize your breakeven policy properly you could make yourself a handsome profit and save yourself a humongous headache.

Til next time take care.

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