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Learn To Trade Bank Manipulation – Live Forex Trade USD/CHF 6/4/13

This live trade example is of a very clear stop run of the current day’s high. One of the most important parts about our bank trading strategy is that we look for very specific criteria to be satisfied. We will never know what the banks are doing all of the time. With that being said we do know with a high degree of certainty what they are doing once the figuratively ‘show their hand’. I don’t care what market you trade you must have a buyer when you want to sell and you must have a seller when you want to buy. Simply put we search out points of high liquidity and wait for the banks to show they are taking this liquidity. It is a simple fact that you either understand how to trade market manipulation or you will become the victim of it. There is no debating the banks move the forex market….therefore knowing how to track them is critical. This live trade will illustrate one simply way…check it out!

This trade setup was very basic in nature. Essentially we had a very clear stop run reversal above the previous days high. After the nice set of reversal legs closed it was a confirmed stop run  in my book which indicated smart money was inducing buying pressure and then selling into the buying pressure. How do I know there were buy orders above the high. Simply put what type of stop goes above the high? If someone is short stops are generally trailed above the last high. If someone is short the market they have to buy it back which is one type of buy order we expected to have above the previous high. We also expect those that are going long with breakout trading strategies to have their buy orders just above those highs. Therefore when the banks break above previous major highs all these buy orders are triggered. The way to identify it as a stop run is by whether or not it get immediately rejected back down below the manipulation point. In this case the rejection back down below that high was very clear and aggressive thus confirming the stop run which triggered my entry.

Overall this live day trade setup ended up netting me +35 pips. The reason for taking an early exit on this trade was due to the NY session close. Simply put if I take a trade during the NY session and the trade is still active at or near 5PM Eastern then I close the trade. The same rule applies when going from London into the NY session. When you go from one session to the next you are subject to the next sessions manipulation and therefore protecting your trades going into another session is critical. When going from London into the NY session I do not close the trade like when I go from NY to Asia. When going from London to NY I very simply move the stop to break even. The reason I only move the stop to break even when going from London to NY is because you are going from one active session to the next. When going from the NY session to the Asian session you are going from one active session to 8-9 hours of often no price action or at best very little. Due to this lack of price action I close the trade out. The bottom line is if your not protecting yourself when carrying a day trade from one trading session to the next by either closing or moving to break even then you need to give it some consideration. I hope this live trade setup helps in your own trading!


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1 Comment

  1. UTTAM
    UTTAM June 08, 07:33

    Excellent strategy by Sterling & Chad.Highly appreciation. Both of u have done
    marvelous 7 hard work fo Fx traders.Salute both of u.

    Reply to this comment

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