HOW DO YOU STOP LOSING IN TRADING?
Simple. Stop trading the Smaller Charts.
Larger Charts offer the same quick trades with more Reliable Setups, but without the Volatility, Stress and Fear that lead to losses!
Duane
DRFXSWINGTRADING
Hey traders,
Latest trade from my strategy came from the USD CHF that provided a 2.00% Rate of Return in just 4 Hours, as I traded the Sharp False Breakout Reversal on the Daily and 4 Hour Charts. A strong Bear Crown Setup above the Range indicated the start of the reversal, which was exited succesfully for 34 Pips, just head of the Sharp Bullish Reversal and Trendline Break at Support.
This has pushed the Rate of Return of the new strategy up to 23.78% in just 3 Months, coming from only 14 trades and just a few small losses along the way!
SHARP FALSE BREAKOUT REVERSAL
Daily Chart shows the False Breakout Reversal that started with a Bear Crown Setup at Resistance. Based on the theory of False Breakout Reversals, the pair was likely to take us down back to Support on its way to a Break below this boundary…
Given this likelihood of a move to Support, entry then took place on the 4 Hour Chart, with the Inner Downtrend Line being used for the Stop Loss. This is in sync with my trading strategy…
After just a few hours, the pair continued to Support as expected to provide me with the trading gain…
…and as you can see, this gain was captured just ahead of the Sharp Reversal and Trend Line Break that took place at Support…
Again, this showed the importance of accurately identifying market setups and trading targets. This allows us to Maximize on our trading gains ahead of Sharp Reversals that can quickly take away our profits!!
Stay on the Larger Charts, use accurate Japanese Candlestick Patterns, Trendlines and Consolidation Patterns, and long term success can be ours in this dangerous Trillion Dollar Market!!
Duane
DRFXSWINGTRADING
THE REALITY OF THE FOREX & WHY PEOPLE FAIL
I recently watched a few videos on the Forex on YouTube this weekend that made me realize once again that there continues to be a significant amount of misinformation and irresponsible advice being promoted that is leading traders in the wrong direction.
Many people still think that Forex cannot be traded profitably and that it is similar to betting because there is no pattern to the market. People also still think Demo trading should be ignored and you should go Live as quickly as possible because it doesnt reflect real conditions and you won’t take it seriously…bla bla bla.
Even though I could spend all day speaking to these and other issues, I’ll just provide a few points that summarize my opinion about Forex Trading and why most people fail
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Forex is difficult because there are no globally certified Universities/recognized institutions that teach it compared to other disciplines like Economics or Medicine. You cant earn a degree in Forex Trading after a 3 or 4 Year programme with a globally accredited curriculum that guarantees your success. This is why people are left on their own to try to predict a difficult market, using less than perfect trading tools.
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Despite this major challenge, the Forex can be analyzed, predicted and traded with a large degree of certainty, because like other markets, Forex has a pattern and cycle of behaviour that is repeated every week. Any market that has these features can be traded and accurately predicted. If this were not the case then Central Banks and financial institutions would not be able to do what they do successfully.
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The other problem for Forex traders is that we are trying to predict market direction on a very short term basis using tools that are not sufficiently tested, are not as sophisticated, recognized or even used by Central Banks and Investment firms. This is why most fail to find a method that works longterm.
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Its even harder to do so if we try to trade the smaller time frames which are a lot more volatile than the larger time frames, or try to trade everyday. Trading every day exposes your capital and your emotions to ups and downs that most people cant handle. The highs from winning or the fear you feel after experiencing a loss one day can easily cloud your judgement the next day, leading you to make careless mistakes.
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Even though the tools of Trendlines, Candlesticks, and Indicators are not used by Central Banks etc, they can still be accurate enough to be profitable. The challenge is to extensively test them for several years under all market conditions in order to find the right combinations that work, similar to the Regression Analysis that Banks do and the trial and error process needed to establish reliable relationships between variables. The problem is that most people have never had the time nor the willingness to do this and end up using/buying systems that only work for a very short time.
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The successful Forex Traders are the ones who have found the right combination of these factors. They have taken the time to extensively test them for several years and have been rewarded with profitablilty by either trading daily or a few times per week or month.
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As you’ll see in this thread, however, my preference is to trade the larger charts just a few times per week. You will have less trade-related stress and have more time to recover from the emotions of wins and losses. It also allows you to have a normal life away from your trading screen, making it a more practical option for most people with a 9 to 5 job over the Long Run.
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Start and practice on a Demo Account for at least 6 Months. Most fail becaise they jump too early into Live Trading. The reason brokers provide Demo Accounts is that they are aware of the tremendous difficulty and failure rate of this market. Airline pilots practice with flight simulators, you take practice exams before a major exam and you learn to drive with a more experienced driver at slow speed and in a controlled environment and take your driving tests before being allowed to drive on your own! Its the same reason Demo Trading must also be TAKEN SERIOUSLY other wise you’ll be inadequately prepared for real market conditions.
