WAIT !!!

2 TRICKY QUESTIONS For Your First before You proceed …

1)  How do You KNOW ” Whether ” A Trend Would CONTINUE In The Previous Direction ?

…ALSO

2) How do You KNOW ” Whether ” is it a REAL RETRACEMENT for a Trend Continuation ….

Any idea what is possibly the best answer to the 2 questions above ??

……Most of the ( struggling ) traders simply DO NOT have the answer at all for these 2 “ Tricky ” questions..

That’s why they would keep losing and losing while trading the market………due to the fact that they just cannot handle these 2 ” Tricky ” situations CONFIDENTLY…..

If You’re also one such trader who has been facing such challenges & dilemma all these while…..

…..Causing You to fail to achieve the trading success ( and Profits ) You truly want -  DUE to these 2 ” Tricky ” situations..

Then please read the entire article below as I share a few simple & effective solutions which You can use to  help overcome them in no time.

This is also the exact strategy I used to profit a total of 100 Pips from trading the USDCHF pair.

With this hint, I know there would be good SHORTING set-ups coming soon over the next few days.

So from that moment on…… I would begin to monitor for further HINTS & Price Actions showing in the market before I finally commit into a SHORTING trade.

Well….if You have been following my forex tips for sometime now.

You should already know that I am a very careful trader….

….. and I ONLY commit into a position provided there are ” multiple RELIABLE Price Actions ” in the market to support my intention.

Without appropriate and adequate ” Confluence ” from the market to support my intention….I would rather give that trade a miss…

….Than to jump in and just try my luck….

Not the way to do it if one is serious about succeeding in the long run.

Likewise for this USDCHF trade as well.

Let me show You every single ” Price Actions ” from the market that I took into consideration - BEFORE SHORTING this USDCHF pair next.

In order to do so, I will be monitoring for the price actions in both the 4 hourly & 1 hourly charts.

For now, I will be monitoring the 4 hourly until the market is getting ready to be SHORTED !

Here’s the first 4 hourly chart & what ” hints ” I look out for :

( click to enlarge )

The price movements within that 2 lines are what contributed to the BEARISH LONG CANDLE You saw on the daily chart earlier.

After that, price start to climb

( Retracement for the Trend Continuation ?? OR Total Reversal ?? We DON’t KNOW !! ).

So do I start to look for SHORTING Hints ??….. now that the price is in ( possibly ) a retracement after the bearish fall ?

NO…….NOT now though.

Because I need to ” confirm “ that there’s a high possibility of SELLERS in the market who are keen on SHORTING this pair further…

…BUT Aaron…..why need to do that ?

Here’s why :

You see………though I seen a BEARISH LONG CANDLE on the daily chart…

But the actual fact is that this USDCHF pair is on a long term BULLISH prevailing trend.

Here’s illustration to show You :

( click to enlarge )

So since I intend to SHORT this pair ….it means I am opposing the ” Prevailing Up-Trend ” in the market…..

By doing so…..

I need to be ” extra careful “ while waiting for as many hints as possible to confirm my SHORTING intention before jumping in.

“….so how do I confirm that majority of SELLERS in the market are willing to push this Down-Trend further ? “….

Simple..!

Just wait for the market to create a ” new LOW “…..on the 4 hourly chart.

Like this :

( click to enlarge )

And once a ” New Low ” is in placed..

It is indeed a good hint that the trend could possibly be pushed further by the Sellers ….” again “.

With the above… it is also my answer for the 1st ” Tricky ” question I prompted You at the start of this page.

Which is :

1)  How do YOu KNOW “  Whether  ” A Trend Would Continue In The

Previous Direction ?

But……..jumping into the market while spotting that ” New LOW ” is NOT SUFFICIENT for me to commit into a SHORTING position at this point though.

By doing so, I am NOT putting myself at an advantage that is.

With this advantage ….I mean this :

“..You want a proven & reliable set-up which enables You to WIN MORE than YOU LOSE…….most of the time !! “

What is that set-up ?

It is none other than a ” Price Retracement “.

So definitely having spotted a ” New LOW ” in the market.

We can only jump in for our SHORTING positions WHEN the price has Retraced to an appropriate level.

Remember this important fact : - Because it could be a total reversal instead of a retracement.

So it is really our responsibility to monitor every price actions closely and use them to help us confirm whether is it a retracement…..or a total reversal.

Do You know how ?

If Not….read on below please.

I shall share the important details which would answer the 2nd ” Tricky ” question too.

Which is this :

—————————————————————————————

That’s Right !!…..By taking advantage of a ” Price Retracement ” during a trending market…….the risk would be Minimal…..& at the same time the Rewards achievable would be Maximized………no doubt !

BUT…..

2) ….How do You Know ” Whether ” is that a REAL RETRACEMENT

for a Trend Continuation……..and NOT a ” Reversal ” ( that would

hit Your Stop- Loss ) at all ?

—————————————————————————————–

Here’s The Answer :

There are a few ” Important Hints ” that the market has to give me first…..in order to help me confirm that it is a Real Retracement . ( for this Bearish Trend Continuation )

————————————————–

1st Important Hint :

————————————————-

- The price has to retrace back ( as close as possible ) to the previous support level.

Like This :

( click to enlarge )

Without seeing the price hitting that ( important ) level at least…

I would NOT even consider shorting this pair again.

Why so…?

Purely because I like to put all odds on my side definitely.

That explains why I am never ” worried / fearful ” on any trade I decide to commit on.

That’s because I don’t compromise / deviate from my ” winning trading rules ” at all.

* smile *

——————————————–

2nd Important Hint :

——————————————–

- If price does gets there, it has to form price actions / patterns to show that Strong SELLING Sentiment is still in the market.

Like This :

( click to enlarge )

Price does RETRACED to the level I am watching out for.

( which is the level that coincides with the previous support level )

And even shown some sort of ” Buying Rejection ” at that level.

Which resulted in a ” Inverted Pin-Bar ” in the market.

