Having been trading the forex market for slightly more than 5 years now……( since I quit my day-job as a technician previously )

I am pretty much clear about the undesirable factors that caused most traders to struggle with their trades …AND ultimately FAIL.

Obviously, I have personally committed these undesirable mistakes too during my newbie days…

Moreover, ever since I started this blog sharing Forex Trading Strategies ( based mainly on Price Actions )…

I have been communicating actively with many fellow readers ( whom are aspiring traders ) via emails all these years.

And believe it or not,  9 out 10 times…..

…..These emails sent by readers are mostly expressing their frustrations & other ( challenging ) problems they encountered while trying to master this forex trading game.

And by reading through the few hundred of emails so far, I have spotted a few common mistakes that pose the biggest obstacles for most traders ….. to achieve the success ( profits ) they want out of  forex trading.

Well….as I mentioned earlier on I was ONCE a struggling trader as well during my beginner days - Hence these common mistakes are NOT surprising to me anymore definitely.

BUT….for anyone whom are starting out to explore on this ” Supposedly Super Profitable  ” Forex market…

OR….for those that have ” Already Entered ” into the Frustrating stage now and possibly on the verge of giving up his/her dream of succeeding with forex trading..

Then the 4 common mistakes that I am revealing below could definitely help steer them onto a smoother path and minimizing further ( undesirable ) obstacles in near future.

Of course, it would be useless if I only point out the 4 common mistakes though…

Any problem WITHOUT a solution is as good as better off  NOT giving at all…..agree ?

Hence, I would be pointing out the 4 common ( nasty ) mistakes here in this post…

As well as providing Some Simple & Effective Solutions to overcome or even eliminate them as efficiently as possible !

That’s better right …? * smile *

Alright….let’s get started now then .

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Succeeding Factor #1 :   Trade ONLY The ” OBVIOUS & PROFITABLE ” Set-Ups

( Never ever Presume / Force any trades )

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Most traders whom had already fallen into the ” struggling ” category….

One of the leading reason is that they tend to OVER-ANALYZED the forex market.

As such, even when there is NO Proven or Profitable Set-Up present in the market at all…

They would rather ” presume ” that there is IN FACT one such set-up in the market now for them to trade..

And just simply jump on it and ” trade ” hoping to profit end of the day.

Well….why are they doing this then ?

Simply because they ” die - die ” must trade the market - As & When they open their forex charts !

Somehow they have the Misleading Information that as long as they see ” some set-ups ” in the market, they can make profits out of it …

If they DON”T trade it, they will be LOSING out of those Pips ( Profits ).

Indeed a very fatal mindset & attitude to have and it is NOT beneficial at all ……for anyone who is serious about surviving in the forex market in the long run.

So what if You are also committing this mistake now ?

How do You overcome it before You LOSE Your entire account ( & experiencing some detrimental effect as a result ) ?

Not hard actually…..just do these :

1)  Only trade the ” Obviously NICE ” Set-up - You know those that formed nicely on the market at the exact timing You want and at the Ideal Price Level You want as well…

Everything just seems to be RIGHT about that certain Set-Up…and it is Obviously A Profitable One.

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One Example Would Be This :

Perhaps the market has been trending ( fiercely ) up-ward for sometime previously..

And it has now reached a price level where there is a MAJOR SELL-OFF ( resistance point ) before in the market..

At the same time, You even spotted a ” Head & Shoulders ” forming in the market - Which is still at the EARLY stage and there are a lot of potential rewards ( Pips ) for You to grab from SELLING this Set-Up.

Your confidence is naturally very high and nothing seems to hold You back at all for this SELLING set-up.

And THAT is the kind of ” Obviously NICE ” set-ups I am talking about here…* smile *

If You have been trading the market for a while now, then You can possibly relate better to the scenario I described above.

If You’re still a newbie still trying to get out of the MAZE & Tonnes Of MISLEADING forex information online…

Don’t worry as sooner or later, You will also start to experience the ” high ” of trading such OBVIOUSLY NICE Set-ups in Your Demo Account too perhaps.

When that happens, do take note of  all the ” whys ” as You can use that to constantly ” remind Yourself ” to spot for such NICE & Profitable set-ups in future.

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Succeeding Factor #2 :   Trade With The BIGGER Time-Frames

( Ignore anything less than 30 minutes )

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Another common ( & deadly ) mistake that most traders would eventually commit is to believe that there is a lot of money to be made in the lower time frames…..( such as the 1 mins, 5 mins or 15 mins )

This so because they thought there would be more ” trading opportunities ” for them to profit from.

