🌟 Forex Trading Tutorial: Trading a Fake Breakout✅🔍 Understanding Fake Breakouts:
🔸Spotting the Fake Breakout: In the chart, as highlighted, a green candle indicates a reversal above a certain level, signifying a fake breakout. This is where the market seems to break a support or resistance level but quickly reverses direction, invalidating the breakout.
🔸Qualities of the Confirming Candle: The candle that signals a fake breakout shouldn't be a weak one. It must clearly demonstrate that the breakout was fake, usually with a strong close in the opposite direction of the initial breakout.
📊 Trading Strategy for a Fake Breakout:
1. Position Entry: You can open a position based on these candles, capitalizing on the market's misdirection.
2. Stop Loss: Set the stop loss just below the low of the confirming candle. This placement limits your potential loss if the market moves against your position.
3. Target and Risk-Reward Ratio: Aim for a risk-reward ratio of 2:1 to 3:1. This means for every unit of risk taken, you expect to gain two to three units in reward. For instance, if your stop loss represents a potential loss of 50 pips, set your target at 100 to 150 pips.
💡 Why It Works: This strategy works because fake breakouts often trap traders in the wrong direction. When the market swiftly reverses, it can lead to a strong move in the opposite direction as traders rush to adjust their positions.
📚 Educational Note: It’s crucial to practice this strategy in a demo account or with a small position size initially. Forex trading carries risks, and understanding market dynamics is key to successful trading.
🔑 Remember: Forex trading requires careful analysis, patience, and risk management. Always do your homework and trade responsibly! 🌍📚
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Nzdusdanalysis
Confirming Trends with the Lower Time Frames NZD/USD ExampleHey Guys!
As you guys know, for the past 2 weeks I've been taking multiple trades on the Nzd/usd, both short and long.
First I was taking short trades with the daily short bias, then long trades along with the bias change into long on the daily chart.
In this video, I explain how I knew the daily bias has changed into long thus aborted my initial short entry and began entering long trades.
These lower confirmation tactics play a huge role in my trading, and even if you don't trade with price action, it can be a great addition to your current strategy.
I hope it helps!
Have a great day guys!
Ken
Price Action Lesson: The Basics of How to Read Price Part 3Hey Guys!
As you guys know I aborted 2 short entries on the NZD/USD pair yesterday to minimize my losses.
In this lesson, I'll explain how I knew to abort the short entries early by reading 1 minute price action and thus minimize the loss.
Enjoy!
Have a great day!
Ken