Here is an Engulfing Candle trade that I took recently and I thought that you might find it useful to see the trade from front to back.

So in this post, I break down the thought process, order entry and exits on this trade.

I also review the trade to show you what I could have done better.

To me, the best way to learn to trade is to see the process and the pattern before and after the trade.

How many times have you gone back to see if a trader’s prediction on YouTube played out?

I would guess, not many.

That’s kind of unfortunate because there is a lot to be learned between the prediction and the final result.

Therefore, I believe that it is much more beneficial to break down the trade after it’s in the books.

Writing about my trades also helps me learn from my trades. Everything is verified and I provide the proof.

Anyway, here’s a video breakdown of the trade.

The text version is provided below the video. 

Reasons for Taking This Trade

It is usually easier for me to take trades that go with the overall trend, than to try to buck the trend.

Other traders prefer countertrend trades. I will take countertrend trades, but I’m much more selective.

So in this case, there was a very clear case for a downtrend in the GBP pairs. Let's analyze this from the top down.

Here is the weekly chart for the GBPAUD.

There is some room to the downside and price looks like it is taking a break before another leg down. 

Next, the entry signal was an Outside Bar on the daily chart. Some traders also call this an Engulfing Bar.

Yeah, as you probably noticed, this was not a legitimate Outside bar.

However, I did get alerts that Outside bars printed on other GBP pairs, so I decided to take this one too.

It printed on a really nice resistance level and the probabilities looked good to me.

This is one of the important benefits of setting up trading alerts and using Incremental Automation.

They can help you find related trades, especially when you are busy working a job or traveling.

Here are some examples of alerts that I got recently.

Trade Entry 

Now that I had a solid trade idea, it was time to enter the trade.

 used the 80/20 entry on the trade, taking 80% of the position on the first profit target, and I let 20% run for additional profits.

Here is the entry, level and stop loss. The stop loss line is red and the entry line is blue.

Trade Exits

The first exit was near the former support level. I thought it would be a good place to take some profits.

The second exit was near the “valley” of the previous low, which is usually a safer profit target.

Secondary Analysis and What I Could Have Done Better

As I mention here, it is very useful to analyze your trades after you have had some time to cool down and release any emotional energy associated with it.

One thing to look for is emotional exits and mental mistakes. The best place to start is to look at the chart after the trade is closed.

In this case, price could just be retracing for a move back down.

However, since price is near a major low, it is a good place to get out.

If there was anything that I could have done better, it was possibly sticking with the first position a little longer.

But overall, I'm satisfied with the exit and it's on to the next trade!

Conclusion

That’s about it.

Although this wasn’t my most profitable trade of the month, it was well executed and it played to one of my strengths, which is the ability to let swing trades run.

To make sure that you don't miss any Engulfing/Outside Bars, our MT4 alert indicator can be a great solution.

Happy trading!

The post Engulfing Candle Trade That Made +637 Pips appeared first on Trading Heroes.

Here is a Pin Bar trade that I just took that didn't work out quite as I wanted. But that's just how trading works, it won't always be perfect.

In this Pin Bar trade analysis, I'll break down what worked, what didn't, and why I'm not stressed.

The Setup

Here is what the Pin Bar alert on my phone via the MT4 app looked liked.

If you are following along closely at home, this is not the actual signal, but what my alert indicator looks like. I accidently erased the actual signal

The Entry

I traded the EURAUD on the H4 chart.

This Pin Bar was a little different than the type I usually trade, in that it is a trend continuation Pin Bar, instead of a trend reversal Pin Bar. But the price action was good, there was a strong move, followed by a pullback, ending (hopefully) with a Pin Bar.

The lines on the chart are as follows:

• Red: Stop Loss
• Blue: Entry
• Green: 1st Profit Target

The entry parameters are as follows:

• Risk: 0.5%
• Positions:
  • 1st: 1R target, 80% of total position
  • 2nd: no profit target, move stops as price moves in positive direction, 20% of total position

Trade Results

I put this trade on and went to sleep. There was some upcoming Australian news, but I thought that the trade would be OK.