Yes…..there is no doubt that smaller time-frames are ( very often ) filled with all kinds of pattern formations & other signals from those technical indicators..

However…..many signals present in the market ….DOES NOT mean they are ” Good or Reliable ” for profitable trading though.

In fact, those many trading opportunities that You found in the small time frames (  such as 1, 5 or 15 minutes ) are nothing more than randomize movements or what most traders known as ” Noise “.

They are NOT reliable to be based on at all.

But Why so ?

Just like a quote that George Soros always mentioned in this books :

“…..It doesn’t matter how often You are right or wrong – it only matters how much You make when You are right versus…… how much You LOSE when You are WRONG ! “

As long as You lose LESS than Your WINNINGS…….” Consistently “.

You will most likely end up with Profits in Your trading account end of the month..

Very simple logic here……agree ? * smile *

So by trading on a smaller time frame - You’re also looking at a much smaller Price Projections in the forex market..

Hence, the Take-Profits Or Stop-Loss value would have to be small too…..or else it would be ” Unrealistic “.

That is why whenever traders use the smaller time-frames for trading, it would be for Scalping for quick profits.

Aiming 5 -15 pips each time and get out quick - Because they know it is very risky to stay in there for long and would only put them in an disadvantage.

Having a Take-Profit target of 5 - 15 pips can be easily achieved….I agree.

But on the other hand, You CANNOT trade without a Stop-Loss too…….right ?

You need to protect Your capital should the trade go against You too much and too fast . ( which is very common in a highly volatile forex market )

So considering this, are You going to use a 5 - 15 pips for Your stop-loss as well ?

If You are….then You would be feeling the anxiety of getting such ” TIGHT ” Stop-Loss hit….again and again….UNNECESSARILY.  ( there isn’t enough room for the trade to breathe at all )

On the other hand, if You’re using anything more than 5 - 15 pips…..it is NOT giving You a reasonable Risk/Reward ratio.

If You LOSE just once…..You might have to WIN 2 times or even more to recover Your losses.

So it is definitely NOT the way to trade for long term success…..and You know it too.

To overcome this problem, don’t bother going anything lower than 1 hour time-frames ( if You’re an intra-day trader )

In fact, for myself….I would only go for at least the 4 hourly or BIGGER time frames .

Most of my trading decisions & analysis are derived from the 4 hourly and daily time-frames in fact.

Not only am I getting more reliable signals & price actions from the market with these time-frames..

….Thus increasing my winning accuracy & percentage.

And most importantly, I DO NOT have to be ” glued ” to my chart all day staring and over-analyzing the market - Only to get frustrated and experience more losing trades.

I rather go out and enjoy the day……eat some yummy food with my love ones and at most check the charts every 4 hourly. ( either with a smart phone loaded with trading platform or bringing out my handy laptop )

It’s that **simple.

So….if You’re still holding onto the mindset that You can make a lot of money from the smaller time frames because You heard somewhere ( from someone )…… or You think that there would be more trading opportunities to make You rich faster..

But only end up getting very drained from those unfruitful analysis and over-analyzing of the market..

Losing 8 out of 10 trades….

Then it’s time for You to discard that method and switch to trading the much BIGGER time-frames too such as the 4 hourly or daily.

Trust me…..the signals would be far better off than those You get from the smaller time frames.

When You get reliable signals….You can also make more reliable & accurate prediction for Your trades…..

That’s for sure.

So what would happen to Your monthly forex profits then ?

You tell me….! * smile *

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Succeeding Factor #3 :   Try Only With The Money You Can Afford To Lose !

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Any trading is just a game of probability after all…

And I hope You know this by now…

You can WIN……and You can LOSE too…

Moreover, it has been **Statistically Proven that at least for the first  6 - 12 months….most traders would keep on losing !

Well for those that choose to risk more money….of course they would lose more ( suffer more ) during that period..

That is why it is a common practice that before we go LIVE…..at least prove to ourselves that we can actually make ” consistent ” profits for at least 2 -3 months before doing so.

Even after 2 -3 months of ” consistent winnings ” from a DEMO account, it DOES NOT mean he/she is ready to trade in the LIVE forex market though.

This is because when REAL money is concerned, it has a direct & significant IMPACT on our emotion.

When You know You would lose A Lot Of Money ( maybe $10k )…..The MORE this emotions would affect You.

On the other hand, if You know that even if You lose….it is at most $500 and You can afford to lose that amount..

It is NOT so impacting on Your emotions. ( and I mean in a negative way )

That is why whenever some fellow readers told me they they are ready to go LIVE for their forex trades.

I will advise them to start SMALL …..as little as $300 - $500…

And then build up the account from there..