These hints are being extracted from the 4 hourly chart.

So in order to monitor the more ” detailed Price Actions ” to help me get ahead of the majority…

I would drop to the next smaller time-frame which is the 1 hourly.

Here are the hints I am looking out before ” finally ” committing to the SHORTING position.

At this stage, I would consider it the ” most critical ” aspect of trading.

Due to the fact that if I commit one wrong analysis ( or trading on impulse )….it would result in a disappointing outcome end of the day.

Again…most ( struggling & failing ) traders actually DISLIKE this stage of the analysis because they would ALWAYS get very indecisive.

On FEAR that it would be yet another LOSING trade for them….just like the previous ones.

But trust me on this…

Once You KNOW what ” hints / price actions ” to look out for at this stage…

And then weight the Risk Vs. Rewards aspect….

There is really NOTHING to be fearful about then.

Because once You can confidently gather such ” Hints ” from the market in a Logical Approach Manner ….like me.

Your monthly results would be almost in the ” positive zone ” then.

Don’t believe ?

Put in the time and effort for now..

And then tell me about it in 2 - 3 months time ….* smile *

Do remember to try on a DEMO account if You’re doing that.

Or start ( really ) small if You want.

Trading on MICRO lots……with a starting capital of maybe USD$250.

Am sure You can afford to lose that amount if worst come to worst right !!

Just remember to ONLY use the amount that You can AFFORD TO LOSE !

—————————————————————————

1st Hint after dropping to 1 hourly chart :

—————————————————————————

( click to enlarge )

The ” yellow line ” is the same line I marked on the 4 hourly earlier indicating the PREVIOUS SUPPORT LEVEL.

( just in case You’re confused by it.)

And the price movements within the 2 blue lines are what contributed to the ” Inverted Pin-Bar ” on the 4 hourly.

When I noticed this ” Inverted Pin-Bar “, it is already 12 midnight at the country where I reside. ( Time zone GMT + 8 )

So I really can’t do much because I need to sleep by then.

I normally do not stay up past 1230 on most nights.

Sleeping early and maintaining a regular bio clock is one essential aspect of being a ” Healthy ( Winning ) Trader “……..agree ? * smile *

For anyone still struggling and trying to achieve the success they want out of forex trading..

Then all the more they should get enough ” quality sleep ” of at least 7 hours.

Best to be between 11pm - 6am interval.

Not related to the strategy I am sharing today….but just thoughts of mine to share though. * smile *

So by the time I wake up the next morning…..

This is what I saw on the 1 hourly chart for this pair …

———————————————————————-

2nd Hint After Dropping To 1 Hourly :

———————————————————————-

Like this :

( click to enlarge )

One terrible thing that can make most traders ” rather anxious ” is to spot a potential set-up JUST BEFORE it is time for them to rest for the day.

If he / she is willing to stay up ……there is NO guarantee that the market would show the ( required ) potential set-up they want.

OR…

The market could be in the ” Retracement / Sideway ” stage for 8 hours or more straight off…….until the next day active trading hours.

NOW……..are You going to sacrifice Your precious sleep considering there are so many uncertainties involve ?

I for one….would NOT sacrifice my precious sleep definitely.

For this trade, I would use a ” Sell - Stop Pending Order ( with very tight stop-loss because I am not there to monitor the price actions ) ” to catch the bearish move…. if it does MOVE while I am sleeping !!

But since it did not get trigger.

I shall not talk about it here.

Reserve that for another strategy.

As a matter of fact, I would much prefer to avoid using a ” pending order ” as far as possible though.

Unless I am trading the much bigger time-frame and ride the long term trend which could last for weeks.

But then…….that kind of strategy would need a much bigger risk ( stop-loss ) too…..& the good set-up does not happen as often as while trading intra-day.

Again….more on that on another strategy on ” SWING Trading “.

For now……let me continue with my explanations.

Here’s the illustration to help You recap :

——————————————————————————-

This is what I saw on the 1 hourly chart for this pair …

2nd Hint After Dropping To 1 Hourly :

Like this :

( click to enlarge )

———————————————————————————-

So do I jump in to SHORT instantly upon seeing that bearish candlestick at about 10am ( GMT 0200 ) while I check the chart ?

Of course NOT..

Every single decision I made as regards to trading must be based on the actual Price Actions in the market.

Then for this critical moment of ” deciding WHEN to SHORT ” this pair..

What Price Actions do I look for then ?

Here’s the answer for You :

——————————————————————

3rd Hint After Dropping To 1 Hourly :

——————————————————————

( click to enlarge )

For the ” final ” market hint which I used to support my SHORTING intention.

I am using a ” Trend-Line Violation ” as an indication.

Previously, the ( green ) line acts as a support for the price movement at this period.

So once ” Violated to the DOWN-SIDE “….it is definitely a clear indication that the sellers are coming into the market again.

If You notice on the illustration above again..

I only use the ” 2nd Bearish Candlestick Closed ” for my SHORTING Entry….

This is so because I want to avoid a ” False Breakout ” out of that channel.

False Breakout is very common in any financial market ( perhaps due to to Stop-Loss hunting by the brokers )….so I always like to ” confirm ” that I do not get caught by it unnecessary.

Anyway, the price did not fall too far from the first candlestick…

So all good.

I SHORTED at the price of 0.89734.

( 2 separate Lots as usual as I would be executing the ” Partial Exit ” technique )

How about the Stop-Loss placement for this trade ?

Without entering a stop-loss, it is just like driving a fast car WITHOUT a functional braking system.

When I am WRONG about a trade and it’s direction, I would want to get out as soon as possible in order to ” limit” the amount of losses that would incur.

And NOT to hold onto a losing trade….and let it drag on and on……

When that happens……I might as well CUT loss ” earlier “…and ride on the other side of the REAL trend……right ?

But I do not advocate guessing a stop-loss value to be used in any trade.

