Trading experiment:
Today’s lesson will accelerate your trading success if you put into practice an interesting trading experiment that I have designed for you.
This is a potentially life-changing experiment that will teach you many valuable trading lessons very quickly (within a month), so you can explore areas of your mind that may not yet be activated. is opened.
What you’re going to do is trade every price action signal you see for a month. Use pin bars, fake setups, or inside bar patterns seen on the daily or 4-hour charts of major markets. Day. We recommend performing chart analysis to find your own trades. Also, follow the analysis in the Daily Member Trade Ideas Newsletter in the Members Area.
This experiment has three objectives:
1. To remove the fear of entering a trade, pull the trigger more often, trust your judgment, and avoid living in constant hindsight (you know you should). (I regret not making the deal I was doing), simply make it a habit to: Execute trades instead of just watching and hesitating.
2. Reveal the randomness of achieving risk-reward goals and reveal the truly random distribution of winners and losers.
3. To prevent future overtrading, by the end of this experience, trading all signals and making all trades will churn your account of spreads/commissions and lose trades that could have been avoided. I understand that your revenue will decrease. filtering.get you out of the machine gunner One Shot One Kill “Sniper”
R.Experiment rules and conditions:
The rules and conditions for this experiment are very simple. However, they must be followed exactly for the intended lessons to be effective and to prove their point. Here are the rules and conditions:
- Place trades or demo trades of 1 micro lot or less, but actually execute trades on the broker platform, keep records, and develop a habit of making trades.
- Look at the 10 or so markets you follow in your Daily Members newsletter and pick as many as you see fit: pin bars, inside bars, fakes, 4-hour to daily charts (excluding timeframes less than 4 hours). Trade Signals.
- We apply a 2:1 risk reward with a minimum stop of 0.5% of the market price and a minimum target of 1% of the market price (about 50 pips stop and 100 pips target in Forex). For gold, indices and commodities, we will adjust this accordingly.
- All trades are set and forgot to set. So either stop or hit your target and don’t mess around with the deal once it goes live.
- The goal is to determine the overall RR (Risk Reward). We measure losses as 1R (one times the risk) and gains as 2R (two times the risk). Read the lesson to learn more about why we measure results in R instead of percentages. Learn more about risk rewards here.
Experiment run:
Here are two trading examples to get you familiar with how this experiment works in practice.
1. In our first example, we can see the 4-hour chart EURUSD pin bar signal formed at support levels in the context of the recent trading range we saw on this chart (see also daily view).
Simply set your stop loss (in this case below the pin low) and entry (pin high) and target (2x risk) when you find a clear and obvious price action signal like below. Trade goes.
You should also record transaction details in a spreadsheet/trading journal to track transactions and ensure accountability. Note that the risk reward is the most important “proof” of each trade.
Since we have a strict RR of 2:1, we have some flexibility in placing the stop loss (see article link for where to place it), but the profit target should always be 2x the stop distance. there is.
2In the following example we are looking at an inside bar signal formed in gold’s recent uptrend. It’s a pretty simple deal: find and set, set and forget.
Since the stop loss is usually below the mother bar low, the target is twice the stop loss distance. In this case, as in the first example, we know the target has been hit and won. However, of course, not every trade is a winner. One of the points of this experiment is to show that not all trades can be made. bad person.
Hopefully, after seeing all the signals for a month, you’ll find that merged trades like the two above are the trades you want to take most of the time.
Other Considerations…
Make sure the price action signals you’re taking are what I’m teaching you don’t want to just trade what you think is a pattern.You need to start trading the real edge . That’s the beginning. Blindly entering “all pinbars” or “all fake setups” without any other evidence can actually produce surprisingly profitable trades, but overall, consistent long-term It is not enough to achieve success. Its edges must be refined and filtered to get only the ones that occur with the absolute highest probability of these setups (more on this in other lessons). explained and taught in professional trading courses).
Traders should not approach the market with pessimistic energy and try to “avoid” trading losses. Because it is impossible. All traders lose money and make bad decisions from time to time, no matter how good their chart-reading technicians are. Instead, traders should approach the market with optimistic energy and focus on finding winning trades that generate substantial rewards relative to the risk. This experiment is designed to trigger trades and avoid constant freezes like deer in headlights (pessimistic energy). Designed to tell you that your edge will generate winners and losers in a random way over xyz time periods, and being a little more selective in the trades you make in the future will greatly improve your results and give you complete confidence (optimistic energy).
After completing the experiment, there will be many trades that you can look back on and learn something from. You’ll want to study what went very well, study what didn’t, and find some commonalities that will act as a filter for future trades. As you grow and learn as a trader, through your own experience, screen time, and continued research, you will learn more about how to find the best price action trading opportunities in the market and your ultimate goal is to , a “crocodile” waiting in ambush for your ideal prey (your next high-probability deal).
From here, I would like to ask you two things right now.
1. Post your commitment to run this experiment in the comments section below.
after that
2. After completing the experiment, answer the following questions and reply to the comments below.
- What did you achieve in overall profitability or loss? Example: 30 losses 20 wins, total R return loss -20 R ?
- What trading habits will you continue and what habits will you abandon in the future?
- Do you think you will be more selective and filter deals more carefully?
- Are there any lessons here that you would like to share with others?
I hope you enjoyed today’s lab lesson. I truly believe that if you follow this, you will learn many of the lessons that most traders learn over the years through a lot of trial and error.
Leave a comment below with your thoughts on this lesson…
If you have any questions, please contact us here.
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