Using The Stop For The Enter.

[tradingteacher]

A thing to understand about forex, is that you should really treat it as a game off odds.

For example, if you are placing all trades on a 1:1.5 risk/reward ratio, you should really be winning overall.

Even if you only win half the trades, you are profitable.

If you are following any kind of system worth a damn then you should be able to win at least 50% of you're trades.

The best way to ensure you are keeping the odds in you're favor is by placing you're enter based on you're stop.

When I want to get into a trade it's always based on a support/resistence breaking and I want to target the next one.

I expect price to retrace to retest the break.

So I pick my stop, if market goes further than there, it's a fake break.

I then pick my TP (the nexr s/r) and I pick my R/R ratio.

If price does not come back to a place where it gives me the right odds on r/r with my pre-defined SL - I miss the trade.

This stacks the odds in you're favor and as long as you have a good strat and you are following the rules correctly, you're onto a winner.

No trade matters, no day matters, not even a week or month matters - you have the odds in you're favor and you will come out the winner purely on mathematics.

 

[Rhody Trader]

If you are following any kind of system worth a damn then you should be able to win at least 50% of you're trades.

I can think of a few successful traders who will tell you they don't win anywhere near 50% of the time and are doing just fine with their system.

 

[tradingteacher]

I can think of a few successful traders who will tell you they don't win anywhere near 50% of the time and are doing just fine with their system.

OK, well let me re-phrase that to "when I can't win over 50% of my trades I will feel it's time to re-assess my system

 

[brewski1984]

I see a lot of people base their trades on a break out of support/resistance when I always thought the psychology of support/resistance was that it would be a place that holds more often than not.

Is there any reason to that?

 

[tradingteacher]

I trade the b/o as I find it to be the be the best way to get my target amount of pips and keep my risk relitively low.

S/Rs do hold, and a lot of people like to trade the s/r bounce.

I find it is less predictable where a s/r bounce will go that a breakout.

Usually doing this we can hit at least 1 TP on each pair a day with a target of around 20-30 pips.

I trade 7/8 pairs (and often I can hit these first Tps within 2 hours of the London open) so that's yielding over 500 pips a week on very little time trading.

 

[tradingteacher]

I see a lot of people base their trades on a break out of support/resistance when I always thought the psychology of support/resistance was that it would be a place that holds more often than not.

Is there any reason to that?

If the S/Rs held up most of the time (I mean the S/Rs taken from the 1h chart in this case) then FX would trade in the tightest of tight ranges.

Pairs are generally trading in over 1000 pips range (on the bigger charts) so S/Rs must be busting