It has to be strategically place…

Best place is on the recent Lows….or at the the recent ” Price Pull-back “…

Not a 100% sure thingy….but at least if the price was to violate those levels.

I would want to play safe and get out to prevent ” entering into the wrong direction ” to drain my account further.

Here’s the ideal location I would place the SL for this trade:

( click to enlarge )

…Just above the recent price pull-back.

With a tight stop-loss value of 40 Pips .

( SHORT Entry @ 0.89734, Stop_Loss@ 0.90134 )

40 Pips as Stop-Loss for a pair like USDCHF is neither too big ….nor too small.

Just nice I would consider as the daily ATR is about 100 - 120 pips movement for this pair.

As I am taking advantage of the Price Pull-Back during a trend….so 40 Pips would be appropriate.

Having explained on the Shorting Entry & Stop_Loss needed….

What is another element that needs to be planned before committing into any real position in the market ?

Obviously it is the Take-Profit ( TP ) levels.

So next I would be explaining on that.

Here’s the illustration on how I plan my ( 2 ) TP levels to share :

( click to enlarge )

Since I am aiming on short intra-day moves on this USDCHF pair..

I am aiming for only 40 Pips for TP #1 - Which is also my Stop-Loss amount.

( once TP #1 profited, stop-loss order for TP #2 would be shifted to BREAKEVEN )

And 60 Pips for TP #2. ( which is 1.5 times my Stop-loss of 40 pips )

I am not including a TP #3 for this position because the major prevailing trend is NOT yet a Bearish one.

( meaning it is still an up-trend as shown on the daily chart )

So I would not want to include the 3rd Take-Profit target for this set-up.

Reason being is that though I can execute another ” Partial Exit ” with that during a trend..

But if I am wrong….then I would incur an ADDITIONAL ” Stop-Loss ” that comes with the 3rd order.

That’s exactly my thought ” just before ” I commit into this position.

Hope it has helped clarify on that aspect now……if You need to know.

* Smile *

So How Did This Trade Turns Out ?

Here’s the answer :

( click to enlarge )

Both my Take-Profit #1 & #2 have been triggered after about 9 hours of trading.

The most important element is when the TP #1 has been triggered…( meaning profit target hit ….)

The stop-loss of Take-Profit #2 has to be shifted to the ” Break-even ” point.

And I am using a special script to automatically do this task for me - So that even while I am sleeping, it can be fulfilled.

( ….According to the pre-set value I input that is. )

As usual, just like other strategies I shared previously…

…. I would always include the screen-shots of my actual ” Entry, Stop-loss & Take-profits ” to share as well.

( Earnings For 1st Exit Order )

( Earnings For 2nd Exit Order )

At this point, I have pretty much shared what I want to as regards to the ” 2 Tricky ” situations that caused most traders to feel dilemma and fearful when facing them.

Which results in illogical trading decision being made and lead to disappoint outcomes ….trade after trade.

One thing I am pretty sure here…

It is that….for anyone who is new to Forex Price Actions trading.

What I have shared above could be ” rather confusing ” to them.

If You’re also one such trader…

Then do make sure You go through a few more times…

And each time You’re reading a certain portion of my explanations above..

Do fire up Your chart….and try to look for ” similar set-ups ” on from the past results…

Most importantly while doing so….test Yourself on whether can You ALSO analyze the market the way I do.

This is one good way to learn.

Especially with price actions, You need to get familiar with watching the RAW market data - The Price Actions !

To conclude my sharing on this USDCHF strategy today.

I will be writing a summary of the ” Important Considerations ” I make during certain stages of the market analysis for this USDCHF trade.

If You need to go over what I wrote above again..

Then do read my summary below first as it would help You form a ” Proper Picture ” of what to expect at each different stage of the analysis.

————————————————————————————

SUMMARY On

…. WHY & HOW I SHORTED THIS USDCHF PAIR :

———————————————————————————-

Basically the entire USDCHF strategy is to help answer the 2 common

” Tricky ” situations that most ( failing ) traders are suffering from.

They are :

1)  How do YOu KNOW ” Whether “  A Trend Would CONTINUE In The

Previous Direction ?

…ALSO

2) ….How do You Know ” Whether ” is a Retracement  a REAL

RETRACEMENT for a Trend Continuation……..and

NOT a ” Reversal ” ( that would hit Your Stop- Loss ) at all ?

And with a winning trade that I nail on the USDCHF pair…

I find that the entire ” analysis ” really does require me to answer the above 2 ” tricky ” situations.

So I decide to write out this USDCHF strategy to share and help fellow readers in need.

Let’s begin….

1) Having spotted a LONG BEARISH CANDLE on the daily chart….

( click to enlarge )

…. I can start monitoring the 4 hourly chart for further ” hints ” to support my intention to SHORT AGAIN.

2) Upon dropping to the 4 hourly chart, the price then has started climbing upward……

But whether is it a retracement ( for a trend continuation ) ….or a Total Trend Reversal….

..We really don’t know at this stage.

( click to enlarge )

Yes, some traders would just jump in and start shorting once the price is at a certain FIBO level/s.

But that’s not my style.

In fact, I have to be ” Extra Careful ” instead just like what I mentioned above earlier…

Because on the daily chart, the prevailing trend is still on the BULLISH side..

( click to enlarge )

If I am SHORTING this pair now, I am opposing the prevailing trend that is.

So taking that into account, I have to monitor further for ” as many hints as possible ” before committing.

With that….it would bring us next to one of the ” Tricky ” question I asked You at the start of this page..

That is :

1)  How do YOu KNOW ” Whether “  A Trend Would CONTINUE In The

Previous Direction ?

Read below for my step by step explanation on this.

3) While still using the 4 hourly chart, the price climb to a certain level & then PLUNGED downward……breaking the previous support…and forming a ” NEW LOW “.

( click to enlarge )

With this ” NEW LOW ” in place, it is a good hint for us to confirm that - This Trend would ( most likely ) CONTINUE in the previous direction.

