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Simple Forex Trading Strategy: How to Catch 100 Pips a Day

what's up traders welcome back to

another youtube video today i'm going to

be teaching you a very simple strategy

that i see happen again and again in the

currency market i'm going to talk about

exactly how you can find these sort of

setups why they work so effectively and

why this is one of my favorite things to

look at in markets so stay tuned let's

jump into the video right now

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hey traders welcome back to the YouTube

channel if you don't already know me my

name is Nick I share all sorts of forex

topic content here on YouTube so if

you're not already make sure to

subscribe to the channel down below and

also give this video a thumbs up if you

like this sort of kind of in-depth

content so with that said let's talk

about this concept so today I'm going to

be sharing a strategy now this strategy

is Primeau sleeve okis on price action

ok and what I'm going to be talking

about in this strategy is a price action

entry exit and kind of full trade start

to finish concept for traders who are

both kind of newer to trading or

struggling to find consistency I'm going

to talk to you guys about one of my

favorite setups that I like to look for

in the market and why this setup is

actually so so powerful now what we need

to do in order to start out this concept

is we need to understand something about

the forex market when we're looking at

the forex market we're talking about

currencies right we're talking about

things like the US dollar right and in

this case the yen right so dollar JPY

now what I'm gonna be showing you is

something that can be used on any

timeframe for example right now I've got

the 4-hour chart pulled up but really

this is something that can be spotted on

any timeframe because it happens all the

time and that's what we're gonna get

into so what we're looking for with this

concept is basically we're gonna be

using it again price action to find a

particular setup that happens all the

time so when we talk about currencies

though we have something like the US

dollar and the JPY or the Japanese yen

what we find is that in markets what do

we know about them do we know that they

trend all the time that's not the case

right the market does not go like this

right at least not usually and not for

unlimited amounts of time what the

market actually does a lot of times is

it is back and forth or it is trending

one direction most of the time no

actually about 65 70 percent of the time

we are mostly back and forth so when we

have a market that is mostly back and

forth here in the currency market where

we have when things get stretched the

upside usually they start to come back

when things go to the downside they

start to come back

and that's not always but it's a lot of

the time most of the time the market is

not super trending and that's why trend

trading can be a difficult task well in

today's video again I'm gonna be talking

about a particular strategy that I like

to look for that involves trading most

mostly ranges or trading mostly the

reversal of trends that are starting and

what we're going to be looking for is

not just necessarily shorting a trend

right we don't necessarily just want to

be shorting this market on the way up

that's not necessarily what this

strategy is going to be about and we're

not going to be just buying just because

the market is going down what we're

going to be doing with this concept is

we are going to be looking for signs of

a potential reversal and trading based

off of those signs to give ourselves a

higher probability of catching the

reversal of a market whether it is long

or short another really cool thing about

this strategy that I'm going to talk

about is it doesn't matter where the

market is going it could be going up it

could be going down we are going to be

looking for signs that it's potentially

going to change directions and looking

to catch part of the reversal so without

further ado let's talk about this

concept what is it exactly that I'm

talking about what are we looking at

here

well let's notice something about this

market what do you see well you see a

market that is making a series of higher

highs and higher lows what does that

mean well if you're a newer trader very

simply what that means is we have

markets that are pushing higher and

higher and not only are they pushing

higher on the top side right where

you're making higher highs right you see

how these highs are higher than the

previous high for a pretty obvious

concept when we have higher highs like

this that is one thing and we also have

higher lows meaning that the price is

pulling back but buyers are stepping in

and pushing that price bullish so what

is that telling us that's telling us

that there's a lot of demand in this

market right so clearly buyers are in

control of where the price is headed

right now which is up so what we're

going to be trying to do is we don't

necessarily with this particular

strategy we don't want to be shorting

this market

not we

the market is still strong what we are

going to look for is a key word here we

are going to look for weakness and how

are we going to spot weakness well let's

go back to our definition will keep

things very simple here our definition

of strength was higher highs and higher

lows higher highs HH and higher lows so

if that's our definition of strength to

an uptrend then what's our definition of

weakness well we can kind of reverse

engineer this and let's say we flip the

script what if we had lower highs and

lower lows would this not by our very

own definition here be this start or

potential start of a different direction

trend well this guy's is the kind of

concept of a head and shoulders pattern

if you don't know what that means give

me a second here I'll continue to

explain we are going to talk about a

head and shoulders pattern and I know