…and here's what it looked like when I woke up:

Sweet, right?

Well, not so much.

It turns out that the spread widened and I actually got stopped out on the second position!

So price shot up, hit the first profit target, and the trade bagged 86 pips.

…then price came back, the spread widened (or maybe vice versa), and my stop got hit. Crap.

The Final Result From MyFxBook is as Follows:

It was a total gain of 0.4% on the account or $3.60 in this small trading account. 

I hope that this shows you that you can trade safely, even with a small account. It’s all about using nano lots. 

Post Pin Bar Trade Analysis

The results of this trade were not optimal, but I'm OK with it. I made money on balance, and I actually made the same amount that I made on the last Pin Bar trade I analyzed.

In the past, I would have obsessed over losing that second position. But I have learned how to embrace the suck and move on.

Next trade!

Do you have any thoughts about this trade? Could I have done something differently? Let me know in the comments below…

Disclaimer: Some links on this page are affiliate links. We do make a commission if you purchase through these links, but it does not cost you anything extra and we only promote products and services that we wholeheartedly believe in. TradingHeroes.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

The post EURAUD – Pin Bar Trade Analysis and Results appeared first on Trading Heroes.

This is a Pin Bar trade that closed out this past week. I'll break it down so you can see how I traded it and what I learned from it.

Before We Start:

• This is for educational use only, it is not trading advice.
• Just because this trade worked out, it does not mean that all trades with this strategy will work out.
• You need to backtest any technical trading method before you ever trade it with real money.
• The standard Trading Heroes risk disclaimer always applies.

Now that we have that out of the way, here's the trade. If you want to see charts, they are provided after the video.

The Setup

This was a standard Pin Bar setup. I got an alert on my iPhone that looked like this.

…and my battery was running low.

You can buy this alert indicator for MT4 here.

Having an alert indicator like this makes it much easier to stay on top of opportunities. In my opinion, it's all about Incremental Automation. Most people cannot be in front of their computer all the time, myself included.

The Entry

I traded the GBPCAD off the 4 hour chart.

I actually entered this trade a little late. The Pin Bar printed near a former support level, turned resistance. I was also a long Pin Bar, relative to the previous bars. You can see this level at the left of this chart. I still decided to enter because I felt that there was enough room to make at least 1R.

The lines on the chart are as follows:

• Red: Stop Loss
• Blue: Entry
• Green: 1st Profit Target

The entry parameters are as follows:

• Risk: 0.5%
• Positions:
  • 1st: 1R target, 80% of total position
  • 2nd: no profit target, move stops as price moves in positive direction, 20% of total position

Trade Results

Once the trade was about 45 pips up, I moved the stop loss to +5 pips on both positions to make it a free trade. Price action looked choppy and with another bullish Pin Bar printing, I felt it was time to make sure I didn't lose anything.

The bullish Pin Bar didn't actually trigger the take profit because of the spread.

Price hit my first profit target and I bagged 132.5 pips, which was automatically tweeted out.

Then price snapped back and hit the +5 pip stop loss on my second position. The actual gain was +4.7 pips.

Here is how price played out on the chart. Hit the “play” button to scroll the chart forward.

You can see more of my charts on TradingView.

The Final Result From MyFxBook is as Follows:

It was a total gain of 0.4% on the account or $3.59 in this small trading account. 

I hope that this shows you that you can trade safely, even with a small account. It's all about using nano lots. 

Post Trade Analysis

This was a good trade. I entered a lot later than I wanted to, but sometimes it cannot be helped. In this case, I was running an errand and could not sit down to analyze the alert signal properly.

Moving the stop to +5 pips was a good move because I was surfing in Hawaii when the trade closed. If didn't do that, I might have taken a loss on the second position, if price spiked higher.