Because the Sellers are still keen on pushing the price Lower…

4)  With that ” NEW LOW ” confirmation, we can then monitor for a good price level to get in to SHORT this pair.

However….

For any position we wish to enter, we have to always capture a set-up that enables us to trade with ” Minimum RISK….yet ( Realistically ) achieving the MAXIMUM Rewards ! “

And the only set-up that would make this possible is with the ” Price Pull-Back ” during a trend.

With that….it would bring us to the 2nd ” Tricky ” question I prompted You at the start of this page.

That is :

That’s Right !!…..By taking advantage of a ” Price Retracement ” during a trending market…….the risk would be Minimal…..& at the same time the Rewards achievable would be Maximized………no doubt !

BUT…..

2) ….How do You Know ” Whether ” is that a REAL RETRACEMENT

for a Trend Continuation……..and NOT a ” Reversal ” ( that would

hit Your Stop- Loss ) at all ?

5)  In order to convince myself that this is a REAL & VALID Retracement for the trend continuation…..

2 important hints need to happen in the market :

i )  Price has to ( at least ) hit a level that coincides with the previous Support.

ii ) Once that happens, market has to show a certain price actions / patterns that reflect ” Selling Force ” coming into the market.

Like this :

( click to enlarge )

6) Once the 2 important hints have formed in the market…

It is still not enough for me to get in to SHORT.

Because though there is a ” Selling Force ” detected at the level I wanted…

But that does not prove that majority of the sellers are going to SHORT at that position too.

So it is really critical to switch to the next smaller chart ( 1 hourly ) and then watch for the ” commencement of the Selling Move “….

For this USDCHF trade, I spotted a ” Trendline Support ” VIOLATION..

( click to enlarge )

With that in sight, I know it is time to SHORT the market then at Price 0.89734

( after also considering the Stop-Loss needed and WHAT Take-Profits to aim for at the same time.  Read below )

7 )  What Strategic Stop-Loss Value Is Needed For This Pair ?

Using a ” wild guessing value ” for stop-loss could work sometimes..

But in the long run, it would not be a good idea as there is no consistency in the ” risk ” involved with all the positions we enter.

Stop-loss should be placed on a ” strategic ” location in which IF VIOLATED…..it means it is better for us to get out.

And one such strategic location would be on the ” recent price pull-back “.

Like This :

( click to enlarge )

8 ) With Entry & Stop-Loss determined, the 3rd essential element would be the Take-Profit Targets.

Without planning the target levels….market could hit and then BOUNCE up and turn against YOU.

So though the market has actually reached the level You wanted..

But because You did NOT Pre-set in Your trading platform..

You are not enjoying those profits ” automatically “.

So whenever I am trading on intra-day basis..

All 3 parameters - Entry, Stop-Loss & TP levels would be determined at the same time.

As usual, I would be executing the ” Partial Exit ” technique.

This is mandatory as the success rate is higher….and I can ” Lock in & SECURED Pips ” as the trade goes my way.

Here’s the TP levels I planned for this USDCHF trade :

( click to enlarge )

8 ) How Did The Trade Eventually Turns Out ?

Here’s the answer :

( click to enlarge )

One last point to note here before I pen off.

Once You can confidently handle the ” 2 Tricky ” situations each time You’re trading the forex market…

Especially on a short-term ( intra-day ) basis…

Your trading results would take a 180 tremendous change for the better.

No joke.

Because for myself, my success also came once I can ” naturally ‘ analyze the market the way I shared above..

It does not happen overnight definitely…

But if You master one element at one time…

Yes…just one….

Soon…..You would be able to put them ALL together to form a perfect winning formula as well.

I am also rather ” fearful ” about learning the UNFAMILIAR then….which was 5 years back while still a struggling newbie.

In fact I am worst…..

……because I do not have someone to share such ” step-by-step analysis & the right decision making process “ to me then…

I rely entirely on my own trial and error to gauge what’s wrong….what’s right…

And most important….what’s going to be RIGHT IN THE LONG RUN …

That’s truly on a ” Self-Educated ” basis.

Lots hard-work….no doubt.

But I am glad I learned on a self-educated basis when I look back now…because I actually ” feel & notice ” things that cannot be learn elsewhere.

That’s a fact.

I can ” feel ” the market sentiment better in the process.

Especially when I am relying on nothing else but ONLY the Price Actions in the market.

By doing so, I am very customized to extract the ” real hints ” from the series of RAW Price Actions data !

And by doing that again and again on a self-educated basis…..I only get better and better week after week.

So if You’re also aiming for be a competent Price Actions trader…

Don’t give up.

Keep up the effort and stay motivated ya.

One day….I am sure Your hard-work would be rewarded….many many times…* smile *

Well…needless to say….

Earnings like this would be day in day out for You as well !

( Earnings For 1st Exit Order )

( Earnings For 2nd Exit Order )

And the true beauty of being able to handle these 2 ” Tricky ” situations is that ….

…You can almost trade on any currency pair You like.

Using the same analysis & decision making process to handle the 2 ” Tricky ” situations.

Which also means…..earnings such as the ones I earned for this USDCHF trade of about Usd $5,641.00 …..could then be profited….again and again.

Of course without the ” Fear, Dilemma & In-decisive-ness “ You used to suffer from ….previously.

Alright…so much for this intra-day Strategy which I used to grab 100 pips out of the USDCHF pair “…

I shall pen off now..

Thanks for reading this far..

To Your ( absolute ) FOREX SUCCESS,
- Aaron Tan ( your trading friend )

It is already a very obvious fact that being able to ride on the Strong Trending currency pair in the forex market…

The rewards ( Profits ) that one can achieve is indeed Very Very Good….

But how good is good then ?

2x…..3x…..4x…or even 8x Your initial investment is very realistic once You know how to do it…..

……And most importantly - Knowing how to detect such STRONG TRENDING currency pair is the key here….

Like This :

With a STRONG trending currency pair like the one above…

Imagine if You invest just 1 standard lot……and by nailing 800 Pips from such Strong

Trend…..do You know what is Your ” rewards ” like ?