this is considered a basic basic concept

but sometimes it's the simplest stuff

re-engineered and kind of brought back

to the basics that can really be some of

the most consistent stuff in for X and

in trading in general ok so we've got

that all cleared the chart looks much

cleaner now but what we have here is we

have again a market that is making a

series of higher highs higher lows when

that starts to shift we usually see

something pretty interesting happen so

again higher low higher low higher low

higher high higher highs higher highs

higher highs so what about here what do

you notice about price here this is not

necessarily a higher low in fact we've

got some pretty good evidence to suggest

that this is a lower low you can see

prices is forming lows here where we're

showing a lot of demand prices moving up

and you could probably even make an

argument that take a look we've got this

kind of trend line to the upside right

so price is making a move to the upside

price is very bullish and then we come

in and we basically break down we break

down and we show some signs of potential

reversal now we want to be careful here

we don't want to be just at least in my

opinion here on this particular strategy

we don't want to be shorting this market

just because it's made a lower low

I'm actually gonna wait for something

further and I'm gonna talk to you guys

exactly about where the entrance point

on a trade like this might be so stick

with me so we've got this level let's

identify this level here again here is

our higher highs higher highs what's

right here I'll give you a hint

LH means lower high price tried to rally

again right buyers try to continue this

uptrend but they failed and this is the

big thing here when this market fails to

make higher highs and higher lows that

is where things get interesting because

now we have the potential to look for

signs of a bigger reversal because

remember when the market is back and

forth all the time right for the most

part looking for signs of reversals

could actually end up being a reversal

and there's some pretty good evidence

that you could line up to try and find

good setups okay so with that said how

could you trade this concept well so now

we've got our level here right so we've

basically come up we've we've formed

this level here at the previous move we

made a nice move to the upside we made a

nice try but then we failed and formed

this lower high well now you might be

saying well we should just be shorting

right here right well if you knew that

this was going to be the we're gonna see

a major downtrend then of course you'd

say yeah short right here it'd be easy

but we don't know that in the case to be

fair we wouldn't know that this is the

end of the trend at this moment this is

too soon to tell because if you can

imagine if we're just trading right here

it still looks like it essentially is

bullish right well in this case what am

I gonna wait for well we've highlighted

this region right here for a reason

okay this level is considered our

neckline okay if we actually get a tool

there's a tool here on trading view

which is really cool you can go over

here and let's see head and shoulders

right and it will give you it'll help

you create just this kind of pattern so

now you can visually see if there's our

Head and Shoulders pattern left shoulder

right here head at the top right

shoulder at the lower high then price

breaks underneath what we would call the

neckline I'll put it out at the neckline

we break underneath well here is the

setup

guys here's the trade that I really like

on this sort of concept again remember

we're looking for the reversal so that

means we're looking to go short but only

once price starts to show us evidence

that there is a good chance that we

continue remember we have no guarantees

in trading Forex we only have

probabilities so where are we gonna

enter how are we gonna enter where's our

stop where's our target all of that

information what can we do with it

well let's get our short tool again

another really cool tool that trading

view provides us and bam this is our

entry on this strategy the idea here is

that as price retests the neckline after

breaking this is where we enter ok price

broke through the neckline to the

downside we saw a price break

underneath that level and then price

starts to retrace we make a move to the

upside and sure enough we see price fall

so to some degree this is kind of a

break and retest combined with a head

and shoulders technical pattern and

potential technical reversal ok so

that's where we're entering at least

based on this strategy price breaks

underneath the neckline we retest this

area we're looking for the continuation

or the start of a new trend so we're

looking for a trend to basically show

evidence of weakness remember let's

recap we're looking for a weakness in a

trend and we're looking to join it's

terrible handwriting I'm sorry a new

trend and that's exactly what this sort

of entry does we're looking for the

retest now where do we put our stops

right because it's important in this

case how are we gonna define our risk

for this sort of concept well we've got

this right shoulder I'm gonna use that

as my risk I could place a stop right

above the previous high stop above

previous high so when price comes up to

this previous high and falls from there

if price starts to break back above it

then I'm just gonna scratch the trade

just gonna take a loss no big deal ok

now you have some options here and this

is where things get interesting ok

because now

question of where do we put our targets

so we've answered a few questions we've

got the entry we've got the stop which

defines our risk now where do we put the

exit and you have some options here what

do I mean by options well you can go for

a strict something like a two to one

that would give you something like this

that means that our risk is one time and

our reward is two so if we have

