I’m not going to post a link to this video because I don’t want to encourage anyone to buy into this, but I will address the reasons why I can’t support what he is proposing in this video.
Inexcusably Horrible Risk Management
The trader is proposing to use a 50 pip Take Profit and a 200 pip Stop Loss as a part of this strategy. That is negative reward to risk. 1 loss will wipe out the gains of 4 trades. You would need to have 90% win rate to be profitable. An 80% win rate would only breakeven with 8 wins for 400 pips - 2 losses for 400 pips. The risk management alone makes this strategy a non-starter.
Yes, you read that correctly. No analysis required. You wait for the 9 AM candle to close and you either buy or sell based on whether the previous day’s 6 PM candle was bullish or bearish. If it was bullish at 6 PM, then you buy when the 9 AM candle closes. This is not a strategy, this is using the 6 PM candle as an indicator without taking into context important things like market structure, higher time frame direction, areas of supply and demand, or the trend on the current time frame. There is no confirmation involved to eliminate false or low probability signals from the 6 PM candle. This is not a strategy.
Unfortunately, a catchy title with the words ‘money printer’ in it will attract new traders that don’t understand the importance of risk management and will be drawn in by an easy strategy that takes no effort in analysis. The only easy part will be blowing their accounts.
For misleading new traders, I have to unsubscribe. I liked his older videos because he didn’t have a lot of fluff and jumped straight into the charts without a long intro.
Side note: He almost made me choke on my dinner when he mentioned his 50 pip TP and 200 pip SL. I had to rewind the video 4 times to make sure that I heard him correctly, because no reputable or knowledgeable trader would dare say something like that out loud.
this is, for sure, a particularly horrible example (and there are a lot of far better things there too, i know) but it makes me shudder on behalf of the people trying to learn to trade from Youtube (because many of them are the ones with insufficient experience to distinguish between “reasonable stuff” and “just plain bonkers” - like this!)
Having got back to the guy’s actual video clip on Youtube it turns out to be evem worse than I had thought. He’s taking the colour of the 6:00am candle yesterday to determine whether he buys or sells at 10pm TODAY!
He ignores everything that price had done before then and everything that price has done in between then and now - this period is more than 24 hours. I’ve never heard anything like that before.
Even leaving aside the SL/TP distances ratio, this is mad.
This is really sad that usually people who have very limited, or even no knowledge of the market try to rip new traders off. I wish someday people understand that scammers are only looking to take their money away, not to help them to earn it.
I wouldn’t condone such a strategy, because that SL is way too wide for my risk tolerance.
But, I’m gonna play devil’s advocate here. What if he was able to be profitable with this strategy?
It’s his choice to make videos and NOT demonstrate it live. But I think it would be worth it for him to trade live and show how it works. His viewers would appreciate it, for sure.
No thank you. I’m old school, I prefer authentic human responses. Now that we have the ChatGPT 3.5 response out of the way (TLDR), what is your personal opinion on this trader’s proposed strategy?
So, I wanted to address the response you gave to my post and provide some clarity regarding the ChatGPT example.
I completely understand your preference for authentic human responses, and I apologize for any confusion caused by the ChatGPT reference. I just threw in that ChatGPT 3.5 example for some context, you know, to make things relatable to what we’re talking about.
From now on, no more AI stuff! I’ll just give you my honest take without any fancy tech-generated content. Let’s keep it real!
Regarding the trader’s strategy, I’m believing towards it being a legit approach. Here’s why: brokers usually do their rollovers around 6:00 pm NYC, which leads to contracts transferring to the next trading day, opening at 9:00 am NYC. This generates a liquidity bump, and you can capitalize on that with a 50 pip take profit and a 200 pip stop loss for some breathing room. I see potential in this strategy, but it’s essential to be cautious about specific aspects.
I value productive conversation, and I’m more than willing to answer any questions or discuss further on this topic.
Thanks for getting it, and I look forward to engaging in meaningful conversations with you.
I’ve chosen to withdraw my previous post due to its length, which might not have been the most engaging read. I prefer to provide more concise and focused responses in the future to ensure better communication. Thank you!
Other things that Simple Forex says are not crazy. They’re not radical either but that’s not a negative. I think I’ll re-set my demo account capital to a nice round figure and start running this strategy.
Yes he did better content in the past but sometimes contradicted himself. He has a trendline strategy in some videos but in other videos says trendlines don’t work. He used to promote a certain broker so I assume this strategy is sponsored by the broker since they will be the only winners.
Let us know how it works on demo. I won’t be trying it myself. No analysis, negative RR, and an 80% win rate required to breakeven make it a non-starter for me.