Yes…..that would be about 8 times MORE THAN Your initial investment.

Which calculated to be approximately USD $8,000 with $1,000 investment..

Or what most investor like to consider it as ” 800%” RETURNS….

Definitely Very Profitable once You know how to detect such STRONG Trending currency pair too - Which is what I am about to show You in this article. * smile *

HOWEVER….Most Traders Would FAILED Miserably :

Here’s why ..

Almost every traders who jumped into this forex trading game would have heard of this sentence :

” Trend if Your Friend……Just Follow The Trend ! “

…..at some point during their learning journey….

I am sure this sentence is very easy to understand by anyone as long as he/she understands simple English…..agree ?

BUT……how come majority of the traders only failed miserably and always NOT getting the results ( massive pips ) they truly desire …?

Or…..if they are lucky to jump into one such trend…..but most of the time, the trend just DID NOT move as much as they would like it too…..and ONLY to see all the profits accumulated earlier given back to the market when it rebound the other way…

Hmmmm…..what is the main problem here now…?

Are You also facing such frustrating problem currently or previously…?

That is - You would like to ride on the MASSIVE Trend in the market…..because You know the rewards are very good…..and best of all….it requires very little time on Your part to monitor  because You would be trading on the bigger time frame…( daily chart )

At most spend about 10 - 15 minutes to monitor each day….that’s it..

That is one of the biggest and most attractive benefit from riding such MASSIVE TREND in the market……no doubt about it….

But what’s the main key to succeed with Spotting Such Strong Trend then ?

And I would say…..it is about ZOOMING in on the ” Really Strong Trending ” currency pair…..in order to ride on those MASSIVE PIPS….and not just seeing a WHIP SAW market giving You undesirable fear and uncertainty…..

……making You want to pull out Your position most of the time…

The truth is that being able to scan for such STRONG TRENDING currency pair in the market can be considered rather ” tricky and challenging “ to most traders in fact…

As such, they would rather not do it…..although in the bottom of their heart….they really want to profit from such lucrative strong trend very much….

If You are also facing such confusions but at the same time, You are also one of those that would like to know how to scan for such Strong Trending currency pair to ride on….

Then read on as I am sharing the step-by-step explanations below.

There are in fact a few techniques I am using to scan for such strong trends…( without using any fundamental or reading complicated news….)

And today, I would be sharing on one such technique which is direct and very simple and yet fulfill the objective of spotting such strong trend You would like to profit from.

Here’s How You Do It :

In order for You to gauge ” How Strong ” is the currency pair….

We would be using 2 EMA to help with the tasks namely…

200 EMA   ( Turquoise )

30 EMA  ( White )

And all the charts we would be using are the DAILY time frame ONLY….

what You would want to find out is very simple…

Basically You would be comparing 2 different currency pairs and then grab the ” hints ” from there..

Example :

Let’s say the EUR/USD is in a very Strong DOWN-Trend…

At the same time…..the USD/CAD is in a Very Strong DOWN-TREND As Well..!

What does this tells You if You put the EUR/CAD together ?

Of course the pair EUR/CAD would be in a very ( very STRONG ) DOWN-TREND too right ?

Why so ?

Let me explains on this to help You understand better :

You see…..

When EUR/USD is in a strong Down-Trend ( daily chart )…..it means that the USD is Stronger than the EUR right ?

When You SELL EUR…..and BUY USD….it resulted in a DOWN-TREND..

At the same time…..You also spotted that USD/CAD is in a very strong DOWN-TREND too…

So it also means that USD is not WEAKER than the CAD…

Wow…..do You get the ” Obvious HINT ” here already ?

The CAD is so much STRONGER than the EUR….!

And if You pair the EUR/CAD together…….what would be the TREND like ?

See it for Yourself below ! * Smile *

See how strong the DOWN-TREND is now for the EURCAD from the illustration above ?

See how steep the gradient is for the 2 EMAS….?

POWER isn’t it….? * smile *

Now You understand why the conventional saying of : ” TREND is YOUR Friend…..Just Follow The Trend ” holds TRUE for so many decades !

So basically to make Your scanning easier…

You should inter-scan 2 or 3 of the different currency pairs with ” One Common ” Currency in there..

Maybe for a start….You can start with the USD…..since it is the most commonly traded and liquidity is very good.

You can compare for example :

” Gbp/Usd….Aud/Usd….Usd/Jpy…Eur/Usd….etc….etc…”

And then deploying the same technique of comparison just like how I did for the EUR/CAD above earlier…

Once You have gotten one such pair which You think would be TRENDING strongly…

You can then open up the chart….and plot the 2 EMAS ( 200  and 30 ) on it to see how steep are the 2 lines…

Most of the time…..if You see them as steep as the EURCAD example above…

You can almost sure that this is one currency pair that is TRENDING strongly…

And the next thing You need to do is of course to ride on it and grab the MASSIVE PIPS out of it…

But of course, You cannot simply just jump in and hope that everything would be fine end of the day..

There’s always a slight possibility that the trend would reverse or RETRACE quite abit before resuming in the prevailing trend again…

So making sure that it is giving YOU a good RISK/REWARD ratio is definitely essential here.

And of course….in order to reduce Your risk to a minimum….it would be good to enter into a position after the market has retraced to at least the 50% level or slightly more at 61.8%..

In this way…..at least You can grab more Pips because You are not selling at the bottom….but rather at a much higher price…..( if it is a down-trend….and vice-versa for Up-trend )

Simple isn’t it this technique on scanning for Strong Trending Currency Pair ?

Go give it a try on a DEMO account on the next trading day….and get more confident with such scanning…

Trust me when I say this :

…..By the time You can confidently ZOOM in on such ” Very Strong Trending ” currency pairs too….nailing those MASSIVE Pips in the market ( 200,300, 400 or even 800 Pips ) would not be a challenge to You anymore then….* smile *

Can You imagine how Your trading account would be GROWING then ….? LOL

How About Earnings Like This ?

