Tag Archive for: professional traders

Avoid Pin Bars as They Give You Bad Entries

This is part 3 of a 4 part series. Listen to the last one here: Don’t Fight or Trade Like This, or if you missed the previous one, checkout The Blind Entry (How It Will Leave You Trading Blind)

I’ve shown over the last few content pieces how the idea of confirmation in price action is an illusion. This video demonstrates that when retail traders are getting in the market, professional traders are already in profit.

Here’s the transcript for the video:

“Hello, traders here.

Chris Capre, 2ndskiestrading.com.

So I’ve recently shown over the last few content pieces how the idea of confirmation in price action is an illusion and it’s not what professional traders are looking to enter the market.

I’ve also shown how entering on a 50% retrace tweak entry on a pin bar is a sub-optimal or retail entry.

I think it can be easily said that when retail traders are getting in the market, professional traders are already in profit.

This video further demonstrates this about the pin bar entries, such as the 50% retrace entry, or the sell on break being also a retail or sub-optimal entry.

Now, I’m going to use an example here from a live trade I’m in right now and this is one that I’ve discussed in my members trade setups commentary in the price action course.

So, I sold right at this resistance level.

I felt like we’re still in a range type structure and that if the market protruded up to this resistance right over here, that sellers or offers would enter the market and push the pair back down.

And that is exactly what happened. So I got in at 1.4975 and literally it was about 6 pips off the intraday high.

And so I put a stop just above these little wicks right over here, particularly this one here, which left me with a 30 pip stop.

Now, I’d like to compare this entry versus the 50% retrace entry or sell on break so that you can see the differences.

Now, going to another chart here, first off using the 50% pullback entry here, you would’ve missed this trade completely.

So according to the faux authorities on price action, particularly Nial Fuller, the next entry would be the sell on a break of the lows here.

In fact, pretty much every other person who teaches the cut and paste or carbon copy version of price action that you see out there, especially around the pin bar, would all say you either sell on a retrace or you sell on a break of the lows.

Now, this gives you a much worse entry, and about as late or a retail entry as you could possibly get. So that puts you in at about 1.4943, roughly.

Now, assuming in most cases we’re going to have the same stop, just above this here, most of the time we’re gonna have the same stop on the same type of entry.

You are going to need a 70 pip stop compared to my 30 pip stop which is at 1.5003. So you need 70 pips, I have 30.

Now, just from a risk to reward perspective, when you are hitting +70 pips or +1R which would put you at 1.4863, that’s right about… that’s actually below the intraday lows.

So this right here is your intraday, that would be your +70 pips or your +1R.

When you are hitting your first +1R, my entry at 1.4975 is up already 112 pips, is at +4R. So now the moment you’re getting your first R, I’m already up 4 times that.

In fact, by the time your entry in the market right here at 1.4933 which is a pretty razor sharp entry if you’re selling on break, I’m already up +40 pips from my 1.4975 entry. Or in this case, +1.33R.

Again, coming back to the perspective that it is

“more often a professional is already in profit when a retail trader is entering the market”

you can see the differences quite clear here between the two entries.

But let’s play a little fantasy here. Let’s say that the market pulled back magically to your 50% level perfectly.

Let’s say you got the absolute highest uptick on the pullback. The best possible entry in the trade. It just happened to go there. That would be 1.4958.

Now, again, assuming most of the time we will have the same stop loss placement, your stop loss is 47 pips if you put it at 1.5003 whereas mine is still 30.

So when you are hitting your first +1R at 1.4910 which is right about here, there, so when you’re hitting your first +1R, at 1.4910, I’m already up 65 pips or +2.16R.

So, with that being said, it should be very clear, especially with all the other content I’ve posted before this, it should be very very clear the differences between a professional trader’s entry and a retail entry, especially being offered by the faux authorities on price action.

If you want to continue to have sub-optimal retail entries, then you can use the 50% retrace entry.

But if you want an entry location that gives you better accuracy and a higher +R per trade, many times double the +R available, then you’ll want to adjust your entry method.

And this is what I teach in my price action course, particularly how to get plus high R trades like this.

