If you haven’t read first article about the “Smash & Grab” trading setup, you can read it here.

The beauty of this strategy is that it works based on the principle that there are many traders watching support and resistance levels, waiting for them to break.

When they break, many orders are often times waiting on the other side (the way we did it).

Many traders refer to this type of strategy “breakout trading”.

This is NOT your average breakout trade!

The key difference is that while other traders are looking for the move to carry through, all we’re doing is looking to grab a quick 20 pips as these orders get filled and cash out quick – happy with our payday.

Continuing with the example – you can see below, we hit our target with ease (at the arrow)… pocketing $200 per contract – or $20 on a mini contract.

Now here’s where you can start to leverage this strategy…

As you start to bank some profits, you can then to get aggressive with the “market’s money” and look into ways to start trading the retracement, and subsequent follow-through of that breakout.

In the next chart you can see the market rallied an additional 100 pips AFTER our little trade.

Are you starting to see the potential with this?

Of course on its own this strategy is pretty awesome… but its just the tip of the iceburg.

We’ll further develop this idea in future articles and look at how we can suck even more pips out of the market!

Categories: Trading
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Learning to read price is one of the most profitable skills you can develop.

Until recently it was a very labor intensive process to gather price data and test out ideas.

I remember when I got started, charts were delivered weekly – with enough space on each chart to update it by hand.

Indicators were virtually non-existent, as computers were not a household item.

Today the internet has has allowed anyone, anywhere, with a computer to have access to powerful tools. The key is learning how to use them.

One of the fastest ways to improve your trading ability is by using free resources right in front of you.

Here’s what to do:

Firstly, get yourself setup on a demo account. Any broker will do. Check out IBFX.com if you don’t have one already. They’re free and you can get setup in minutes.

Open it up, and take a look at a chart. I’d suggest looking at either the GBP/USD or EUR/USD. Any pair will do, so if you already have a favorite, then go with that.

If you’re brand spankin new to this head over to babypips.com to pick up a bit of basics about what the chart is showing you. Then come back to continue.

Now go to the timeframe you trade (or plan to trade). Don’t have one? Well try the hourly.

At the top of the chart, there is a little button with “H1″ on it, click that.

Now press the “Home” key on your keyboard. This will take you to the beginning of the chart.

Here’s what you’re going to do, move forward, bar by bar, you do this by clicking on “F12″ – found at the top of your keyboard.

What are you looking for?

Well the first few times you do this… don’t look for anything, just get your eyes used to how price moves.

Click to the next bar at your own pace.

Don’t go too fast or too slow.

Now what have you done?

You’ve compressed, typically a year’s worth of trading into only an hour or so of actual screen time.

Do you see the value in this?

Yesterday, while waiting at the dentist’s office, I read an interesting article.  It detailed how researchers found that amassing 10,000 hours of practice lead to mastery in just about any subject.

In his early high-school years, when he should have been in bed, a young Bill Gates would head off to the University of Washington where he and his friends racked up 1,575 hours of computer time on the mainframe computer.  That averaged out to 8 hours a day – 7 days a week.  By the time he dropped out of Harvard he’d already been programming practically non-stop for seven consecutive years. He was way past 10,00 hours.

Not into computers… well there was another excerpt about a band.  While most bands don’t perform 1,200 times in their entire careers, this group performed 1,200 times in a 4 year span.  By the time The Beatles broke out in 1964 they’d banked 10,000+ hours of gigs.

The article went on to highlight more and more cases, in a variety of different areas and how practice was a key ingredient to success.

This made me realize WHY this trading exercise is so powerful, and why it’s really a secret to why professional traders outperform the average.

Successful traders spend countless hours pouring over charts,  studying the market AND following the market in real-time.  Is it any wonder they get good?

But what’s really encouraging is that success is possible for anyone willing to put in the practice.

And that’s what this exercise is all about.  You don’t have to wait and watch 10,000 hours of price action in real-time – you can compress years of data into a few hours.

I highly recommend you do (and repeat) this exercise whenever you can.  

Hone your skills… trust me, this is a priceless skill!

Categories: Trading
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Sound good?

I thought so…

Ok, let’s get started…

I’m about to show you a great little trading tactic you can use to grab some quick profits.

I’m assuming that you already have some knowledge of how to trade forex. If you don’t, run over to www.babypips.com and start building a foundation – because what I’m about to share doesn’t get into how the forex markets work, or how to place orders, etc… it’s the nuts and bolts of a quick and dirty strategy you can use to start banking some pips in the next day or so.

In fact its so easy you might just want to make this your entire strategy.

What is it?

It’s a price based trading strategy that:

Doesn’t require any special indicators.
Works based on trader psychology and strategy.
Can be applied in any market.

The “Quick 20 – Smash & Grab” Strategy

First we’re going to pull up an hourly chart. I use Metatrader, so you can follow along with my charts, however this works with any charts.

Step 1: Grab your chart.

Pull up an hourly chart. I like to follow GBP/USD and EUR/USD, and I advise you to follow those – of course it works in other pairs, but why get greedy

Step 2: Find Support and Resistance Zones.

Zoom out and look for highly identifiable support and resistance zones.

Support and resistance are levels price points where the market stopped and turned around.

So if you look at the chart below, you’ll see I’ve marked off potential areas of support and resistance. (Ignore the red and green dashed lines – that was simply an order I had placed in the market.)

The blue highlighted areas are not exhaustive by any means… the whole point is to show you where ever the market turns, support/resistance points are found.

What do I mean by highly identifiable?

Well as I said, anywhere the market turned is a support or resistance level. But not all support and resistance levels are created equally…

Areas where the market has repeatedly hit and turned at are “better” levels of support and resistance. The more hits the better.

Also the bigger the time between hits – the better.

It’s probably easier to understand with a picture…

The areas with the arrows pointing to them have multiple instances of price reaching and turning at those levels. Now they are not exact price touches and turns, but regions. The more the better.

When I find these points I draw some lines on to highlight the support/resistance areas…

I put thick lines for support/resistance I feel is stronger – and thinner lines for weaker levels.

That’s it.

Now I’ll probably get asked, “Why aren’t your lines on exact levels?” or “Why are some lines touching price, and other not?”

The whole objective here is to simply mark areas where price has shown to turn – that way we can use those levels in the next step.

Step 3: Pinpoint Price Setup – And Place The Order

Find the most recent price action that is near (or touching) a support or resistance level and place trades on the other side of the support / resistance with a stop of 20 pips and a target of 20 pips.

So in this example, seeing the resistance level at 1.6554, I’d find the place an order to buy at the high of the bar in the blue ellipse – 1.6555 (+4 pips for the spread) taking it to 1.6559.

I’d then set a target at 1.6579 (1.6559 + 20 pips) and a stop loss at 1.6539 (1.6539 – 20 pips).

Step 4: You’re Done!

Sit back and let the trade work itself out… go for a walk… read a book… go to work…

Of course I can’t force you to walk away, but it’s always nice coming back to your computer after an afternoon out and seeing more money in your account than you spent that day

Of course all trades don’t turn into winners – and that’s fine… as long as we win more than we lose we’re happy.

And with this strategy – we’re happy…

But don’t take my word for it – test it out for yourself!

There is a way to enhance this strategy even more… and we’ll get more onto that in the next article.

Categories: Trading
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