In this way, IF they are competent enough to build up this account size to maybe $1k …then subsequently to $3k…or more..

That kind of achievements would be VERY ( VERY ) Beneficial to his/her trading confidence as time goes by…

And this is exactly how we nurtured into a more ” mature & confident ” trader as we trade more and more…

We are human beings after all….and no human beings would like to LOSE in anyway.  ( be it money or in any competitions )

That is why when You trade with money that You CANNOT AFFORD to LOSE…

You would be very ” Emotionally Attached ” to all Your trades…

And that is when You start to make ” Illogical ” decision which sabotage Your trades Big time.

Maybe You’re in a profits now…..but because You’re trading with money You ” CANNOT Afford to lose ” and it is a BIG amount…

You are feeling FEARFUL….. that if You keep holding onto this winning position, maybe You would lose them all by tomorrow if the market reversed.

And so, instead of riding for 100 pips which You intend to initially….

…..You choose to EXIT EARLIER and with a measly Profits of just 35 Pips.

When this happens, You are not achieving a good Risk/Reward ratio for Your future trade because there is NO consistency anymore.

Because initially You’re aiming for 100 Pips Take-Profits and intend to use 60 Pips Stop-Loss…

But You exit earlier because of  FEAR at 35 pip instead.

So the next time You lose…You would be losing 60 Pips or more…..not getting a good risk/reward ratio anymore.

Moreover, BECAUSE You’re so ” EMOTIONALLY Attached ” to Your trades..

When You’re LOSING….You will be very ( VERY ) Reluctant to Cut-Loss too !

That is already a proven ” deadly ” mistake committed by most traders.

That also explains why traders would resort to the extreme and totally REMOVING their Stop-Loss for that losing trade…

And in the process making the losses from a 60 Pips to a 250 Pips now and going against them further and further each day.

But they are still NOT willing to CUT though……

Instead….they are ” HOPING “ that the market would turn back again so that they can exit with minimum or no loss at all.

Hmmm…….unfortunately, the only outcome is that the deficit grows bigger and bigger until they hit a MARGIN CALL from the broker.

Very common & ” brutally deadly ” mistake most traders face and this is also the main reason for their account to encounter the undesirable MARGIN CALL !

So please, only trade with money that You can afford to lose.

Start small…and slow build up from there…

Your confidence and emotion would benefit tremendously from it. * smile *

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Succeed Factor #4 :   Get A Proper Forex Education

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Some newbie traders would rather learn from a proper forex education and get guidance to help them kick start their trading.

On the other hand, there are also traders who choose to ” Self - Educate  & Learn Through Trial & Error “…

Well…some achieve the success they desire after some efforts….

Whereas some failed miserably and to the extreme of Losing A few accounts with more than $10k or more in it…

There is no right or wrong way on how You choose to start though…

BUT…there is definitely one important & LOGICAL considerations here You must know about.

You see….

I myself is one such trader whom can be considered :  ” Self - Educate & Learn Through Trial & Error “..

Nothing is smooth sailing right from the start while trying to learn & master any trading game..

Because not only do You need to have a few proven trading strategies to trade the market..

But You must also control Your emotions too or what traders known as the ” Right Trading Mindset “.

For myself, I have lose a few thousand dollars too  ( when I bursted 2 trading accounts ) during my beginner’ days.

Even on the urge of giving up this dream to succeed with this forex trading game and earn a full-time income out of it.

But after much perseverance & intensive learning,  I begin to see ” small BUT consistent ” gains & profits progressively month after month…

Eventually hitting a point where I can be considered ” confident & competent ” to get a certain ROI every month to treat it as a full time income .

PS:  In case You’re wondering what ROI am I getting on a monthly basis, that would be between 30% - 50% now (sometimes hitting 70%  when the market is trending strongly and nicely ). And that is already good enough for me to rake in at least $15,000 - $25,000 a month now. ( at the time of writing this post )

With a 5 Figures income finally achieved, that is also the moment when I ” finally “ decide to quit my day job as a technician and trade fx full time.

So although I am a Self-Learner…..but the amount of effort & time I have spent and put in are literally not ” overnight or few weeks thingy “.

Not an easy journey….but NOT a really tough or impossible one either I must say.

Definitely worth the effort end of the day when I can now make a full time income trading the forex market finally. ( and making a nice 5 figures income out of it too * smile * )

For You guys out there reading my post now..

If You’re still struggling with Your forex trading or have already LOSE a significant amount of money so far..

Then it really pays to at least get a proper forex education to help overcome the elements needed for You to succeed.

Try to go for one that is based mainly on the more powerful Price Actions strategies would be advisable.