( click to enlarge )

Yes…..this is the real screen shot of the earnings proof from ” Shorting ” the EURCAD…

( which is one of the LIVE trade I had )

Don’t get me wrong here…..as I am not trying to brag or something by showing this earning proof….

But rather….I would like to convey that fact that nailing such MASSIVE PIPS ( such as 659 Pips ) in indeed very realistic and NOT a challenge to me anymore as I understand how to spot for such Strong Trending Currency Pair…

Don’t believe that it can be done using the simple & proven technique I revealed above ?

Try it and You will know the truth ….! * smile *

In this post, I will be sharing a rather rare but ” Profitable ” forex trading strategy with You guys.

This is a trading strategy which takes advantage of the ” Gap/s ” in the forex market …( When You spotted one such ” Gap/s “…)

As You might already know that the forex exchange is a 24 hours market and that is why ” Gap/s ” is hardly seem in this market but ( maybe ) occasionally on Monday when market is open again after the break over the weekend.

The strategy I am sharing below is one that takes advantage of such Gap/s in the market and I managed to nail a nice 108 pips trading it.

Before I go straight into the ” details ” on this Gap/s forex strategy……do allow me to share a personal story here first with You….( don’t worry…just a short & sweet one…* smile * )

If You have been reading on my Forex Trading Empire blog, You would know by now that I am a strong believe of  PRICE ACTION Strategies.

In fact, it is by mastering such Powerful Price Action strategies that gave me a major turning point in my forex trading ….and with that….I mean ” finally get to see the results I long for & became a successful forex trader “…

( …Which ultimately enables me to quit my day job as a technician and trade forex full time…! )

So having known that I have sort of ” already mastered ” Price Action trading, some fellow readers actually wrote in to me asking for strategies to trade such ” Gap/s ” in the financial market.

And as I mentioned above that in the forex market, Gap/s is actually very rare except on Monday perhaps ….( or after a long holiday break for the market…)

Hence, these readers who wrote in to me are mostly ” stocks ” traders ! * grin *

Yes….in the stocks market, seeing such Gap/s is like seeing the ” forex market WIHOUT Gaps”…

It is THAT COMMON in the stock market..

This is so because the stocks market operate just like a day job kind of timing - Meaning the market would be closed when it is time for the employees to knock off….

Hence after this so called ” off ” period and market re-opened again, it is very normal to see Gap/s in the market for stocks traders..

So having read through their request, I begin to look out for a GAPPING market condition in the forex market then…..as I would like to write about a forex trading strategy on that to share with You guys..

Although it is rare to see Gap/s in the forex market, but once You learn this strategy from reading this post…..AND if You spot a Gap in future, You would know HOW to grab those pips and add some nice profits to Your pocket too !

Well….unless You don’t like to win and nail profits from the market….else I am sure any fellow forex traders would be more than keen to learn a forex strategy that works ( like a bang ) right ! )…* smile *

Alright….having done with my story…( told You it’s short and sweet ), now let’s get into the main strategy to trade the GAP in the forex market now..

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Trading The GAP/s in the Forex Market - Step By Step Strategies Revealed

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Again….just like what I mentioned in some of the forex strategies posts…

I will ” try ” to make it as easy & simple to understand as possible ok……( of course not too long winded I know…)

Just make sure You really read till the end of the post and read every single word so that You can grasp the entire concept of this strategy..

If needs to….just read 2nd…3rd….or even 5th times  - TILL You understand …..* smile *

It’s FREE to do so anyway….* grin *

OK…..let’s get serious now…

Here’s an screen-shot of where I ” Enter & Exit ” for this strategy - With Stop Loss planned too  :

( Nailing 108 Pips Profits )

If You have not trade any ” Gap “  that happens in the forex market before and wonder is it hard to master at this point of time..

Then I shall assure You that it is NOT That Hard once You can understand the ” concept and psychology ” behind this strategy.

Read on below..

It is an absolute fact that almost everything in this world would undergo a state of change almost every single second..

For example :

- Human would age….

- Those cute little babies would grow day by day …

- After the rain ….there would be sunshine..

- Almost nothing could possibly stay the same state forever…( generally )

However….there are some exceptional here though..

And these are the ” PSYCHOLOGY ” of the market..

As long as it is humans trading the market….there bound to have both FEAR & GREED involve..

This is especially so when  we are trading REAL MONEY here…..and there’s a BIG POSSIBILITY that anyone can lose money in the process……and basically Nobody likes to lose money in anyway….

Hence, the elements of  FEAR & GREED would always EXIST in any financial market….and especially true in Forex - A market where the volatility is so high !

So for this forex trading strategy that take advantages of the ” Gap/s ” in the forex market, it capitalizes on the Human Psychology as well..

Which explains why when there is a GAP UP , most of the time this GAP would get filled by the SELLERS ( bearish sentiment ) in no time….

This means when You can also read certain Price Actions & ” hints ” in the market, You would know whether how to trade this strategy profitably too.

Read on below as I share how to extract the ” hints ” from the market to put all odds on my side…

In fact, on that particular Monday when the forex market opens again, only the few EUR pairs are having such Gap/s…

So why do I decide to trade the EUR/JPY…..but NOT the EUR/USD then ?

Here’s my reason :

I do not like to trade currency pairs which are TOO CLOSELY associated….

Which in this case , the EUR is the common ” based ” currency….so they are definitely closely related…

If I decide to trade both pairs, then the risk would be DOUBLE as well….as both tend to move in the same direction……so if I am wrong…..both would give me headache at the same time…..!

As a full time trader now, I treat the ” RISK ” that I would encounter with extreme cautious and of course I would respect such RISK too…..

I always believe in NOT going against RISK that can be foreseen and NEVER PRESUME everything would be fine……

So for this situation, I decide to choose the EUR/JPY to trade because by looking at the USDJPY chart, it is a clear DOWN TREND / DOWN CHANNEL during that period…

Like this :

From the above screen-shot, You can also see that the USDJPY pair is in a nice DOWN CHANNEL for that period..

