Wait….before You proceed onto reading the entire post on this ” High Winning Probability Forex Strategy “….

Let me play a little forex game with You here.

Looking at the forex chart below….do You have any idea how I :

1) Shorted at that point…

2) Exited Lot 1 at that location..

3) And then exited Lot 2 at the later location ?

For a ( Massive ) total  profits of  975 Pips gained… * smile *

So how did You fare ?

Manage to analyze how I grab those pips using just the patterns and price actions that’s presented on the above illustration ?

If You do….then let me congrats You….as You’re also on the way to be a very good and competent price actions trader in no time..

( Or perhaps You are already one….* smile * )

However….for those who do not have a single clue about how I nailed those massive 975 pips using these patterns..

Then You should really read the entire post as I would be sharing the step by step explanations on :

1) Why I choose to SHORT…

2) Why I decide to enter at that Price to short…

3)  How I plan my 2 lots exit strategy..

This is definitely one of the most accurate strategy one can use to trade the forex market …

And the best thing is that it only involves simple ” Patterns Formation & Trendline Bounce “…combined with little Price Actions.

( No technical indicators at all ….as You can also see ! )

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You know something here…

Ever since I started this forex blog sharing tips and trading strategies…

Many fellow traders from all over the world have been sending me emails asking basically any kind of  Forex questions…

One of the most common is this question  ( and it is also one that I consider the most critical too ) :

“….What are the steps that I consider before actually entering into any position that get me high winning success and consistent profits each month..? “

Of course….different traders would phrase in different version of their own words but generally…..they carry the same intention…

They wish to know my ” entire decision making process ” before committing into any position… ( whether Buy or Sell trades )

Logically….if YOU CAN ALSO see what a successful trader sees each time before he trades…

You would also be getting ” almost ” the same results ( or at least close results to him/her )….right ?

So upon knowing what these readers would like to know very much….

I really want to share as much as possible through this forex blog…in order to help You guys succeed..

Fact is……since I cannot transfer my entire brain to all of You guys…..( technology not so advance yet I am sure….LOL )

That’s why the more feasible way is to start this section in my forex blog which I called it  ” Forex Case Studies “….

Here I will be sharing each different LIVE trades I have traded…

And include all the ” Whys….Hows….”

…..basically all the essential considerations  You can also include  - In order to enhance the winning probability each time You choose to trade…

If You don’t know this FACT about forex trading yet…..then it’s time to change Your mindset once for all…

” Forex trading is none other than a game of probability……”

“….If You can WIN MORE than You Lose ( and repeat the process )…., You will make Profits each month consistently “…..

Bear this fact in mind….

….and You could really go far and achieve the kind of success You desire with forex trading too…

Alright….so much for the above sharing…

Let’s dive into step by step explanations on the trade which I nailed 975 pips profits…..shall we ?

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Step By Step Explanations For Forex Strategy

The GBP ( pound) has been very weak for the month of September as the economic data and GDP have been rather disappointing…..

I am taking into account this fact and simply scan all the GBP crosses for trading opportunities to confirm my BEARISH BIAS…

The common GBP crosses I would scan are namely :  Gbp/Jpy….Gbp/Chf…..Gbp/Cad…..Gbp/Usd….Gbp/Nzd

And without much effort….I noticed these patterns on the GBP/CHF….on the daily time frame…

The set - up You saw above is considered one of the ( most ) reliable ” Bearish ” technical set up …

Why so ?

Because it combined 2 patterns formation here namely :

1) Double Top formation

2) Descending Trendline ( to further confirm the Bearish bias )

The price bounced off the trendline for the 3rd time…

And it could be a good trading opportunity for me…

However….due to the current support at that period…

I would need to wait for the price to break that support first ( provided it breaks )……before I could enter and SHORT this pair Gbp/Chf.

Patience is really the key factor here if You want to trade a ” Good & Profitable ” set up..

