Check Out This "MAGIC PILL" To TRADING PROFITS!
Published: 2020-03-04
Status:
Available
|
Analyzed
Published: 2020-03-04
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
The speaker will detail a successful trade on Dollar Yen that resulted in significant pip gains.
"I'm going to share with you the analysis behind an awesome trade we had on the dollar yen that banked in a major amount of pips."
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The speaker explains their rationale for shorting the Dollar Yen pair after a significant upward price movement.
"we decided to go short here on the dollar yen after this large push up and right now I want to talk to you about the reasoning behind doing so why was it that I picked this area to go short in here on the dollar yen when there's been so much behind pressure beforehand"
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A specific trade on Dollar Yen yielded over 400 pips in profit on the second part of the position.
"we ended up banking in a little over 400 pips on the second part of that position"
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A 12:1 risk/reward trade with a 400 pip move in a few days on Dollar Yen is a rare, approximately annual event, dependent on technical analysis aligning with a catalyst.
"this is one of those trades that only happens about once a year and the reason is because this trade only exists this type of trade where you make a twelve to one risk reward where you have this four hundred pip move in a matter of a few days only happens when your technical analysis approach lines up with a catalyst"
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The speaker emphasizes that their trading decisions, including the Dollar Yen trade, are based purely on technical analysis, independent of news catalysts.
"I would have placed this trade whether there was a news catalyst or not I'm a completely technical trader"
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The speaker identifies 104.81 as a key future extreme level for Dollar Yen, as it has not been touched in the past five months.
"I'm gonna be looking at this pair very closely if the dollar yen gets down to 104 point eight one because this is a level of structure that has not been touched in the past five months and then also looking left previously was it touched for five months this is my next extreme level on this specific currency pair"
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A trading strategy must be validated through historical data to confirm its past effectiveness, as there's no guarantee of future performance if it hasn't worked previously.
"you have to take this and test it through historical data that's called validation you're gonna validate that this has worked in the past if it hasn't worked in the past there's no reason to believe it will give you an edge in them in the future"
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A trading strategy's 'magic pill' involves having extreme structure levels as a condition, along with defined entry reasons, stop-losses, and targets.
"so we have extreme levels of structure as one of the conditions of our strategy that's going to give us an edge so that magic pill is actually almost complete after conditions all you need is an entry reason stops and targets"
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A specific trading strategy is proposed: entering short on a red candle at an extreme resistance level, with the stop-loss above resistance and a 2:1 risk/reward target.
"what if your conditions in this case was that you look for these mmm extreme almost said major again extreme levels of structure and your entry reason is a color change candle if the market hits an extreme level of resistance and puts in a red candle then I enter on that red candle my stop-loss goes above the major level of resistance and my target is a two-to-one risk reward"
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A trade on Dollar Yen resulted in over 400 pips profit on the second part of the position.
"we ended up banking in a little over 400 pips on the second part of that position"
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Another trading strategy example is given: entering long at an extreme support level (untouched for five months) upon a green candle confirmation, with a stop below support and a 2:1 risk/reward target.
"here at this support level let's do another example of that strategy we have an extreme support level has not been tested for five months looking left has not been tested for five months looking right the market comes down to that level we're waiting on a color change if it's a support level we would want to see a green candle after touching that level with that being the case our entry would be here our stop would be below the entry candle or below the level of support and our target would be a two-to-one risk reward"
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The described trading strategy is not rigid and can be adapted to different trading styles, such as using shorter timeframes (e.g., five days on an hourly chart for day traders) instead of just daily charts.
"you can adapt this to your own trading if you're a day trader you may want to wait five days on a hourly chart or something like that some of you along those lines this isn't set in stone has to be on the daily chart feel free to take a adapt this to your own trading"
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A trade on Dollar Yen resulted in over 400 pips profit on the second part of the position.
"we ended up banking in a little over 400 pips on the second part of that position"
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Mastering risk management involves using a spreadsheet to analyze data from a tested trading strategy, specifically to determine maximum drawdown and inform the risk management plan.
"mastering risk management comes down to plugging in all of these numbers into a spreadsheet once you have tested the strategy you test the full strategy the magic pill of risk management is plugging those numbers into a spreadsheet to see what your maximum drawdown could be to see what your risk management plan needs to be"
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A Dollar Yen trade achieved a 12:1 risk-reward ratio due to a small stop-loss based on the hourly chart.
"we had a really small stop-loss because our stop-loss was based on the hourly chart so it put us at a 12 to one risk reward on this trade"
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A specific type of trade (12:1 risk-reward, 400 pip move in a few days) on Dollar Yen occurs approximately once a year.
"this trade only happens about once a year"
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Risk management is crucial for trading success; attempting to make money too quickly by risking 5-10% or more of an account per trade leads to account blowouts, not mastery.
"mastering risk management is something that is so essential to trading success because so many traders are out you're trying to make as much money as fast as possible and doing so will lead you down a path of blowing an account very quickly by risking five to ten percent of your account per trade or maybe your whole account per trade that's not how you master risk management that's how you blow an account"
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A successful risk management approach typically involves risking between 1-2% of the trading account per trade, a level the speaker finds comfortable and encourages others to determine for themselves.
"mastering risk management once through with once finished you'll probably be risking between one and two percent per trade at least that's something I'm comfortable with it's something you have to figure out what you're comfortable with"
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The Dollar Yen market was extremely overbought prior to a specific trade opportunity.
"this market was extremely overbought"
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The final 'magic pill' for trading success is discipline: adhering to the risk management plan and strategy, even during losing periods or drawdowns.
"the final magic pill to trading success is staying disciplined to that risk management plan and staying disciplined to that strategy even through periods of drawdown through periods where you're actually losing money that is difficult"
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Extreme structure levels in trading are defined as the highest or lowest points in the market within the past five months.
"extreme levels of structure The highest point in the past five months looking left and looking right or the lowest point in the past five months looking left or five months looking right"
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A sound risk management plan reduces stress and emotional trading during drawdowns, thereby enabling disciplined adherence to the trading strategy.
"your risk management plan puts you in a position where you're not super stressed out you're not you know super emotional whenever you go through a drawdown your risk management plan puts you in a position to be emotional which gives you the ability to be disciplined to the strategy even though you're going through a drawdown"
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The speaker will closely watch the Dollar Yen pair if it drops to 104.81, as this is a structural level not touched in five months.
"I'm gonna be looking at this pair very closely if the dollar yen gets down to 104 point eight one because this is a level of structure that has not been touched in the past five months"
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Extreme levels of structure are a condition in a trading strategy that provides an edge.
"extreme levels of structure as one of the conditions of our strategy that's going to give us an edge"
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A trading strategy involves entering a trade on a red candle when the market hits an extreme level of resistance.
"extreme levels of structure and your entry reason is a color change candle if the market hits an extreme level of resistance and puts in a red candle then I enter on that red candle"
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A trading strategy includes placing a stop-loss above the resistance level and targeting a 2:1 risk-reward ratio.
"my stop-loss goes above the major level of resistance and my target is a two-to-one risk reward"
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For day traders, the 'five-month' rule for structure levels could be adapted to 'five days' on an hourly chart.
"if you're a day trader you may want to wait five days on a hourly chart or something like that"
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Risk management is crucial for trading success, as a focus on making money quickly often leads to account blowouts.
"mastering risk management is something that is so essential to trading success because so many traders are out you're trying to make as much money as fast as possible and doing so will lead you down a path of blowing an account very quickly"
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After mastering risk management, traders typically risk between 1% and 2% per trade.
"mastering risk management once through with once finished you'll probably be risking between one and two percent per trade"
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