Forex - A NEW Way To Enter Your Trades (if you want to win more trades, use this...)
Published: 2020-07-01
Status:
Available
|
Analyzed
Published: 2020-07-01
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
The speaker will present a simple trading strategy and explain how buy stop and sell stop orders can enhance its accuracy.
"I'm going to teach you a little strategy that's extremely simple and then I'm going to show you how you can use buy stop and sell stop orders to increase the accuracy of almost any strategy and almost any entry reason."
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A specific candle pattern is defined: the entire candle body must be within the top third of the low-to-high range of the candle.
"I'm looking for essentially are candles that look like the one you see on your screen and this candle it's just a candle in which the body of the candle closes and opens or the entire body of the candle is within the top third of the entire candle from the low to the high."
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To identify the 'top third' of a candle, a Fibonacci retracement is drawn from the candle's low to its high, with the 33.3% level serving as the threshold.
"The way I point these out is how pull the Fibonacci retracement from the low of the candle to the height of the candle and I have a Fibonacci retracement level at 33.3% giving me the top third of the entire candle from low to high."
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The described candle pattern ('33.3 candle') is to be identified when it appears above the 20-period Exponential Moving Average (EMA).
"What I'm going to be looking for is these candles I call it a 33.3 candle and I'll be looking for these above the 20-period EMA right now this blue line you see on the screen is the 20-period EMA"
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A specific trade setup based on the presented strategy resulted in a stop-out.
"If this was the case let's see what would have happened to this trade we would have pushed down down and then eventually stopped us out"
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To improve accuracy, instead of a market order, a buy stop order 5 pips above the entry candle's high will be used for confirmation.
"Instead of placing a market order let's say we want to place a buy stop order above price for confirmation we will place a 5 stop order above that entry candle and use that as extra confirmation"
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Placing a buy stop order above the entry candle serves as additional confirmation, aiming to increase the strategy's and entry's accuracy.
"We're using this as extra confirmation to give us more accuracy on this trading strategy and on this entry reason"
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A specific buy stop entry price is set at 1.1040, which is 3 pips above the candle high of 1.1037.
"If the high of the scandals one point 103 7 we would go one point 104 oh and that will now be our entry"
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Using a buy stop order above the entry candle prevented a losing trade that would have occurred with a market order.
"We would have missed a losing trade or we would have avoided losing money on this specific trade and the only thing differently was placed a buy stop order above our entry trick"
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Placing a buy stop order above the entry candle helps avoid losing trades when the market pushes down, while still allowing entry if the market takes off.
"You hardly ever lose a trade because of doing this because if the markets going to take off it normally takes off and will hit your stop order bet that three pips above your entry candle whereas if the market is gonna push down like it just did it you avoid that losing trade by having that buy stop order above price"
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The principle of using buy stop orders above and sell stop orders below entry signals can be applied to various candlestick patterns to enhance accuracy.
"The same thing would apply to any candlestick pattern that you used for entry if used an engulfing candle using the buy stop order above it or sell stop order below it would help you to increase accuracy of that entry reason depending on your trading strategy"
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For short entries, a sell stop order would be placed below the entry reason's signal, with the same stop-loss and target principles applied.
"The self thought would just be the opposite you'd be looking for injury reason to go short and you would be putting your sell stop below that same stop in same target"
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The speaker will demonstrate an advanced method for trading trending markets using buy stop and sell stop orders to capture high-momentum moves.
"I want to show you how to capture really accurate moves if the markets trending using these buy stop sell stop trace"
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A catalyst, such as news or a major structural level, is required before initiating a breakout trade.
"You want to have some type of catalyst before looking for an entry like this for me a catalyst is either something news based that I know is going to push that market around pretty well or a major level of structure"
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A breakout is considered when the market hits a major level, pushes down, and crosses below the 20 EMA.
"If this market hits that level and then crosses below that 20 EMA we were just looking at the blue line on the screen is still the 20 EMA so we've come up into our level we're now pushing down if we get across below the 20 EMA at this point I'm gonna start looking for a possible breakout rates"
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The daily structural resistance level serves as a catalyst, suggesting the market might continue downwards.
"We've had a catalyst the catalyst fitting the catalyst for me thinking that this market is gonna keep going more being this heavy daily level of structure resistance"
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After identifying the first swing low that crosses below the 20 EMA, a sell stop order will be placed just below it to anticipate a breakout downwards.
"I'm going to start looking for is this first swing low after this push down that crosses below our 20 MA when I get that swing low I'm going to put a sell stop order right below it expecting this market to break out and push down"
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The objective is to capture the initial move of a downtrend, aiming for a favorable risk-to-reward ratio.
"What I'm doing is try to capture the first move on a downtrend that hopefully will last much longer and give me a really good risk to reward ratio"
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A sell stop order is placed a few pips below a identified swing low to enter the market on a potential downward breakout.
"I would have a sell stop order let's color it red so this is a sell stop order and I would have that order a few pips below that swing low expecting this market to break out and push down"
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Upon crossing below a specific level, the sell stop order will execute an entry at approximately 1.0900.
"If the market comes to this level if we cross below this level what this sell stop orders going to do is enter me into the market at around 1.09 - Oh"
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For breakout trades, a stop-loss is placed just above the entry candle to achieve a good risk-to-reward ratio.
"On these breakout trades in order to give myself a really good risk to reward is put a stop loss just above my entry candle"
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Targets for breakout trades are set around the previous support level of the prior uptrend.
"For a target I would like to get targets off somewhere around the previous support level of the previous uptrend before hitting that dated level and pushing down"
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For upward breakouts, the process is reversed: hit a daily structure level, cross above the 20 EMA, identify the first swing high, and place a buy stop order above it to capture the start of an uptrend.
"For this type of trade it would be exactly the opposite for a bad trade but we'd be looking for for a buy stop is the market to hit let's say a daily level of a major structure push up cross above our 20 EMA we'd be looking for that first swing high put a buy stop order above that first swing high and we'd be looking to capture the beginnings of an uptrend to get a really good to reward ratio on that trade"
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It is crucial to have a catalyst (news or major structure break) before employing this breakout strategy, otherwise, it is likely to result in losses.
"You want to have that catalyst there must be a news event there must be this market coming off a major level of structure breaking below or above the 20 EMA before looking for trades like this otherwise this type of strategy will eat you alive and probably cause you to lose money"
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