Home Trading Strategies Forex Trading: 3 BIG Mistakes You’re Probably Making (and Unaware of)

Forex Trading: 3 BIG Mistakes You’re Probably Making (and Unaware of)

Forex Trading: 3 BIG Mistakes You’re Probably Making (and Unaware of)

so here’s the thing I’ve been you know educating traders for over the last six seven years and what I’ve realized is that there are many traders who are actually making one of these three mistakes and the worst part is this mistakes right I actually being taught in textbook costs us you know shine on forums and many traders just don’t realize right that this is actually costing them a lot in the long run so in today’s video I want to share with you what are these three mistakes and how you can actually avoid it okay but first right do me a favor okay hit that thumbs up button and subscribe to my youtube channel so you don’t ever miss a trading video from me have you done it okay just below hit that thumbs up subscribe and with that said right let’s begin so the first mistake is that you set your stop-loss a market structure what do I mean by this so let me explain so you’ve been taught right you know maybe from textbooks you know on forum where you know traders say steady you know when you go long right you should always you know put your stop loss you know below support right below support here below support okay or if you are short right you should put your stop-loss above this resistance over here and the problem with this is that let’s say right the market is in a region it’s over here if the market there is a lot of let’s say orders above this house alright let’s see a lot of traders they are short okay so when they put their stop-loss they put it just above resistance so over here there is a lot of buy stop orders above a lot of buy stop orders okay so what happens is that the smart money what they’ll do is that they’ll push the price higher this so let’s say the prices over here they’ll push the price higher triggering this cluster of buy stop orders so when they push the price I add this means that they have to go long at this price so they have to buy and it push the price higher okay so what happens is that when the price hits this cluster of stop orders this is going to fuel further buying pressure because you know when the traders who are shot the the price hits get stop-loss right this is actually buy stop orders in the market so it fuels further buying pressure and what would a smart money smart money at this point do well they ought to take profits right it’s time to take profits at this particular area over here ready by stop orders are where traders put your stop-loss right so this a buy stop orders is triggered a smart money and then you know look to take near profit so this would kind of like neutralize the effect so this is why the price often you see comes into this area of resistance and then BOOM smashes lower back into the range okay this is very common phenomenon right and even similar if the price is around this level over here if there is a lot of sell stop orders over here below the pot you know traders who are long they put your stop-loss just below the pot right over here would attract right a large cluster of cells top orders so as the price comes lower try to sell the smart money no go shot around here push the price lower okay hitting this cluster of stop-loss right there by neutral a neutralizing the effect again so for example the sell stop order from traders who are long will push the price lower the smart money who is short right we look to buy back their position neutralize the effect right and what happens is that again the market then reverse back up higher so this is a very common phenomenon and let me share with you right a few examples on the chart so you can see over here this is one example notice the price again this is an obvious market structure price comes in spike through above these highs reverse reverse the lower right another one over here market structure here so traders tell you know put your stop-loss right you know below swing low below support price comes in spikes through lower reverse higher okay can you can you see what I’m trying to share over here again here swing high market structure price comes in strips above this highs reverse lower so this is a very common phenomenon in the market and this is why I say don’t put your stop-loss right and obvious market structure this means they’re right you’d want to be putting your stop-loss just below support or just above resistance instead what you wanna do is give it some buffer okay so if you notice that you know this is the highs all right give it some buffer like you know like one-eighty are somewhere about here so you don’t get you know a speical when the market just took out the heist and then reverse law so give it some buffer right so this is the buffer that you can give it right if you want to have a more definite example all right use the ATR indicator right Average True Range find out what is the value say let’s say for example the value at this point in time right is about let’s say 60 pips so from this high you end on an additional 60 pips so that is the buffer that you can use to kind of know give yourself a more wider stop-loss so you don’t get stopped up on the spike up or spike down okay so this is important okay don’t you know set your stop loss and obvious market structure number two I’m missing that traders maker is that