That’s because like I mentioned before in the other posts on my blog ..

Price Actions are essentially the Rawest form of data that is both ” Reliable & Accurate “ to be based on for our trading decision.

No matter what technical indicators or fundamental news You’re relying on..

Once You combined with the more powerful Price Actions of the market, it could definitely give You an ” Edge “.

Most importantly, when You KNOW You’re basing Your trading decision on ” More Reliable ” date from the market itself ( Price Actions )…

You would be trading more confidently too…..and that would help eliminate the undesirable Emotions resulting from Greed & Fear.

End of the day, that would inevitably increase Your odds of winning from most of Your trades as well. * smile *

So do not hesitate anymore ya…

If  You think You would be better off  getting guidance from a proper forex education instead of  wild-guessing your trades or entering into the market using ” feelings or the You-Think attitude ….

Stop doing that now before burning even more hard earned money You have..

Get a proper fx education, Master it……and be a Confident, Competent & Profitable forex trader in no time too !

Trust me….the moment You can call yourself a ” confident trader who is competent enough to profit a certain ROI every month “….

Your decision to seek guidance from a proper fx education would make You feel ” glad ” that You have chosen to do it back then.

Forex News Trading Strategy Combined With Price Actions

If You have been trading the fx market for sometime now…

Then it is already NOT new to know that Fundamental News is one of the main driver of crazy & wild price swing in the forex market…

That’s right…..Crazy, Extremely Volatile price move of at least 200 - 300 pips in just a few hours is very common with high impact news announcement.

That’s because the big players, major institutes and banks would use the results of such news announcement to decide whether to buy / sell into a currency pair/s.

Moreover, these news also directly reflect the economic health of a certain country.

So big time traders who are holding onto these currency pairs ( as assets ) would be very much affected by the economic data.

This explains why economic news announcement carries a lot of weight and impact for any traders in the market……

BECAUSE…. their results would lead to EXPLOSIVE & MASSIVE movements in the market.

When that happens, you and me can go in and make some really nice Pip ( profits ) definitely.

And in this article today :

I will be sharing on one of the highly - effective & time-tested ( again and again ) strategy to ace such highly volatile news announcement & increasing Your winning probabilily significantly.

Many traders already knew that trading the economic news announcement in the forex market can be very predictable and profitable…..in fact.

Well after all, the market moves simply due to traders’ bias on a certain currency profitability factor ………..right !

BUT…..the sad fact is that most traders are literally doing it all WRONG.

They tried to trade a few times…..maybe managed to win some…..lose some..

But end of the day, they are LOSING more than they win….

….So these losing traders would think that trading news in the market is NOT as easy as it seems……..NOR is it as profitable as they thought after all.

They then give it up totally and FAIL to enjoy the enormous benefits that could be achieved with trading the economic news.

While on the other hand…..some traders ( who are in the KNOW ) are secretly grabbing those valuable pips by trading the news released each week…

Making their trading account fatter and fatter progressively….

So if You’re one such trader who failed to master news trading previously……

Or……. You just want to know how to trade such volatile & profitable news announcement confidently each time….

Read on below as I share one such forex strategy on news trading - With High Accuracy.

Here we go…

Learn Highly Accurate News Trading Strategy :

For any strategy that I am using to profit the fx market..

I would ” for sure ” based it around the more powerful Price Action strategies.

Nothing can beats Price Action strategies in terms of  Reliability, Effectiveness & Profitability.

( That’s provided You already master it of course…)

So for this news announcement strategy, I will be combining these 2 elements :

1)  An Actual News Announcement Results For A Certain Currency

However, do take note that NOT ALL the news announcement are profitable for trading though.

I only look for those that are either ” Very Good …or Very Bad “…

Because when this happens, there would be ” Reaction ” from the big time traders & players…

So it would eventually lead to BIG Movements in the forex market as well…

More on that later below with examples

2)  Using Price Actions For Optimum Entry & Increase Winning Odds

Price Actions are the core data in the forex market !  No doubt….

….. and it is the closest ” hint ” any traders can siphon from the market for his/her decisions marking process.

This is due to the simple fact that Price Actions that exist in the market is very reliable and they are NOT lagging.

They are the TRUTH of the market.

So when……. WHAT You see in the market is the actual ” truth “, it would help You make More Reliable & Accurate decisions too.

That’s about it.

For this news trading strategy, I will be trading the AUD/USD..

Because the News Announcement is for the Australia Trade Balance

It is scheduled for release on Jan 11th at 0030 ( GMT )

However, the ACTUAL Result turns out to be Much Worst ( LOWER ) than the Consensus.