When USDJPY is in a DOWN-TREND….

Is USD STRONGER…….. Or JPY STRONGER ?

Am sure You would agree that it’s the JPY that is STRONGER ….right ?

JPY is Stronger than the USD ( which is weaker )…..that’s why it is a DOWN TREND for that period..

So since I know that generally the JPY is stronger than the USD…

Which do I choose to ” SHORT ” then ?  Is it the EURUSD……OR EURJPY ?

Of course I would choose the EURJPY to ” SHORT / SELL ” again for this strategy right since JPY is stronger and that would give me a better chance to succeed..

In forex trading, it is all about ” Knowing ” the PICTURE in the market and then use all these small proven hints to help You make better ( Profitable ) trading decisions end of the day….* smile *

If You are not trading with such confidence yet…..don’t give up…..because I believe if I can do it….You Guys Can Do It Too !  ( and I am not a university graduate ..NOT even having any financial background )

Hang on to Your goals in life and don’t let go…..that’s already half the battle won !

Successful people might not be as intelligent as You are…..but because they DARE to dream big and then work towards that BIG GOALS in life & Achieve SUCCESS…..no matter how hard it is……agree ?

Same for mastering this forex trading too…..! * smile *

Alright….enough of that ” positive thoughts ” stuff….let’s get back into the forex strategy on GAP.

Now that I decide to trade ( SHORT ) the EURJPY instead of the EURUSD ….though both pairs are seen with GAP/s in the market..

Next are the most critical elements to consider and they are namely :

1)  How Do I Decide When To Get Into the Trade To SHORT ?

2)  How Do I Decide What ” Take Profit ” Target To Aim For ?

3)  How Do I Decide What ” Stop Loss ” Target To Use As Well ?

Next coming up, I would be sharing on all these in a step by step manner…

Read On…

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How Do I Decide When To Get Into the Trade To SHORT ?

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Before anything, I need to highlight an important point here first about this EURJPY pair..

It would be good for YOU to consider this ” important point ” that I am sharing now for Your own tradings in future - To increase the odds of winning for Yourself….

You see….as I mentioned earlier that I would be ” SHORTING / SELL ” the EURJPY for this GAP strategy..

BUT….what if I tell You that this EURJPY pair is technically in an UP TREND ?

Does that means I am trading Counter Trend ?

Is that very risky like what other traders said so…?

If You are also wondering ” how uh “….

Don’t worry for now….as after You read my step by step explanations below, Your doubts would be all cleared by then….* smile *

Let me show You the Up-Trend/ Up Channel ( Screen Shot ) of This EURJPY :

As You can see too….this EURJPY is generally in an Up Trend as shown by the UP Channel ..

So although I am taking advantage of the ” GAP ” that happened  in the market…..I cannot just simply jump in and trade without confirming my ” rules & checklist ” though….

If  any trader simply ignore to go through the rules and checklist and hope that everything would be fine end of the day….then that’s the WRONG way to trade I must say..

Long term wise……this type of trader would only SUFFER…..and most likely GIVE UP this forex trading entirely because of the FEAR after losing all the money..

So are You one such trader ?

Hmmm……Not too late to know what’s RIGHT though…..* smile *

For me, I like to use ” CONFLUENCE ” from the market itself to convince myself that it is a set - up that is worth trading..

Yes…..that would include weighing all the RISKS INVOLVE….as well as the Rewards that can be expected…

Here’s how I do it :

1)  Although this EURJPY is in a general UPTREND……BUT  the level that I intend to SHORT actually coincides with the previous ” Critical Resistance Level “

( This is the resistance level that we saw about 400 Pips PLUNGED previously..)

So it is definitely one resistance level I would watch for again this time.

Here’s an illustration to show this ” Critical Resistance Level ” :

2)  Furthermore, this level that I would like to SHORT actually ” also ” touches the Upper Limit of the channel I drawn ( refer to illustration above )…

And the best thing is that a perfect ” PINBAR ” is seen at that upper trendline too - With The Price FAILING To Close Above that trendline !

This is definitely a good sign of a ” Reversal “ for me to SHORT….* smile *

But of course, with the PINBAR alone, it is NOT good enough for me to SHORT yet…

I need the next candle to be a ” BEARISH closed ” to confirm….

And just as I anticipated, after 4 hours, a BEARISH candle closed is spotted - Which is exactly what I am waiting for as a form of ” confluence ” indeed.

As such, I SHORTED 2 lots right at the closed of that Bearish Candle ..

Here’s a screen shot to show :

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Next……How Do I Decide What ” Take Profit ” Target To Aim For ?

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Too many traders commit the mistake of using ” any number ” they like while planning the Take Profit Level WITHOUT considering whether is it REALISTIC or not based on the Price Action in the market.

That is truly wild guessing or just trying their luck ….and hoping that everything would be fine…and their so called ” simply guessing numbers ” kind of Take Profit target would be hit somehow…

Hmmm….I do not like this way of trading definitely as I prefer to be in control instead of ” Hoping  that everything would be fine “….

In order to be in control and feeling really confidence about any position I take…..of course I need to use proper techniques to analyze the Price Action on the market for my ” numbers  ( Take Profits Target in this case ) to be used…

Here’s how I try to ” Anticipate ” what would happen next based on the market flow ( & trend characteristic ) :

Considering it is an uptrend channel for this EURJPY pair…

It is important that we consider whether the Take Profit target we planned to aim for is realistic or not…

( And NO…..we don’t do that by wild guessing or relying on luck …)

But try to anticipate what the market is likely to behave next based on the current Price Action..

Yes….in order for anyone to ” anticipate ” the way I do….it is paramount that Your chart reading and technical analysis skills must be good to a certain standard..

Or else…it would be hard for You to dissect the market like I do…

If You are not at that level yet…..don’t worry….just keep reading from my forex strategies and soon You will get more and more familiar in the process.