Here's a short clip from Hawaii…

Learn Pin Bar Trading

Traders trade pin bars differently. It is up to you to backtest and find out what works the best for you.

If you want to learn some specific strategies that professional traders use, I recommend checking out:

• Walter Peters – Naked Forex Book
• Chris Capre – Advanced Price Action Course

Do you have any questions about this trade? Let me know in the comments below…

Disclaimer: Some links on this page are affiliate links. We do make a commission if you purchase through these links, but it does not cost you anything extra and we only promote products and services that we wholeheartedly believe in. TradingHeroes.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.

The post GBPCAD Pin Bar Trade Results appeared first on Trading Heroes.

Back on May 22nd, I lost precisely 1,095 pips on one trade.  When I first started trading, that was a ridiculous number of pips to lose on a single trade.  The courses that I went through at the time recommended that you keep your stop as tight as possible, usually 20-30 pips at most.

But as you will see in this post, not all pips are created equal.  If you are still concentrating on pips, you are barking up the wrong tree.  Here is what I mean…

The Trade

The trade in question is the AUDJPY trade that I blogged about back on April 25th.  In this trade, I used the long only Pin Bar setup on the daily chart to enter the trade long.

At one point, all of the positions were profitable, but I was looking for price to retest the highs, as the strategy I tested suggested.  I followed the rules of the system and I could have exited earlier, but overall it was a good trade.  I followed the system and it didn't work out…that's trading.  If we never lost, we wouldn't call it trading, we would call it…duh, winning.

The Results

So here is how the trade looked in my Twitter stream.  Every time I close a trade, MyFxBook automatically sends out a tweet with my results. If you want to learn how to do this with your trades, check out this post.  It's really easy to do and it is totally free.

Looks downright catastrophic, right?  How can I afford to lose that many pips?

However, in reality, this is really how it looked on my trading report.  The green bars represent the number of pips gained or lost.  As you can see, ever since I started trading #thebossfx, that is the most number of pips that I have lost on a trade.

On a percentage basis however (the red graph line), it was just a minor blip.  That one trade only brought the account down by 0.63% or much less than 1%.  I've obviously lost more of the total account in the past, as you can see in about July 2012.

Trades Should Be Reported Differently (my opinion)

That brings me to the point that MyFxBook should give us the option of using % or $, gained or lost, in the tweets because as we can see here, using pips alone is pretty useless.  I could be making 5 pips a day and be killing it or as in this example, I could lose 1,000+ pips and be just fine.

Also, when trade results are reported this way, the pips can be greatly overstated.  For example, let's say that I open a 10,000 currency unit lot size trade in the EURUSD and close out 1,000 units at a time for an average of 10 pips each.  What I really did was close 10,000 units at +10 pips.  But the tweets will show 10 trades closed for a total gain of +100 pips because it will add up the +10 pip gains from each of the 10 exits.

In their defense however, reporting results on a percentage basis is tricky.  In order to report it this way, they would have to take into account deposits/withdrawals, open trades, etc.  Not the easiest thing to do and I don't know if there is really a good solution that would work.  But still, it would be nice to have and I strongly believe that the autotweeting is a great way to show people how your trading is really going. 

Conclusion

So remember, not all pips are created equal.  Keeping your risk small can keep you out of trouble, regardless of how many pips you lose.  If you don't have an account that is big enough to trade micro lots (1,000 currency units each), then consider trading with a broker like Oanda that allows you to trade nano lots (1 currency unit).

I know that I sound like a commercial for them, but I do not make any money by saying that (I wish I did).  To have that option with a top tier broker like Oanda is amazing and you should take advantage of it.

This will allow you to keep your risk small, even with a tiny account.  If you are risking more than 2% on each trade, you should seriously look and tuning down your risk because you are probably more of a cowboy than John Wayne ever though he was.

How much do you risk on each trade?  Let us know in the comments below…

The post A Recap Of My Huge 1,095 Pip Loss And Why It Ain’t No Thang appeared first on Trading Heroes.