Here’s a screen-shot to share with You :

When that happens, I know there would be some good pips to be grabbed out of this trade.


Remember I told You earlier one that we are only interested with either :

….. ” A very good OR A very bad ones ” for any news trading.

So for this one, the ACTUAL Result is much ” Worst ” than the Consensus..

Hence, it is a bad one for the Aud/Usd…..& our bias is to ” ONLY ” Short / SELL this pair.

Continue reading below as I show You :

1) How to spot for the profitable price actions for optimum entry

2) How to determine what stop-loss & profit-target to use for good reward/risk ratio

Here’s the exact Set-Up I saw Just Before The News
Announcement At 0030 GMT …..

This is the set-up I saw at 0030 GMT - which is a litle ” Doji ” implying UNDECISIVE-ness in the market.

A very common candlestick formation prior to any impactful news announcement.

At the same time….there is also another good ” Confluence “ which I saw from this chart too.


Can You also spot it like I do ?

Nevermind, let me save you sometime for now and just show it to you below :

Yes, a nice ” Down Channel “ has been spotted too when I plotted the 2 trendlines as shown above.

So with the such ” Down Channel ” showing +  Exact news release WORST than actual…

It is a very STRONG  hint that our decision to ONLY ” Short / Sell “  is much supported.

HOWEVER…..as always…..

I Do NOT just jump in and SHORT like that…


I would wait for a better price to get in for my sell though.

A good entry would be the 50% Pullback definitely.

If you have been following my forex tips and strategies so far…

You would known very well by now that I place a lot of emphasis on Price Pullback for all my trades.

This is very essential to achieve a Good Reward / Risk ratio.

And so I waited.

Indeed …..shortly after the news announcement, the price actually CLIMBS to the 50% fibonacci level !

After 60 minutes, the Price Pullback completed by forming a Bearish Candle.

Which is a good entry point for me by seeing that.

Like This :

As You can also see from the above illustrations too…

The Price hit the 50% Fibo line and bounce nicely off it…

Exactly the kind of set-up I normally would like to trade.

I enter to SELL at the price of 0.99360 ( after closed of that bear candle )

Stop- Loss set at 0.99560 ( 20 pips risk )

But How About The Profit Target ?

Just anyhow guess number ?

….Or don’t need to set at all….just see how it goes ?


Hmmm…that’s NOT my trading style..

I prefer to use the chart to derive a ” Logical ” Profit Target though.


Here’s how :

As we already spotted a Nice ” Down Channel ” previously…

So I would be using the ” Lower Limits ” of the channel for my Profit Target definitely.

Here’s How I Derive The Price Target :

I set the Profit Target just ” slightly above ” the lower limit of the channel …

And that is at the Price of 0.98860.

I do not want to set exactly at the lower limit but ” slightly above ” it instead.

This is being conservative and making it a more ” realistic ” target to be hit.

My trading style ! * smile *

Alright, let me recap the details for this trade once again :

-  Entry at Price 0.99360

-  Stop- Loss at Price 0.99560  ( 20 Pips Risk )

-  Profit Target at Price 0.98860  ( 50 Pips Rewards )

With these parameters, I am getting a Good Reward/Risk ratio of more than 2x.

Definitely a good one.

So How Did This Trade Progress After That ?

Check it out :

The Profit Target was hit after about 45 minutes of trading after my SELL entry.

In fact, if You see the chart above too….

You can also notice that the candle are really BEARISH with those Long Candles one after another.

And they happened shortly after that 50% Fibonacci Pullback which I am waiting for .

But why does this happens ?

Why the Price literally PLUNGED so fiercely ” shortly ” after that Pullback ?

Very simple here…..

…. And that’s because those BIG time traders & institutes, MAJOR Banks & Majority of retail traders ( like me and YOU ) are also watching such Fibonacci Retracement Levels.

In any trading game, as long as You’re following the MAJORITY…

You are going to be enjoying those Profitable Rides Of Pips too….

……& GROW Your trading account progressively !  * smile *


Here’s the earnings screen-shot for this trade to share :
( with the Entry price, Stop-Loss & TP point )

A nice profits of Usd $2k for this trade.

Spending about 2hrs+ in one morning….

Not too bad isn’t it ..?

Normally about this time of the morning between 8am - 10pm, I will be spending on workouts.

Either at the gym or pool downstairs.

But for today, I have to skip that because I am watching this news announcement which scheduled for release at 0030 GMT ( about 0830 am in Singapore )

The Set-Up is too good to give it a missed actually….* smile *

I missed my exercises for one morning….but made $2k for this trade…

Worth it at all ?

You tell me ….* smile *

So What’s The Conclusion For This Trade Then ?

