I’m a firm believer that 90% of your trades depend on your previous analysis and only 10% on your actual entry.
You can have the best entry system in the world, but if you take your trade in the wrong direction, or trade the wrong instrument, then you are doomed!
In fact, I think it doesn’t really matter what entry system you use, as long as you are trading the right instruments.
So here is how I got those 687 pips…
breakout, false breakouts, GBPNZD
Hey trader, hope everything is going great!
What do you think about the markets this week, after the NFP and the ECB interest rate announcement last week?
I want you to tell me something, is it just me or you also think the NFP report should not be considered as an important announcement anymore?
I just don’t see the market reacting to the NFP report as it used to…
Now, this week comes what I believe is the NEW MOST IMPORTANT FUNDAMENTAL ANNOUNCEMENT: FOMC Meeting Minutes.
This ons has proved in the last year to be the fundamental release that most impacts the market.
Do you agree with me?
Ok, now on to breakouts!
false breakouts, forex, valid breakouts
We all have traded a false breakouts, haven’t we? OK, not all, but most of us have.
If you are one of the few traders who still haven’t, you should do it at least once hehehe… just to get more experience (I’m kidding, even if you wanted, you never know what kind of surprises the market has for you).
Anyway, this is how it feels to trade a false Breakout
You draw an important resistance level (at least you think it is important)… you feel confident about this level and decide to set a buy stop order just above the resistance level.
What are your thoughts at this moment?
You cant wait to see the market triggering your order, because you know once it reaches the level, the market will explode, and you’ll get at least 50 pips in a few minutes, piece of cake (you close your eyes and picture this scenario).
You stay away from the chart for a few minutes, and once you see the market trading below your buy stop order, you switch over to a lower timeframe (as if it would give you control over what the market is doing). There you are, starting at the 1 min chart without blinking… and of course, a big smile on your face…
Everything looks good…
You are still positive about this trade, you review everything, you confirm every aspect of the plan and you arrive to the same conclusion: This is the trade of the week.
false breakouts, support and resistance, valid breakouts