So I hope this clarifies many of the doubts you have about Forex Trading as well as how and why you must take it seriously in order to guarantee your Trading Success. Find a methodology that works that you are comfortable with, practice it on a Demo to achieve the Rate of Return you want to achieve on a Live, then trade with a Live Account. This practice period will give you the confidence and experience needed for Long Term Profitability.
Duane
DRFXSWINGTRADING
any recent updates please? I really find this analysis useful, just need some up to date if possible please!!
Hey man, hope youre good in these crazy times.
Back after a long break, after testing a new strategy to capture 6% to 8% Per Trade. This will complement the current one that targets 3% to 5%.
Both will also be based on the Signals and Patterns of the Daily and 4 Hour Charts, with the focus being on trading…
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False Breakout Reversals
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Movements between Resistance and Support within Consolidations.
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Consolidation Breakouts targeting a Major Support or Resistance Price Point that is nearby.
An example of this 3rd Strategy and my larger trading targets was this EUR CAD trade done this week.
It provided 106 Pips and a Rate of Return of 6.5% between Thursday of last week and Tuesday this week.
Check out the preview of the Full Video Analysis below.
Ignoring the Smaller Time Frames and focusing on the Stable and Reliable Setups offered by the Larger Charts will almost guarantee Long-Term Profitability
Regards
Duane
DRFXTRADING
Hey Traders
Another trade here to report.
Got 86 Pips from the USD CAD to provide me with a 4.93% Rate of Return.
The trade took advantage of the Consolidation Breakout on the Daily Chart…
…and the Downtrend that this created on the 4 Hour …
So as usual, the Daily Chart provided the Market Setup and Trend Direction, while the 4 Hour provided the Entry Setup.
The relevant sections of my Trading Manual that focus on Consolidation Breakouts were used.
Checkout the preview of the full Video Lesson for this trade.
Aiming for these types of Returns Per Trade will allow you to achieve large Monthly Returns over the Long-Run.
Duane
DRFXTRADING
Hey traders
Why did the USD CAD Reverse Sharply?
As you can see, later on in the week, the USD CAD reversed Bullish despite the fact that it was breaking out of a large Consolidation.
Normally breakouts from such large consolidations go on for days for several hundred Pips as illustrated here…
So why did this Reverse Sharply?
Because it had hit a Major Weekly and Daily Support at 1.2993…as illustrated with the Blue Line.
Regardless of the Size of the Consolidation, if a Major Support is close by, the market is VERY LIKELY to respond to it to either…
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Start a False Breakout Reversal
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Temporarily Pullback to test the brokenSupport Boundary before resuming the Breakout.
So either way, a rally and reversal is always likely at these Major Support Points and you should always exit trades at these areas.
Duane
DRFXTRADING
This is one of the bad habits guaranteed to lead to Self-Sabotaging Behaviour.
Because of the difficulty of trading the Forex and the pain associated with losing, especially if you are a beginner, it will always be tempting to monitor your trades to " Make Sure " that they have hit their targets. You will want to look for signs to confirm your decision about market direction and to possibly adjust your Stop Loss, or exit trades when you think you see the early signs of a reversal.
Now although this sounds like the rational thing to do to protect your money, it can actually be the WORST thing to do to ensure Long-Term Profitability.
FIGHTING THE MARKET
As with all markets, the natural dynamic of the Forex is that it will create waves, temporary reversals and even sideways movements before eventually hitting its targets. This means that a 100 Pip Bullish Trade can have a 20 or 30 Pip temporary reversal before resuming the move to a Resistance Target.
However, by watching the prices move up and down in front of you as part of this natural process, you will be tempted to exit trades too early or at least make unnecessary changes to your trades, out of FEAR that you will lose on the trade.
This means you can end up closing trades for smaller than planned Pips if you see these temporary pullbacks. This can be done by either closing trades at the current market price or being Stopped Out if you adjusted your Stop Loss along the way.
If this continues to be done over several trades, you will end up limiting your profitability as margins will not be as wide as they could be to cover losses.
SOLUTION?
SET PRICE ALERTS
Chosing a Trading Platform that allows you to set alerts will prevent you from being tempted to monitor trades.
If you want to check your trades before your targets are hit, configure the platform so that you cannot see the P/L, prices or Chart of the trade you are in but can see that the trade is still open. Many platforms have a Open Position tab that show how many positions are still opened with the number within brackets (1).
AVOID FX NEWS
Avoid watching FX News if your strategy is technical based - indicators, candlesticks etc. Watching news can tempt you to close trades or second guess yourself, if a news item reports a movement or projected movement in the pair that is against your trade direction.
However, these movements can simply reflect the temporary reversals that naturally take place, before the pair resumes the main trend direction.
These are the main Market Scenarios where temporary pullbacks are expected.
1 Testing of Broken Resistance/Support of Consolidation
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Testing of Broken Trend Lines.
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Testing of Broken Counter Trend Lines.
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Testing of Candlestick Formations.
Once you become familiar with these situations, you will become more relaxed about the movement of the market. You will be able to leave trades without yielding to the temptation to interfere, knowing that once you have a Profitable Strategy…
…most of your trades will be successful!
Duane
DRFXTRADING