Ok…..since I am SHORTING this pair and it is technically on an uptrend…….BUT I already have all the ” confluence ” in place to support my SHORTING BIAS…

It is time to plan my Profit Target now…

Let me first consider the WORST CASE scenario ….

If this drop is just a retracement to the 50% level……can it hit my Profit Target ? - This is my first consideration since I am planning to exit right at the BOTTOM OF THE GAP.

And if You refer to the above screen again, You would see that even if it is just a RETRACEMENT to 50% before resuming Uptrend……My Profit Target Could BE HIT though…….which is good ~!

Of course the other situation would be that Price would plunge to the Lower Channel limit before bouncing up again….BUT this is not my concern as I am only trading the GAP.

So upon considering the worst case scenario, I planned my Take Profit target ( TP ) at the Price 125.900

Here’s an screen shot to show :

Do note that the ” ACTUAL BOTTOM Of THE GAP ” is lower than 125.900…..but I like to give it some allowance by NOT planning exactly at that edge…

After all… forex trading is just a game of WINNING the probability as many time as possible ….again and again to make money every month.….right ! * smile *

Now that we know we are SELLING / SHORTING this EURJPY at Price 126.98…

And aiming the Take Profit Target at Price 125.900..

What else we need to do next ?

The STOP LOSS point of course…….( unless You don’t like to use one…..! Hmm….But I DO HOPE You at least have a Mental Stop Loss Level …….)

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Last Point…….How Do I Decide What ” Stop Loss ” Target To Use As Well ?

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When mentioning about these words ” Stop Loss ” to traders…..it would somehow trigger mixed feelings in each individual…

Why so ?

Because some traders would ONLY feel comfortable when they are using a pre-set stop loss level….

Whereas some others might be comfortable with just a ” Mental Stop Loss “…

On the other hand……some would even go WITHOUT a Stop Loss level - BECAUSE they have been getting hit and hit again until it made them lose confidence with using a Stop Loss now……Arghh!

I must admit that placing Stop Loss level ” Correctly “ can be a REAL CHALLENGE & TRICKY for most ( struggling ) traders.

Using too tight a Stop Loss…..You might get hit….again and again only to see the trend goes the direction You previously wanted..

On the opposite, if You choose to use a bigger Stop Loss, You could not achieve a Good Risk/Reward ratio for Your trades…….

Hmmm…..that’s really frustrating I can understand…… as I also suffer from these problems years back before I succeed with this forex trading.

But once I understand these 2 elements, I begin to see good success :

Element #1 ) The sole purpose of placing a Stop Loss is to ” Protect Our Capital Should The Trade Goes Against Us - Because We Are Wrong About The Direction “

Element #2 ) The Stop Loss level should be placed at a level that the Price is NOT / Less Likely To Breach..

If You allow Yourself to understand these 2 elements and adhere strictly to them for all Your trades…..

…..then Your trading confidence would improve significantly and the fear of seeing Your Stop Loss hit again and again previously would be progressively diminished too by then…

So for this GAP forex strategy, how do I decide ” where ” to place the Stop Loss level in order to obey the 2 essential elements I shared above ?

Very simple for this set - up..

Remember I mentioned these 2 factors above :

1)  Our Entry price coincides with the Previous ” Critical Resistance ” level..

2)  Nice PINBAR spotted bouncing off the Upper Channel Line..

Based on these 2 ” facts “….it is definitely good enough to place the Stop Loss just above that PinBAR !

And I like to give about 10 pips allowance from the tip of the Pinbar just to give it some reasonable room to breathe.

So the calculated Stop Loss level is set at Price 127.58 ( 60 Pips from entry price )

Here’s a Screen Shot to help You Understand more :

A nice and tight 60 pips Stop Loss place above the PINBAR…

And aiming for 108 Pips of Take Profit target…..

This gives us a ( reasonably ) good Risk/Reward ratio of  about 1 : 1.8

Each of these analysis were done before the closed of that 4 hourly Bearish Candle..

And it only takes me about 2 minutes to derive all these numbers and then made my final decision of whether should I trade this set - up…..* smile *

Of course it might look like alot of things to consider here….but once You get better and more confidence through practice…all these would then become 2nd nature to You….

Just like driving…You don’t really take so long to think as compared to the period while You’re learning how to drive…..agree ?

Same thing here applies for forex market analysis….

Of course the main key here is to learn the ” proper techniques ” to do so….and Price Action is the answer….no doubt!

And after about 15 hours of trading….the Profit Target for this trade was hit at Price 125.900.

( for a nice profits of 108 pips )

Here’s the screen shot to share :

Here’s the earnings proof with ” Entry , Take Profit & Stop Loss ” for this trade :

( click to enlarge )

Using this ” Gap ” forex trading strategy, I nailed 108 pips which equates to a nice Profits of USD $2321.82. ( As shown above )

Although ” Gap” is not very common in the forex market as I mentioned right at the start of this post…

BUT by equipping oneself with a proven strategy to trade such GAP ….AND when You happen to spot them in future, You would also know how to trade such ” Gap ” confidently then - Which is definitely an advantage.

Most importantly, You would know what are the ” important factors ” to consider too before deciding whether is that set-up a High Probability one……

And You would also know how to calculate and take all foreseen ” RISKS ” into consideration too….( which is very crucial for long term trading success )

Of course, do not trade LIVE until You are very confident with this trading strategy though..

Practice it on a DEMO account first till You’re confident and ” Really Confident ” is advisable…* smile *

One thing to note here is that if You are competent in trading Price Action strategies already….then trading such strategy which takes advantage of the ” GAP ” in the market is definitely BREEZE to You then…

So do read up more on Price Action if necessary ya….

I shall conclude here for this post..

And I hope You have learn a new ( proven ) forex trading strategy to be included in Your ” strategies basket ” after this…* smile *

Thanks for reading this far…

Happy Trading and spotting the ” GAP/S ” !