I heard about this guy.

His name is Kurt Hanks.

He makes pips on a regular basis.

Massive, crazy phat pips.

Here is a brief bio quote from the Rob Booker website:

A note about Kurt Hanks: He averaged 2,000 pips per week in 2009 and made 11,000+ in one week last year (these are not double pips because he doubled his trade size or something: he actually made 11,000 pips from individual trades, in one week, using the systems that I teach at the seminar). Since the Orange County Seminar in March of this year, he has made over 150,000 pips trading these methods. This includes time he took off for surgery and other things. He will open up his live account and we'll go through his trades step by step. He's the best pure trader that I have ever known. Of course Kurt has his bad trades (we all do, right), but you've gotta hear what he has to say. He now works one or two days a week and makes a living from trading.

Averaging 2,000 pips a week?

Are you joking?

When is the last time you made 2,000 pips in a week? I know I never have.

So how does he do it?

He uses the Rob Booker Counter Trend Trade also known as the Waterfall Trade. I looked at the Word doc outlining the trade and I thought to myself, this is nuts!

One trade can have anywhere from 15-30 lots.  How can anyone expect to trade for a living with this kind of a messed up trading technique?

But I don't dismiss anything until I have tried it, so of course I fired up my trusty forex back testing software, Forex Tester 2.

Right now, I mostly trade the GBPJPY so I started testing the system as-is to see what kind of results I would get. I will post the actual results later, but to my surprise, the trade tested very, very well on this pair.

It also just so happened that as soon as I was finished testing this pair, the trade actually set up in live trading. I didn't take the trade in my live Oanda account, but I have another live account at Alpari-US that I use for higher risk trades that I want to trade with real money.

So this is how the trade set up:

The setup is triggered when the central pivot for the day is not touched and either the S3 or R3 pivot is hit on the same day. Also, for the GBPJPY and the GBPCHF, there should be at least 300 pips between the central pivot and S3/R3 to be sure that there is enough room to profit.

In this screenshot, the central pivot is in dark yellow and the outer pivots are in blue.

As you can see, the central pivot was missed on August 3rd and it hit R3 on the same trading day. The light yellow line then becomes my target as I expect price to come back to the missed pivot, per the trade setup rules, taking into account the spread and a little buffer.

The trade calls for entering 1 lot position when S3/R3 is hit so I went short one mini lot (0.01) at 6126. I got a little better position because price shot through R3.

Then I stacked my other short position orders per the trade outline:

• 1 mini lot @ 5952 (+146 pips)
• 1 @ 5900 (+94 pips)
• 2 @ 5875 (+69 pips x 2 lots = +138 pips)
• 2 @ 5850 (+44 pips x 2 lots = +88 pips)
• 2 @ 5840 (+34 pips x 2 lots = +68 pips)
• 4 @ 5830 (+24 pips x 4 = +96 pips)
• 4 @ 5820 (+14 pips x 4 = +56 pips)
• Final target (limit orders entered on all positions to take profit): 5806

My target was hit on August 11. All the stop orders were hit and taken out at the take profit level of 5806.

With the +320 pip profit on the first position, the final count was +1,006 pips. My beginning account balance was $316 and my final profit was $104.80, a whopping 33.2% gain on one trade.

I'm going to withdraw the profit and add it to my Oanda account.

Again, this was done in a live account with real money.

Why does this trade work? Because there is a statistical bias for price going back to the missed pivot and you stay out of the big position sizes until price gets very close to the target.

As you can see, this is very risky and very aggressive and you HAVE TO test this and be comfortable with the risks before you trade it with real money. Past performance is not a guarantee of future results, etc.

Also the stop loss on this trade is a margin call, so you have to use a sub account that has only a small fraction of your total trading capital.

That being said, people are making a living trading this technique so I want to learn how to do it well.

That means more backtesting and live trading.

The post How I Made +1,006 Pips (or 33%) On ONE Trade appeared first on Trading Heroes.