I personally waited for about 3 days before the price broke the previous support and enter the ” zone ” I wanted……

Once the price entered the ” zone ” that I wanted ….( which is breaking the previous support )

I shorted this pair Gbp/Chf with 2 separate lots..

2 separate lots are very essential as it enables me to exit partial lot at certain pre-determined Profit target…

And allow the 2nd lot to ride the down trend for max pips…

For all my strategies viewing from the daily time frame ( just like this one )….

I would normally enter using this 2 lots strategy….as there are ” always ” lots of pips to be grabbed from the market.

And of course….using a stop loss that would give You a ” Good risk/reward” ratio is mandatory for such big move and profit target.

This explains why most of the set - ups that I choose to enter are mostly those that would ” move massively”..

Since for this strategy, I am not using any technical indicators….not even ” moving averages “….

Then how do I planned my profit target 1 and 2 ?

This is what I am planning to share next ….

How Do I Planned For My Profit Target #1 and # 2 ?

It is a well known fact that price in the forex market tend to stall at a particular support or resistance points previously..

That is why a ” double top or double bottom ” is formed in the market….

So taking advantage of this fact…

I planned both my profit target points with reference to previous support that has formed in this Gbp/Chf.

As You can also see from the chart above…

The Take Profit ( TP 1 ) is set at price 1.67930

….which is slightly above the 1st ( previous ) support point…

The Take Profit ( TP2 ) is set at price 1.63200

…. Again….also set above the 2nd ( previous ) support point..

( Note : I would never aim exactly at the low of the previous support…..as that is not realistic. I would rather aim slightly higher as the price is more likely to reach. Being ” Consecutive ” is the keyword here…..)

Maybe at this point….You want to ask me this question too :

“…Hey Aaron….how do You know whether the price would move to Your Take Profits #1 and #2 or not…? “

My answer :  ” I really don’t know…..as nobody can predict exactly what would happen next in the forex market….”

Only when the price actually moves….then the truth would be out…..agree ?

That is why I am using the previous support as a profit targets to aim for….

With these facts :

1) Double Top

2) Descending Trendline ( Bounce for 3rd time )

3)  GBP is weak for this period fundamentally..

I am willing to ride on this ” down trend “  sentiment….

But just like any other things we do in life….

We need some backup plan for contingency….in case the worst happen…

For this case….I would at least ” secure ” the profits…….or at least reduce the risk further…

That explains why I enter with 2 separate lots for this trade….

Because I intend to ride for massive pips …( if it happens )….

And using just 1 lot is definitely much too risky…

But by using 2 separate lots….I can exit partial first after the first target…

Then I can shift my 2nd lot stop loss accordingly to reduce risk…..while still riding the wave…..* smile *

It is indeed very essential if You’re also planning to ride such massive pips in future…..

OK….so how did this trade progress…?

The 1st Profit Target was hit on the 3rd day of trading at Price 1.67930

( 251 Pips Profits…..and the stop loss for 2nd lot shifted to Break-even then… )

Subsequently….the 2nd Profit Target was hit after 1 week + of trading at Price 1.63200

( for a whopping 724 Pips profits ..! )

Total pips nailed for this trade is =  251 + 724  =  975 Pips !

Definitely can be considered  ” MASSIVE Trend ” riding for this case…..agree ?

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Here’s the earning screen shot for Profit Target #1  ( 251 Pips ) to share :

( Click to enlarge )

251 Pips gained for this 1st lot is equivalent to Profits Usd $ 2405.39 ( trading 1 standard lot )

And here’s the earnings screen shot for Profit Target #2 ( 724 Pips ) to share :

( click to enlarge )

724 Pips gained for this 2nd lot netted me Usd $6948.34 in profits….( 1 standard lot )

Notice for this earnings screen shot….the Stop Loss ( SL ) has been shifted to the Price 1.66440…

This is already ” locking in 400 pips ” if You can do the simple math too…

Aiming for ” massive pips ” is definitely good and very profitable..