they’d like to chase breakouts so what do I mean by this is that they see the price right like say for example over here then it breaks out over here it start buying and designs alright because you know again textbook might say no you wanna confirm the breakup wait for it to you know close above resistance and then you go long or wait for it to close below support and then you go short and the problem with this is you know let me share with you what I mean okay over here okay just let me get rid of the ATR indicator so you can see the over here yep right we have a breakdown at this point in time right you know textbook would say you know price breaks below support close below it go short and the problem with this is that if you were to go shop right now where are you gonna put your stop-loss well logically thinking right if you wanna you know use it based on market structure you would have to reference your stop-loss right near us it’s from this high over here and you can see it that your stop loss is very why trying this is so white your stop-loss and the thing about chasing breakouts is that the market right has a good tendency is that it would mean river okay so this means right that usually after the market has make a huge move right the price would tend to retrace back towards the mean so in this case can see a it’s nice to retrace in fact this is actually the bottom before it breaks out higher so you want to be careful about chasing breakouts usually when the prices you know go up consecutively many days in a row is usually right one of the worst times to be buying breakouts so now you might be wondering okay right now so how do i trade breakouts okay I’m glad you asked because this is what I want to talk about right now okay so let me look at this this particular market that has a good example so if you look at this right when I’m whenever I treat breakouts I want to be trading breakouts with a build up so what is a bit low so unlike the earlier example where you are trading breakouts a build-up refers to a track consolidation prior to the breakout like this a tight consolidation prior to the breakout you might be thinking Raina why why do you want it to have a tight consolidation two things number one you can actually reference this tight consolidation to set a proper stop-loss so now instead of setting your stop-loss below this swing low you can reference it from this low over here this give you a tighter stop-loss right and improves your risk to reward on the trade the second reason is whenever you see a build up for me the highs right it’s telling you that there is buyers willing to buy this higher prices because if you think about this right if the price is at resistance and is holding a resistance for quite a long time what does it tell you well you know that resistance is a level that there is potential selling pressure to push price low so this is why it’s you know often you see price comes in to resistance and then reverse a lower but what if the price comes into resistance any holes there and holes there and holes there it probably means that there is someone somewhere out there who is willing to buy this higher prices so this is why your this consolidation you know hovering and resistance and it’s something like like this over here this is what I call a build up and this to me is a sign of strength so now when the price let’s say breaks above it breaks out above this build up you can actually reference this loop to set your stop loss now your stop-loss is much tighter and you have a higher probability of the tree actually working out in your favor in this case right obviously a cherry pick this example and the price you know break up higher so this is another possible setup again you have a very pull back someone looking like a poop Abu flag again if you want to buy the breakout at this highs you can reference this low and set your stop loss compared to the earlier example where you know you saw the Palladium 1 this is disgusting right imagine you’re going shot over here setting your stop-loss right 1 in TR above this size can you see the difference in just the size of the stop-loss that you’re dealing with it’s a lot of difference and that would have a huge implication right on your potential risk to reward on the tree because right if you think about this right if your stop-loss like this are it’s a lot larger for you to n1r on the tree you need this the market to move this distance right to earn the amount of risk that you’ve reached let’s say for example your ISA $500 on the tree this means that the market not have to move this much distance for you to make $500 on the tree whereas let’s say you know in trading breakup tree for build up let’s say your stop-loss is only in this distance every time the market moved from here to here you make $500 so in the distance required is much lesser okay so this is why with a title stop-loss you improve your risk to reward on the tree the market don’t have to move a lot right for you to make 1 R 2 R or three R so this is the second thing I want to share with you right don’t chase breakouts right always wait for a build up to form before you know trading breakouts and finally the third thing is that a lot of traders they micromanage their trade so what does it what do I mean by micromanage your crates so let me explain so ok just get this so you can see over here okay this is not the one I was looking for the other one