You seen the results ( & profits ) from this AudUsd trade based on news trading strategy.

You seen the entire decision making process as well..

Is it hard at all ?

Yes and NO….right ?

Yes…it is hard IF You don’t know how to do it…

NO…it is NOT hard at all but rather EASY once You can see things like I do……

Agree as well ?

So my conclusion is that - IF You are NOT confident in trading such volatile & highly impactful news announcment yet…

Perhaps spending a little bit more effort to master what You should then…

It would definintely PAY OFF and reward You very well in the long run too .

Remember this :

- A very bad or very good News Announcement..

- Combined with Simple Price Actions in the forex market..

It can really give You a ( Very ) High Winning Accuracy….no doubt about this.


No point worrying about getting caught in the WRONG direction because the market is too volatile..

There’s no need to be feeling fearful or worrying about Your trade at all - Once You can
combined these 2 Critical Elements for such News Announcement trades as well.

Alright. So much for this strategy on :

Combining Fundamental News Announcement + Simple Price Actions in the market


Practise it…..Master it…

And then add this Powerful news trading strategy to Your arsenal - To help You profit from the forex market with high confidence & accuracy in no time !

————————————————————————————————————————-

Recommended News Trading Program

- For You Guys Who Are Serious About Learning More

News Profiteer Program

This News Profiteer program is created by a professional trader name Hentry Liu.

Whom successfully Profited more than Usd$100k in just 90 days solely trading fundamental news..

Spending only 2 hours daily from home.

And now he has created an ebook which explains the exact same news trading strategy and made available to help other traders in need.

Having read through the 100+ pages ebook, I must confess that the news trading strategies revealed in there are actually ” Very Unconventional & Unique “.

I have not seen them anywhere else …….no joke.

Also, as a member, You will also get his daily LIVE ” insider ” commentaries & tips on trading
the upcoming news release.

I know there are a lot of merchants out there that simply ” disappear ” once you purchased their program.

But not for the case of Henry’s news profiteer program.

He is always around contributing his ” insider ” tips to help and guide fellow members along.

Worth checking out…… if You’re serious about learning More Effective, Proven & Time-Tested News trading strategies to ace the fx market.

Here’s the link for You to read more on the News Profiteer Program :

=> http://www.forextradingempire.com/recommends/NewsProfiteer/

Happy checking out ya.

Thanks for reading this far.



Sincerely,
-Aaron Tan ( your trading friend )

Deciding on a Correct Stop-Loss for your trades can be a very tough task for most….

Especially the newbies and those whom are struggling with their trades.

Setting too tight a Stop-Loss….your trades always get Stop-out unnecessary

….( although you’re right about the trend in the first place )
On the other hand…..setting too BIG a Stop-Loss, you could not achieve a good risk/reward ratio…

….Which result in deficit & yet another losing month for your trading account .

( capital getting lesser & lesser ….month after month )

Sometimes you even thought of  just ” Heck-Care ” about the Stop-Loss and just trade WITHOUT one…

But on the other hand, you’re feeling very fearful and could not trade with a peaceful mind…

What can be done about this problem in your forex trading then ?

Any solution in the first place ?

Of course there is !

And later,  I am going to share ” my way ” of placing a Stop-Loss Strategically for my trades….

- Which has been proven very effective in Preventing Stop-Loss getting hit unnecessary.

In the event that it does get hit, it means I am lucky and protected by the Stop-Loss.

Hence, saving the WRONG trade from draining my account and wiping my capital with the DEFICIT.

Many fellow readers have wrote in to me asking …

…..or rather seeking solution to this issue on Stop Loss setting .

So I actually spent about 3 hours by the pool side typing this article to share with my readers.

( while watching my baby and wife playing in the baby pool …* smile * )

Later I will be sharing my proven technique on How to place a Stop-Loss strategically for forex trading.

It is not a 100% winning kind of technique of course..

Nothing is guarantee in trading game ….and you and me already know that.

However, by understanding and then executing this proven technique on placing Stop-Loss.

I am confident that anyone can avoid seeing their Stop-Loss getting hit UNNECESSARY ……
again and again….

Why is this technique so effective then….Aaron  ?

The reason is very simple here.

Because it capitalised on the ” natural market behaviour ” .

When I am still learning as a newbie, I also face such problem of getting Stop-Loss hit ….again and again…” UNNECCESSARILY ” as well …

And it is by ” finally ” understanding this technique on how to place stop-loss stratetigically…

I then able to see tremendous improvement for ALL my trades…….and my account started to grow exponentially after.

Getting 35-50 pips Stop Loss hit once or twice is not a big issue …as long as good money management
is being used.