But it is also vital that You lock in the pips accordingly as the trade continues to go Your direction and Profits still growing…

Just like for this 2nd lot ….

As the pips keep accumulating….it would be really stupid if I did not “ trail ” along as it progress….

Imagine seeing ALL  700+ pips gained reversing and turning against You ……ended up losing all those valuable pips…

That’s equivalent to banging “A HARD Wall big time ” to me……

Do You agree that can be really detrimental & negative both to one’s confidence and morale..?

Well fortunately…..it can be avoided at all cost…

For this trade….all I have to do is lock in those pips ( profits ) accordingly…..

….while at the same time giving some ” breathing space ” for the trade to develop without getting hit unnecessarily..

There’s really no fix formula to how much You should lock it…

Just depends on how much You have accumulated …

AND….how many of those pips….You want to secure….that’s all…

Remember…in any trading game….nothing is certain….nothing is guarantee…

So it is our duty to protect and secure the pips we have accumulated…

If the trade go against You…..nobody would feel sorry for You…..

The market would not feel guilty too just because it has reversed on Your position causing You to lose all the 700+ pips You have gained earlier…! ( Arghhh….)

Ride the Pips……Lock in…..& Lock in MORE……that’s the key. * smile *

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Alright…..up till this point…

That’s pretty much all I would like to share with You about this ” High Probability Forex Strategy ” using just :

1) Double Top

2) Descending Trendline Bounce

3) Fundamentally weak GBP

4) Support and resistance to plan for profit targets…

Which means once You can trade using these elements from the market…

You do not need to rely on those ” lagging textbook technical indicators ” anymore too……if You want..

Enough of seeing those situation when You’re always too late to enter into a trend because You’re waiting for those technical indicators to show You the signals to enter …..right !

That’s NOT the way to trade the forex market…..for sure!

I have been through the frustrating phase too…..always LATE on buying or selling into a position because those lagging indicators are simply lagging in nature..

The moment I learn about trading solely using ” Price Actions + Patterns Formation“….

My monthly trading results complete changed !…….And for the better…..No joke !

It makes me trade really confidently too…..without having to worry about being late on my entry point….

YES…..even with merely price actions + patterns formation….I can spot good trading opportunity for such ” massive trend ” too…

You have gone through all the illustrations and my entire ” decision making process ” above ……

And now You Know…..* smile *

The key to achieve such MASSIVE Pips…..is to be abled to lock in those pips….and even more pips as the trade progress…

And of course…..must be dare to see the entire trade through……and ride on the major trend  that prevails..!

Thanks for reading this far…..

Hope this is a valuable learning experience to You so far…..

Good luck in Your trading and happy riding the next MASSIVE Trend too !

There are a handful of different forex breakout strategies that are being used by traders to trade the forex market - That’s for sure..

It is also a proven fact that trading ” Breakout ” is indeed profitable due to the Explosive & Massive Movements that follow..

On the other hand….in order for any trader to consistently win from such breakout set-up…

He/She also needs to know how to filter ” False Breakouts ” too which are very common in the forex market…

( Those big banks, institutes and big players just love to trick small retail traders like us…..indeed….LOL )

Nevertheless…..You can avoid being suck into those ” traps and false breakouts “…… if You know how to watch for more proven hints from the market…

Here in this post…

I will be sharing on a proven ” Breakout Strategy ” which I nailed more than 280+ pips trading the Gbp/Jpy…

You will be looking in depth into how I look for ” Strong Hints ” of  the BREAKOUT set - up..

As well as my entire decision making process from Entry …..setting Stop Loss and When to exit the trade…

Let’s get started now …

For this Gbp/Jpy trade….

The market has been plunging down fiercely when I saw the trade set - up…

And the good ” hints ” from the market that reinforce my BEARISH bias are those WHITE LONG CANDLES…

If You don’t know this yet….

Let me share with You more about LONG CANDLE in the market..