Now, if you found this video lesson useful, please make sure to like, share and tweet it below, and I’d love to hear from you what “a-ha” moments you have from this video.

So please come over to see this video on my website as well at 2ndskiestrading.com where all the discussion is happening and leave your comments there.

But thank you for watching this video, again my name is Chris Capre at 2ndskiestrading.com, where I teach you how to increase the way you trade, think and perform.”

Now that you’ve seen the video and had a chance to analyze the two methods and how they perform differently, which one wins?

What do you think? Please share and comment below.

This is part 3 of a 4 part series. Listen to the next one here: Don’t Fight or Trade Like This, or if you missed the last one, checkout The Blind Entry (How It Will Leave You Trading Blind)

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Two Live Trades – How Beginners & Professionals Manage Their Trades

All traders want their trades to immediately go either into profit towards their target in a b-line, or towards their stop loss. The time is what kills most beginning/intermediate traders who are struggling to be profitable because it creates all this indecision.

In today’s video, I’m going to share with you how beginning and professional traders manage their trades as I share with you two live trades I’m in right now that have turned out completely differently than the other.

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⏰TIMESTAMPS⏰
1:10 – what every beginning trader wants their trades to look like
2:50 – negativity bias and how this affects your trading
3:46 – getting out of trades too early
4:45 – how professional traders manage their trades
6:00 – why you need to work on your trading mindset
7:18 – what you’ll have to do to manage your trades

Read more

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The Price Action Confirmation Myth & the Retail Mindset

This is part 1 of a 4 part forex price action strategy series. Read the next one here: The Blind Entry (How It Will Leave You Trading Blind)

I can always tell where people are in the trading process based on how they speak about confirmation. Why is that? Watch, and find out!

Here’s the transcription for the video:

“There’s a really big misunderstanding about confirmation.

When I hear people talk about confirmation and how they talk about confirmation, I can always tell where people are in the trading process based on how they speak about confirmation. Why is that?

Because there’s been this proliferated idea in the trading education world that to trade a setup or trend or something like that you need this thing called confirmation and the confirmation comes in the form of a pin bar, an engulfing bar, an inside bar or whatever.

So that’s the general idea that’s out there when it comes to trading price action.

The thing is, is that when I hear somebody talk about price action in this way, I know exactly what level of trader they are and what level of trader they’re not, because how somebody speaks about confirmation is very indicative of where they are in their trading process.

If a trader is looking for confirmation that a trade will work and they’re doing this because they’re saying “ok, we gotta wait for a price action confirmation signal from support or resistance“.

Well, where does this idea and need for confirmation come from? It comes from a beginner’s understanding of trading.

Why is that?

Because beginning traders are looking for certainty in the market. They’re looking for solidarity, they’re looking for something really really potent that says “I need confirmation”.

The reason why they need confirmation is because they don’t trust price action, they don’t trust their skillset.

They don’t trust trading as a whole. They don’t trust trading with trends, they don’t trust reversals. They don’t trust support and resistance, they don’t trust price action as a whole.

In the beginning, traders want solidarity, they want certainty. And because of that, they’re looking for confirmation in the form of a pin bar or something like that.

The pin bar ‘confirms’ that this trend is going to continue.

The thing about it i,s is that this is something that professional traders have let go of that a long time ago. And they have to let go of it to become a professional trader.

The reason why that is, is because that idea of certainty, of confirmation and the way that a beginning trader is looking for it, that wanting things to be really certain, that A++ setup.

Where that comes from is a beginning understanding of trading.

“Professional traders don’t look for certainty, because they’ve realized it’s an illusion.”

What professional traders are looking at, which is a different perspective, is trading and thinking probability.

So if you hear somebody talking about confirmation, “we wanna trade with the downtrend and we’re gonna wait for a pullback towards resistance and a pin bar off that resistance as confirmation that the trend is still in play and we can trade it“.

How many have heard that story before?

The reason why you’ve been told that is because the people who are teaching that aren’t trading professionally.

If they were you would know this, and all professional traders would know this because professionals aren’t looking for confirmation signals via a pin bar.

So if you hear somebody talking about that, you know where they are in terms of their level of trading.