something like a risk of $50 we're

potentially going to make $100 and with

you if you get some good setups and you

get good at finding these sort of

scenarios this could work out nicely so

you're making nice profits when things

go well and you're losing some profit

when things go wrong that is one way I'm

gonna give you some more options for you

to think about again at the end of the

day I'm not telling you what you should

do I'm telling you I should think about

right so you should think about this

concept and find which is most

comfortable to you because different

people are gonna be thinking different

things are better right so if you spot a

trend and you spot the potential

reversal you enter right everybody's

entry is going to be a little bit

different than the other person's right

people see charts differently so you

have to ask yourself practice this take

a look at the concepts go back test this

concept and figure out what works for

you so now there's another choice that

we have to make well what if we want to

target structure right so let's say we

look for a significant area on the chart

historically well we've got this level

here which looks pretty interesting

right take a look back here we can use

our concepts that we've talked about all

the time on this channel pivot moments

like this right are significant

historically that is where supply meets

demand and things pivot off of that so

you could make an argument that's

something like this or maybe this level

is a decent target for your trade so you

could place your target at the recent

structure this gives you a two point

three to one so again you have to ask

yourself do I want to go strictly off of

a risk to reward do i strictly want to

go off of a tip base target right do I

want to go for a hundred pips 200 pips

whatever 50 pips right that's another

thing depending on your time frame as

well remember I mentioned this can be

used on multiple time frames it doesn't

have to be the 4-hour chart but I'm just

giving it a demonstration and then you

have to ask yourself well what if I want

to take two

targets this is finally the third option

that I'm gonna give you guys to think

about right what if I want to basically

have two targets we could part we could

target halfway and take profit too so we

have to take profit one and take profit

two that allows us to scale out of the

trade you could put this one at a

one-to-one right that's something to

think about I know a lot of people who

love this concept they put a target at

one to one and then they put a secondary

target at the two to one or at their

second level or they even let the trade

run and that's a whole another concept

so again you have some options here to

think about how would you do this

well just so you know there's a really

easy way you just take two positions at

half size each one put on the target

here at the one-to-one level or wherever

you see fit for that first target and

then the take profit - okay so that

gives you a few exit criteria see we had

to think about the exit more than we had

to think about the stop right so the

target was a little bit more to think

about and that's that's honestly how it

should be in my opinion it's a little

bit you know your stop is certainly

important but it's also important to

think about you know your exit strategy

on the good side as well so something to

kind of think about there so again this

can be used on any timeframe it can be

used on the 1-hour the 30-minute the

15-minute chart it can be used on

different charts and this is where it's

also gonna come down to you doing a

little bit of back testing so I

definitely encourage you if you like

this concept if you like trading the

head and shoulders pattern it is a very

simple structure to to recognize you

don't have to be a genius to do it right

you just basically look for higher lows

higher highs right that sort of thing

and then you basically look for these

sorts of setups so this concept is

nothing super tricky so the average

person who's learning trading can

certainly start to find these patterns

to find these setups and to look for

them and to build a strategy around them

but I highly encourage you guys do not

take these videos and just say oh I need

you know just tell me the simple

solution that's always going to give me

every single answer with no problem

right what I encourage you to do is take

these videos that I'm sharing I'm

sharing insight I'm sharing ideas and

then concepts that I've learned through

my years of trading do something with it

okay go take it and back test okay go

take it and back test these concepts go

on the chart spin

time take the the diligence to go

practice this concept spot them for

yourself share it with a friend share

the video with a friend and and ask

their opinion and we're learn and work

through it with them alright so back

test this concept well what else plan a

trading plan I guess make a trading plan

cuz you guys get the point make a

trading plan you guys would be surprised

in our in our business we provide all

sorts of different services for traders

and we are constantly amazed that there

are so many people out there who do not

have a simple trading plan written down

I would highly suggest whatever you

stick to or if you want to stick to

something consistently write it down

physically on a piece of paper put it on

your desk that will help you at least it

does for me it'll help you remind

yourself what the plan is and how to

treat everything so this is all just

kind of based on at this concept of head

and shoulders if you did enjoy this

video do me a big favor please subscribe

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you and I will make sure to continue to

make more content like this comment down

below what you thought of this strategy

guys thank you very much for watching

and we will see you guys back next time

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