With LONG CANDLE ….it simple shows that there are ” STRONG SELLING INTERESTS ” +  ” BIG VOLUMES “….

When these 2 factors present ….it would lead to LONG Candles formation in the market…

Combining these LONG Candles with any Breakout - set up…

One can really grab some nice pips from the market ( in a rather short time perhaps ….)

For this trade…..what is the set-up that make me want to SHORT this pair then….?

For any trade that I want to enter….

I need a ” strong ” reason or two in order to enter a position….

It is definitely NOT based on wild guess or feelings…or unbiased tots….judging….bla bla…

Those would only make any traders failed…..or simply struggling to break-even each month….

No good….:X

Upon spotted a nice ” Descending Triangle ” + ” LONG Bearish Candle ” ….

I affirm my decision to enter and SHORT …..

With a Descending Triangle….it is technically a ” Bearish ” pattern…

For this case…it would be a ” Continuation ” from the previous downtrend…

BUT…..as usual…I would have to wait for a better price set - up in order to reduce my risk further…

As I am trading on the 1 hourly for this trade…

It is considered an Intra Day position…

So the stop loss that I would be using would be in the range of 75 - 100 for this super volatile pair  - The GBP/JPY !

( With an average Daily True Range of at least 200 - 250 Pips price swing …)

This minimum is essential to allow the trade to ” breathe ” without getting stop out unnecessary.

If You have not traded this Gbp/Jpy before….try it on a DEMO account…

And You would know what I mean by ” Super Volatile Pair “….*smile *

But definitely good amount of daily pips to be grabbed….if You know how…!

Here’s How I choose My “  SELL Entry & Stop Loss  ” :

Upon seeing that ” Bearish LONG Candle “  as shown above…

I do not enter straight away as it might also ” retrace ” quite a bit too…

Very risky I think and not an appropriate entry set - up…

For this strategy…..

I am using 2 ” Exponential Moving Averages ” to track the trend..

One is the 10 EMA ( green )…the other is 20 EMA (white )..

I personally would like the price to ” at least pull back to the 10 EMA ( GREEN ) first ” before entering to SELL….

If You are also familiar with the Fibonacci level…..this would be around the 50%  level too…

Then just give some pips as allowance above that level so that the trade can breathe and not getting our stop loss hit unnecessary.

As You can see from the illustration above…

I ” SHORTED ” the the GBP/JPY at Price 144.955

( when the price started turning down from the 10 EMA )

Stop Loss placed 85 Pips away at Price 145.805

As for the Take Profit target….

I would not set a pre-determined target .

Due to the fact that this is a Long Candle breakout set up…..

I would be using the 2 EMAs to help me decide ” when ” to exit the market..

That explains why for this forex strategy….I have plotted these 2 EMAs.

As usual…once the price move in my flavor for about 85 pips….I will the shift my stop loss to breakeven..

And just ride this intraday breakout from then on….

When To Exit Then…?

UNTIL……the price closed above the 10 EMA ( green )

Very simple way to exit the market…

And it works well for such ” explosive breakout ” set - up I must say…

Having traded them for years now….* smile *

Let me show You how below :

This technique of exiting the market using just simple EMAs cross-over is indeed very common..

And I dare say as long as You know ” how and when ” to use them…

They would work incredibly well…

Just like in this trade…..it basically notify me that it is time to exit the trade as the price has already crossed the GREEN EMA ( 10 )…

” POSSIBLY a reversal might be coming next is another meaning”….

During a STRONG BREAKOUT ……the price would be threading nicely along the EMA 10 too…..( if You look above )…

That explains why for this strategy….I choose to include these 2 EMAs….

In Forex trading…..there are a lot of strategies….techniques or rather technical indicators You can use to help re-inforce Your trading decision..

It is just a matter of ” knowing ” WHEN to use which ones…..

…WHEN NOT to use which ones…..that really matter….