okay so you can see what your let’s see right this is another case of you know price breaking out of a bill up right breaking them up this highs over here so hey you know maybe you might you might go along maybe you went along on the break of this of this heist okay and that is all well and good and what happens is that you start to micromanage your trade you start to you know go down to a lower timeframe and see what the price section is doing so let’s say for example this is a daily timeframe trade and then you go down to the one-hour time frame okay and you see something like this okay so this is the breakout level okay the breakout level and then you notice that on the lower timeframe the market starts to show signs of crap okay notice that over here you have a series of lower highs and lower lows and the market finally you know did break below this prior swing low and you tell us self o main price action says that you know this market is going lower right it’s a lower high lower low market is at a downtrend let me exit my tree okay this is this is something that you know you probably know would think right maybe not this timeframe but this is the top process that you might be having and the problem with such an approach is that you are micromanaging your trades because if you enter on the daily timeframe you are supposed to be managing your trades on a daily time frame not on the lower timeframe why is that because the lower timeframe is noise to your trading okay so as you can see over here let’s say on this lower timeframe this one hour timeframe it might seem that the trend is reversing towards the downside but when you look at a daily timeframe what you’ll see is that this is actually just a pull back on the daily timeframe right and because you micromanage your treats on a lower timeframe you basically miss the entire move higher okay so what is the lesson over here the lesson fee is very simple if you enter off the daily timeframe you want to manage your trades on the daily timeframe minimum right you can go up one timeframe higher that is fine if you know if you’re an advanced trainer you know what you’re doing by the BAM is that if you enter on a daily timeframe manage your treats on a daily timeframe because if you don’t if you manage your treats on a lower timeframe okay in this case write a pullback on a daily timeframe would look like a downtrend on the lower timeframe and you will scare yourself out of the trade right because you are you’re micromanaging your trade you know you’re trading the noise on the lower timeframe okay so this is important so don’t micromanage your trade that’s number three so let’s do a quick recap right to what you’ve learned today right the three big mistakes right that traders make and how you can avoid it number one don’t set your stop loss right at market structure as I’ve explained earlier right if you just put it below support right the smart money can push the price down lower triggering the stop-loss right and then you know swing it back up higher and then I you might get the direction right but you’re not in the tree because you got stopped out right so what you want to do is give your tree some buffer number two don’t chase breakouts right firstly right when you’re chasing breakouts more often and not the markets are usually about to reverse because the market doesn’t go up your one straight line usually goes up retrace us and then continues to move up higher by chasing breakouts right you are putting yourself in a very unfavorable position number one your stop-loss is very white number two all right the market is likely to do a pullback or even a reversal and you’re pretty much in Alpine near the height so that is not favorable instead if you want to trade breakouts look to trade breakouts with built up as what if you know share with you earlier looking for tight consolidations on the child and I’m tree don’t micromanage your trades right if you’re entering off the one hour time frame manage your trades on a one hour time frame if you’re trading off the four hour time frame many to treat on a four word time frame and it’s a trough okay don’t you know enter on a daily time frame and then manage your trades on a five minutes time for it doesn’t make sense at all right it’s it’s ridiculous if you ask me okay so this are the three lessons right or mistakes that I’m gonna share with you today and I hope that you know you can or we all can learn from it right and you don’t make them in future okay so with that’s it I’ve come towards the end of this video if you wanna learn more about my trading strategies my methodology her dad right go down to my website trading with Rana come over here scroll down a little bit depending what you want to learn he’s gonna learn a trend following download this guide over here the ultimate trend-following guide where you learn how to profit in boo and bear markets or if you learn about price action trading market structure right now candlestick patterns this guide over here the ultimate guide to price action trading just click this orange button and I’ll send it to your inbox for free okay so that’s it I have come to us the end of this video if you’ve enjoyed it hit that thumbs up button alright and subscribe to my youtube channel and if you beg or comment just let me know below and I’ll get back to you so that’s it I’ll talk to you soon you


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