They’re still a beginning trader themselves, and if you think about it, if somebody is talking about an A++ setup or they’re saying “hey, we’re waiting for a pin bar from resistance for confirmation“, besides the fact that I would suggest running from them as far as possible, because they’re still beginning traders.

You have to ask yourself “look, if you’re only willing to wait for a pin bar or an inside bar, or a false break, if you’re only willing to wait for those signals before you enter the market, well then you really don’t trust price action, do you?”

You don’t trust trends, you don’t trust price action context, impulsive vs. corrective, volatile vs. non-volatile trends, you don’t trust support and resistance, you don’t trust your own ability to trade.

You have to wait for all these other things to be in place and then this one final supposedly magical pattern and supposedly there’s only like 3 of them, which is amazing to me that this idea is actually out there, that there’s only 3 possible ways that the market is telling you a trend’s going to continue.

I don’t know about you but that seems kind of absurd to me. It seems a little insane to think that a market that is so complex, across so many players, across trends that continue.

Confirmation via a pinbar is an illusion, it’s a beginning way to look at trading.

So, your job as a professional trader… you know you’ve kinda crossed the Rubicon and made a big leap in your trading when you look at trading in terms of probabilities, not confirmation in the ordinary sense.

Confirmation, the way it’s normally talked about is a very dubious notion. It’s a very slippery idea that doesn’t really exist in the way you think it does.

If you’re constantly looking for those things you’re going to miss thousands and thousands of pips in a trend that is already well-esablished.

If you’re looking for confirmation, you won’t be able to make this trade and this trade and this trade and this trade. And that’s… what is that? +240-250 pips?

In a period of, what, 3 days? On one pair? You won’t be able to do that.”

This is part 1 of a 4 part series. Read the next one here: The Blind Entry (How It Will Leave You Trading Blind)

Have you been trading price action via ‘confirmation’? If so, I want to hear from you and what you see as the difference, so please make sure to comment below.

Was this article helpful? Please make sure to like, share and tweet it below to anyone you think can benefit from this.

A Message to Traders for 2015 (By Chris Capre)

chris capre trading office new years eve
Hello Traders,
I wanted to share some holiday/new years wishes for our members, to struggling traders, and the club of those wanting to become successful. These are my sentiments, hopes and wishes for you in 2015:
People are often unreasonable, unkind, irrational & self-centered: Forgive them anyway.
If you are kind, people may accuse you of selfish, ulterior motives: Be kind anyway.
If you are successful, you will win some unfaithful friends and some genuine enemies: Succeed anyway.
If you are honest and sincere people may deceive you: Be honest and sincere anyway.
What you spend years creating, others could destroy it overnight: Create anyway.
If you find serenity and happiness, some may be jealous: Be happy anyway.
The good you do today, will often be forgotten: Do good anyway.
Give the best you have, and it will never be enough: Give your best anyway.
-credited to Mother Teresa
May good health, abundance and clarity be with you in 2015.
Kind Regards,
Chris Capre

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Trading Forex in the Summer – A How To Guide

By now we have fully entered the summer trading months which are traditionally slower to begin with. When you combine the summer + the lack of ‘flow information‘ shared by bank traders under investigation, you have an environment of lesser volatility, smaller moves, and more false break setups.

With that being said, how can we maximize our time, while still remaining active and consistently profiting? Below is a mini how-to-guide for summer forex currency trading.

In this article, I will share 2 simple tips to help you trade pairs with stable volatility, larger moves, and also remain active during the slower summer months.

Summer Forex Currency Trading Tip #1: Switching Pairs & Instruments
Below is the weekly chart for the EURUSD, the most heavily traded pair on the planet. Do you see that red line under the price action part of the chart? That is the weekly ATR which measures the average trading range (in pips) per week.

eurusd atr weekly chart

The average range of the pair on a week to week basis has been declining for years with it currently being at an all time low. It is the same for most majors, including the USDJPY and GBPUSD. If you are expecting a few hundred pip move on any of the above pairs, you could be sitting on your hand for days which is not the best use of your time. So what can you do about this?