I have been trading the forex market for more than 4 years now…

And I have literally seen a lot of  different set - ups that have occurred  in the market…

Some are worth trading ….as it it more reliable..

Some are best avoided at all cost…..

To me personally……I simply love trading such ” Breakout ” set - up indeed…

Especially when it is proven with such LONG CANDLE ….

It only makes my bias much more stronger….

Moreover….it is very simple to trade such Breakout set - up….

And the movements are really MASSIVE & EXPLOSIVE ….most of the time…

Try spotting them as it happens…

And learn to include this ” Explosive Breakout ” strategy into Your trading arsenal….. ( if You have not….)

I can guarantee that You would also love trading them in no time…..as You get more and more confidence with it..

Ultimately…..

You would also be seeing Your account growing fatter and fatter ……as it grow rapidly with those valuable Pips You successfully nailed…!

The total pips gained for this GBP/JPY trade is a whopping 287 Pips…

With my initial stop loss at a tight 85 pips…

This gives me a very good risk/reward ratio of at least  1  :  3….* smile *

Definitely a good trade…..

Of course….the net profits of USD $3,199.13 also make me a happy ” breakout ” trader too…!

Here’s the earnings screen shot with the SELL Order, SL & TP to share :

( click to enlarge )

From my earnings proof….You can also see that my ” entry timing ” is at 7am GMT…

Which is also the London Market open….( biggest financial market in the world )

What this also implies is that ” Breakout ” set - up that coincide with the market’s open timing..

It is usually ” more reliable “…..

As most big institutes and banks would be open for operation like any normal day…

After all….successful winnings after winnings trading the forex market is about getting ” as much hints ” from the market possible…

The more ” reliable hints  ” You can extract from the market to support Your trading bias ( direction )….

The better it is….and of course….the MORE CONFIDENT You would feel about that trade too….* smile *

Never stop learning proven strategies that work…..

The more knowledge You have  acquired about forex trading….the more confidence and competent You would be end of the day…

And do feel free to venture into other posts I have wrote in my forex blog…

….as I have many other ” simple yet powerful ” forex trading strategies that I would like to share with You too…

So much for this strategy & step by step explanations….

Hope You would be applying this Breakout strategy of mine to Your own trading soon…

And grab some nice Pips ( Profits ) for Yourself during such Explosive Breakout !!

In forex trading…..whenever we talk about the ” Head And Shoulders ” pattern formation..

I am sure almost 99.9% of traders would have heard about it and even traded it before.

This is also one of the forex pattern out of many that I love to trade as well…

Simply because it is very reliable and easy to trade…

Here in this post, I will be sharing a technique which I take advantage of this ” Head & Shoulders ” formation to grab a nice 272 pips trading the Gbp/Usd.

With a Head and Shoulders formation in the market…..what does it means ?

This pattern is technically a ” bearish ” formation….

Sort of having ” 3 tops ” forming a strong resistance …..but with the center top being slightly higher…

Like this :

How ?

Do You ” Also” manage to see a Head & Shoulders pattern in the chart above too ?

( And the Neckline as well….? )

Some might see it without much difficulty with their naked eyes…. just like I do….

Some might get abit confused and not sure…

It’s alright…

For the sake of the absolute newbies….I shall label the details clearly with another illustration :

Now……being able to spot such ” head & Shoulders ” formation in the market doesn’t mean You would end up winning the trade…

Just like any other forex trading strategy…

One still cannot escape laying down a concrete trading game plan…

This game plan must essentially includes :

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1)  When to enter to ” SELL “   ( in order for minimum risk )…

2)  What ” Stop Loss ” to use and what is the strategical position to place it…

3)  What ” Take Profit ” target to aim for….

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Even with such common ” head and shoulders ” pattern…

But if a trader failed to consider these 3 critical elements for his/her game plan…

Then I would say the winning probability is not high in fact……

It is not about how much You would win….

It is about how much ” risk ” You have to bear when You’re wrong……!!