HOWEVER….

What if we are talking about 8 or even 10 trades getting hit again….and again…

That’s already over a FEW HUNDRED Pips down the drain ….right !

And only to see the trend goes your way…

In your heart, you would never fail to think about this :

“….IF ONLY I SET MY STOP LOSS 10 PIPS MORE ! “…

You would not get HIT then because the trade rebound and go at least 120 pips the direction
YOU WANT.

The above is a very common scenario (  problem  ) most failing struggling traders face in their
trading indeed…

I knew it….because I have been there once too….* not afraid to confess ! *

But that’s in the past then.

Now with this technique, I am getting very good results.

Because I know the with the ” Unique way ” I set my Stop-Loss, it is PROTECTING my money !

Alright….let me share this exact techique on :

How To Set Stop-Loss STRATEGICALLY…. With You next

Read the entire post for details.

There are many different scenarios that can happen in the forex market - That’s an undeniable fact.

So I can’t possibly show examples for ALL - That’s also understandable right .

But , I will show 3 most common ones.

These 3 scenarios are good for both a Sideway as well as a Trending market.

Hence, I am sure you guys would have no problem executing it for your trades too.

Alright..let’s go !

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The Main OBJECTIVE Of A Stop-Loss In Your Forex Trades

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Just as the name implies…

It is a Stop- Loss !

…. That means if a price can BREACH a certain price level, you would want to EXIT at that point.

If  you go LONG/BUY previously..

Then the Stop Loss would ” SELL ” for you at a certain price point you pre-set…

Nothing more complicated than that.

So to truly fulfill the main purpose of a Stop- Loss….

….. and reap the maximum benefits from it..

=> You Should Only Place A Stop-Loss At A Point That The Price Should Not Breach ! “

And if it gets breached, you would want to get out because there is a high tendency that you’re
WRONG about the direction.

Simple and very very logical right ?

Alright….next , let me show you 3 different scenarios on what I mean by……
” Setting Stop Loss Correctly & Strategically ! “..

( …….And that is in a Crtical ZONE that the price should NOT be reaching ! )

Let’s get started :

” UNIQUE ” Way Of  Setting A Stop-Loss …

( 3 common scenerios for You …)

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Scenario 1 :  Place The Stop- Loss After A Price Pull-Back/ Retracement

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When a trend starts to develop , it would Pullback /  Retrace at some point due to profit taking.

Even if it is just a short term trend in the market, a Pullback/ Retracement would also occur.

( due to profit taking ….)

However, in order to secure high winning trades, I would normally go for the very ” FIRST ”
Pullback /  Retracement though.

As it is more reliable and there are MORE Potential for the price to go further.

Here’s an illustrations to show what I mean :

Placing the Stop Loss slightly below the Price Pullback is indeed a very good strategic location.

That’s because a Price Pullback is a ” turning point “  for any trend to resume.

Even if it is NOT a strong trend, but at least we know that the price is going to move quite a distance in ” That ” direction.

SO….you and me can go in and grab some pips ( profits ) out of this set-up.

And because it is a Pullback that we are taking advantage of here….

Hence the ” Risk/ Stop-Loss value ” we need to use can be minimized too.

Best of both world indeed.

Another technique that I like to use to further confirm that it is a more reliable Pullback is to spot for congruence such as the 61.8% Fibonacci that coincide with the pullback.

If you spot a pullback that you would like to use as an entry point, do make sure that that pullback at least coincides with the 50% or 61.8% fibo level as well.

This would give you further confirmation and of course make it a more profitable set-up to go in.

Just bear in mind that a Price Pulllback is simply a ” turning point ” for the trend to resume in the previous direction.

So basically you are taking advantage of the ” low price ” to get in to BUY again.

( The conventional way of  ” Buy Low…Sell High ” applies )

So much for that….

Next, I am going to talk about a Symmetry Triangle BREAKOUT.

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Symmetry Triangle Breakout

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If you have been trading currency pairs such as the GBP/USD or GBP/JPY..

Then you would also agree that they are very prone to such Symmetry Triangle Breakout too.

Because the LONDON financial market is the biggest around the world and most of the time during the first 2 hours of London Open…

The volatility is extremely high and having spotted such Symmetry Triangle Breakout set-up..

It is a strong hint that both the interests and volumes are very high.

Meaning if it BREAKOUT is to the up-side, then the buying interests and volumes are very high.

So we can go in and grab some nice pips from this volatility.

Another scenario which is very prone to such Symmetry Triangle Breakout is during a major news announcement.

Especially those which carries more weight such as the NFP or Interests Rate Announcement.