My suggestion is to switch pairs that are more volatile. For example, instead of trading the GBPUSD or the AUDUSD, why not switch to the GBPAUD? It is far more volatile due to the ‘weighting‘ of the pair. If you can learn to spot good moves on the AUDUSD, then it will usually correspond to a directionally opposite move in the GBPAUD.

Take a look at the two charts below to get a better idea of this concept. In the first chart, we are looking at the AUDUSD 1hr intra-day chart. You’ll see the pair selling off heavy in the middle of the chart after a breakout pullback setup around 9330.

audusd 1hr chart breakout pullback setup

The trade happened in the Tokyo session, and took about 1.5 days to drop 135 pips. Now take a look at the chart below of the GBPAUD at that same time and notice the pattern.

gbpaud breakout pullback setup 2ndskiesforex

As you can see. the GBPAUD also make a breakout pullback setup off the role reversal level, yet it runs for +300 pips (a larger move by 2.2x). The size of each stop would have been relatively similar, which would have led to more profit on the second trade, and money in your account. Even an every day 40-50 pip directional move in the AUDUSD can lead to a +120 pip move in the GBPAUD.

Thus start looking at pairs which are naturally more volatile, and will be less affected by the lack of ‘flow information‘ shared by bank traders who are currently less active.

An additional suggestion would be to add other instruments, such as global indices and commodities. The Asian indices such as the Nikkei 225 and Hang Seng tend to have consistent volatility.

Along those lines, recently spent time with an HFT trader at IMC (Chicago). He mentioned how IMC is quite active in trading the Asian indices because of the higher volatility. Gold and WTI Crude Oil will also offer some greater volatility. Same with the German Dax and FTSE 100, so consider expanding your instruments giving you multiple options to trade.

Summer Forex Currency Trading Tip #2: Spend More Time Training
Since you are naturally less active during the summer months, why not use that time to build your trading skill set? Forget the idea of walking away when there is no trades to play golf, watch a movie, or read a book.

You want to be a professional trader who has the freedom of working from home, not having a boss who tells you what to do, what to wear and how much you get paid.

Do you get better at golf by sitting on the beach? Do you get better at playing guitar by reading novels? Do you get better at martial arts by playing video games? No, so why in the world do you think this applies to trading? It doesn’t, hence take advantage of the time available.

For those not familiar with it, Forex Tester 2 is a fantastic live simulation platform. You can take virtually any pair, and load up 13+ years of data on any time frame, then live forward trade it as if the price action was forming in real time.

I did a great video on forex training with Forex Tester 2 which shares several ideas how to accelerate your learning curve. This is especially relevant for those trading daily and 4hr strategies.

Ask yourself how long would it take you to log 500 trades if you only trade the higher time frames? Years perhaps? In less than a week, you can log the same amount of trades in FT2.

Think of it being the equivalent training of the golfer at the driving range, hitting ball after ball. Professional golfers on average will hit 500 balls a day. Do you think that helps their golf game and perfect their swing? Ponder that a moment for those of you only trading 3-5x a month, and how long it will take you to build your skill set.

I’ve had several students log thousands of trades after a few months using FT2. Go figure their trading is improving the most, and showing the greatest profits over the last few months.

NOTE: In the link I shared above to the video on FT2, there is a link where you can get a $50 discount on it.

Along the lines of using FT2 to improve your trading performance, I recently did a private member webinar, where we showed a myfxbook account from one of our students. He is trading over 70% accuracy, and up about +96% on his live trading account, with his average wins well out-sizing their average losses. He profit factor is currently +3.08 and is up +1780 pips for the last 4 months.

Below is a screenshot from their myfxbook page we discussed in the webinar.

2ndskiesforex student profit live myfxbook account using price action

They trained over and over again in FT2 and are a member of my price action course.

While others are being lazy traders, they are building their skill set. If anyone is going to really trade for a living, it will be the ones who put in the hours and properly train.

In Summary
These are just a few tips you can use to help stay consistently profitable trading forex in the summer, while using the time effectively to build your trading skill set.

There are many more tips which I share with my course members, along with more ways to utilize Forex Tester 2, building a successful trading mindset, how to train properly, along with adjusting to the ever evolving markets in real time.