That explains why even with a Stop Loss in place…..it doesn’t mean Your trade is protected…

When too many ” stop loss ” get hit again and again….it would accumulate to BIG LOSS in the long run too..!

Agree on this ?

If You are still not confident on laying down a game plan which can enhance Your winning % trading such head and shoulders pattern…

Then read on as I share my entire ” decision making & game plan ” on trading this pattern.

It’s simple….once You understand my detailed explanations …* smile *

For a start, let me share about :

Step #1 :  When To Enter To SELL

In order for this ” Head and Shoulder ” pattern to be a VALID one…

The price has to move and ” closed at least 1/3 ” down on the right shoulder…

Or else it cannot be considered a valid head and shoulders…

However…just like in other forex case studies of mine….I would not just enter like that…

I need a certain ” price actions  or candle stick formation ” to convince me to enter ….

For this trade…..I decide to enter once I spotted the ” inverted hammer with a bearish closed “….

( I SELL at price 1.64320 )

Step #2 :  What Take Profit ( TP ) To Aim For ?   What Stop Loss ( SL ) To Use ?

Just for Your information…..this head and shoulders pattern is spotted on the daily time frame..

So the Take Profit target can be in the range of 150 - 250 pips as daily time frame is a much bigger price projections..

In fact….I do not trade using smaller than 1 hourly….4 hourly or daily time frames for my strategy as they are filed with noise & not accurate…

For this strategy….I need to calculate the Take Profit first before the Stop Loss…

That’s because  without knowing the Take Profit level to aim……

I would not know what Stop Loss to use and where to place it….( in order to achieve a good risk/reward ratio )

If You have been reading about my forex empire blog….You would know by now how much emphasis I place on a good risk/reward ratio ..

Risk/Reward ratio no good….I would not trade….simple..

For the Take Profit target….I will be using the ” neckline or the previous swing low ” as a maximum target… ( whichever is nearer )

And I would be aiming for a target at least 40 pips above the nearer one ….

Here’s my TP & SL after calculations  :

- SELL at  1.64320

- Stop Loss at  1.65750 ( 143 pips )

- Take Profit at 1.6162 ( 272 pips )

….which give us a good risk/reward ratio of   1 :  1.9 ….. ( good to go )

As a standard practice to ” reduce risk further “……

I will shift the stop loss to break-even point after the price has moved about 143 pips  ( my risk )

This is to prevent seeing a winning trade turning into a losing one.

So how did this trade turn out  ?

My Take Profit was hit after 3 trading days..

Winning a nice 272 pips for this trade.

If You notice on the illustration above too…

Shortly after my ” Take Profit ” target was hit….the price turn up again …

So it really pay to calculate a more ” conservative ” profit target always…

It does pay off in the long run !  * smile *

Though  it is a conservative target….but a 272 pips win is definitely good profits for most traders..

Plus…the risk/reward ratio for this position is a good 1 : 1.9…

I would consider this a good winning game plan in fact……

Agree ?

End of the day…..it is really simple to trade such ” pattern formation ” if You know how to indentify them when they happen….

Try to spot them on at least the 1 hourly or bigger time frames…

Because they are more reliable and accurate ….

Here’s the earnings screen shot with Sell Entry, SL & TP to share :

( click to enlarge )

This trade netted me Usd $2706.11 in profits.

Did You see that my stop loss has been shifted to break even in the earnings screen shot ?

This is to ” reduce risk ” further…

Not fun to see a winning trade turning into a losing one and giving ugly deficit to our trading account - Which can be totally avoided by doing such simple move….

Agree ?

* smile *……alright so much for this forex strategy on the head and shoulders…..

Hope You learn something from this proven pattern formation today….

…..or if You have been trading such pattern previously…..BUT just can’t secure as much winning trades as You desire…

Then after reading my strategy and entire decision making process…

Everything would be much clearer now for You…. I hope…..

Cheers and happy trading.