So how do You place the Stop - Loss for such Symmetry Triangle Breakout ?

Let me show You the strategy next :

Just like the old saying of  :

“…There would always be extreme peaceful-ness before a catastrophic STORM ! “

This Symmetry Triangle BREAKOUT is somehow the same..

Of course with the latter, it is not a natural disaster though.

But if one is not using proper risk control, he/she might lose a lot of money.

In the above illustration, the symmetry triangle breakout is happening on the GBPUSD

A very volatile pair especially during the first 2 hours of the London Open.

That BREAKOUT candle for this example also happened on the market open as well at 7am GMT.

A Stop- Loss placed just below the level ” before ” the breakout is a good strategic place indeed.

Because with such BREAKOUT, the interests & volume are very extremely high.

So if the price can reverse and breach the level before it breakouts, then it is better for you to EXIT.

That’s the principle governing this set-up.

Now you know. * smile *

Alright, next I will be talking about the 3rd scenario which is also the last one I am sharing here.

And it is the Morning Star candlestick formation !

In the above 2 examples, I am talking about set-ups for an uptrend if you notice.

So there must be a point where the price would Turn Down & Reverse.

This is the nature of any financial market indeed.

That’s why I choose to include a candlestick formation for a uptrend reversal - The Morning STAR Candlestick Formation that is.

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Morning Star Candlestick Formation

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If you have been trading the forex market  for sometime now..

Then the ” reason ” behind the formation of such candlestick might not be new to you anymore.

But for the sake of other newbies, I will just explain briefly here though.

Bear with me for a while ya.

This Morning Star candlestick formation is actually an ” Uptrend Reversal ” pattern.

It is mostly spotted after an up-trend or rather…..after the price climbed for some distance.

If you refer to the picture above, you would notice a DOJI right at the top of the move…

Which basically implies there are indecisiveness in the market.

And soon after, if there’s a Bearish Candle Closed that follows…

Then it can be considered a Morning Star formation.

When that happens, it is a good opportunity to go into the market for some SELLING of course.

The beauty is that it is very reliable and one of the easiest pattern to spot when it happens in the market !

Here’s how to place the Stop-Loss having spotted this formation :

Very direct on this formation as you can see above too.

Upon spotted the Morning Star Formation , just place the Stop Loss above that DOJI.

It is another very strategic location where the price is NOT likely to breach at all.

Why so ?

Because previously at that level, the buyers are not showing any BUYING interests anymore..

Instead, shortly after that….the sellers came into the market and start dominating.

In any trading game, as long as you are following the MAJORITY….

You can ride on the wave and grab some pips ( profits ) and make your account fatter too.

Important points to note here is that :

1)  A morning star formation spotted on a bigger time frames ( such as 4hour or daily ) would be more reliable than the smaller time frames ( such as 5 / 15 minutes )

2)  As this is a ” Up-trend Reversal ” candlestick formation, it means you would be trading the counter-trend too most of the time.

So to increase your odds of winning with this Morning Star set-up, try to combined other congruence such as a Double Tops/ Bottoms  would definitely be good to increase winning accuracy.

3)  Also, if the BEARISH CANDLE BREAKOUT is too huge - Meaning the price has already moved more than 120 pips perhaps, then you might want to wait for the price to retrace/pullback abit first before deciding to commit.

This is to prevent You from using too HUGE a Stop-Loss for that trade.

Achieving a Good Risk/Reward ratio is still paramount here no matter which set-ups you are going for.

Alright, with this, I shall conclude this article then.

Although this technique of ” Setting Stop-Loss “  is not 100% accurate..

But I can confidently tell you that if You can follow the way I place a Stop-Loss as explained above…

Your trading accuracy could also be increased tremendously - Especially when you do not have to worry about getting the stop-loss hit….again and again.

Frustrated to experience that ….I know.

I used to experience that too during my beginner’s days….but once I understand the ” objective ” of placing a stop loss..

Things took a drastic change - For the BETTER of course ! * smile *

Most of the time, these set-ups would not be so ” perfect looking ” and it makes it very hard for you guys to identify is it the set-up / formation you thought it is..

When that happens ?

How…?

Well….just step aside and skip that pair then.

They are more than 15 pairs in your trading platform for you to grab profits from..

So why bother taking risk when it is affecting your judgement and trading confidence ……right ?

Thanks for reading this far.

I hope by now you have understand how to truly place a Stop Loss ” strategically ” for all your trades in the days to come…..

…..and end those days of fearful,frustration ( due to seeing your stop loss hit…again and again ) once and for all !

I shall pen off for now.

Feel free to read other forex trading strategies in my blog ya.