Buy low sell high is the shittiest advice you could ever give a Forex trader
Should you be a reversal trader or a trend trader?
Well, I've already pretty much alluded to it
But we're gonna dig into this one pretty deep because if you get this wrong the chances of you ever
trading at a pro level are very
Very slim if you don't know me, my name is VP. I'm a professional Forex prop trader here in the States and
My goal is to get you to a pro level and get the right fundamentals
instilled in you before the game even starts and if you're a more experienced trader kind of push you back on to the
easiest path to become a pro because there is an easy way and a very
Very hard way and a lot of it at its core depends on your answer to this question right here
so in this video, you're gonna learn what the right answer is if you haven't guessed it already and
I'm gonna show you everything that is wrong with the wrong answer. I
think the majority of you watching this video are probably on the wrong side and
You've been doing it a while and you believed in it and I am going to in 10 to 15 minutes
Do my absolute best to talk you out of it. Because if I can't then you and I really can't go much further
Alright, so play along at home. What should you be doing?
reversal trading or trend trading in forex
The answer is trend trading and it's not even close and I would wager to say that most of you don't do this
I would bet because the numbers already back this up that the majority of you are
reversal traders you do try to pick tops and bottoms and
I don't disparage you for this look you heard the whole buy low sell high mantra growing up in investments and
you just started out that way and some of you at some point probably did pick a top or a bottom and
It made you feel amazing and why wouldn't it? you went into a
Four to five trillion dollar de market and picked exactly when it was going to turn
I mean, especially when you're starting out if that doesn't make you feel like a god, you know, I don't know what else does
But it's one of the worst things that can happen to you long term
It's the same thing as going to Las Vegas
For the very first time and playing a slot machine for the very first time and hitting a jackpot on your very first pull
You know, it's great. But what it's going to do is
You're going to allow yourself to just lose and lose over and over and over again until you chase that jackpot
And that second jackpot might not ever come
but even if it does
all you are doing is
Focusing on the possibility of another one hitting what you have lost focus on is your bottom line
your trading account
Where is it? Where is that trading account? Mr. Stud reversal trader guy who picks tops and bottoms at the end of the year
What does it look like? Well for over 99% of
forex traders out there who trade real money that answer is disappointing that answer is either break even
barely profitable or for the majority of people down
We just keep chasing that dragon don't we? in
This video I am going to do my best to explain to you why that method of trading was flawed from the start
it really wasn't you it was the way you were shown how to trade and
The method that you just stuck with there was a problem. So let's get into this first off. Let's start with buy low sell high
It's probably perfectly fine advice in stock trading
um a lot of you probably especially if you're an American learned stock trading or at least, you know,
We're interested in it before you found forex, but it's just not a good idea in spot forex at all
I'm going to talk about this because and this is the biggest thing
Understand this before you understand anything else
overbought and oversold
Does not exist in spot Forex if you have seen anybody utter these words
With a straight face when talking about spot forex
Run away and never patronize their website ever again because it's not real and
Telling you it is is one of the most dangerous things people can possibly do because currencies are not stocks
equities like stocks like commodities like a gold they have real values attached to them stocks have assets and
balance sheets and products and you can
Factor all those things in to determine a reasonable price for a particular stock
And if you feel that number is way too high
Okay
That stock might be technically. I'm doing air quotes here overbought
But currencies aren't like that. The price of any currency is whatever the big banks decide them to be
What do you know about the big banks? Did you wash my big banks video?
if
You haven't I'm okay with you pausing this video right now and going and watching and I'm gonna link it down below
because it is that important you cannot be a real trader in this market and not
understand who the people are that move price up and down and why they do it if
You're even going to be an average trader in this market. That is a
Prerequisite and I break it down for you. Really really well in that video
But I'll I'll give you a kind of an abbreviated version of it here
For those who just want stick with this video the big banks of the world and we all know who they are
These are four of the major players
They have so much controlling equity in the forex market that if they decide prices going one way
That's where it's going to go. You might think all these news events determine where price goes
It doesn't if it's a big enough news event, the big banks understand that price will have to go one way
But the big banks decide when that change happens not us
It's not like in stocks
If a bunch of money all of a sudden floods into the market one way or another that determines where price goes in
Currencies and spot forex that determines the opposite of where price goes
Let me explain the big banks do this
on any given day they have
software
That can tell where most forex traders have their money and not so much really have their money
But where that money is headed
So like on the euro dollar if that money for the most part is headed long then all they do is just take it short
It is in their best interest to do that. They collect
When they go the opposite way they lose when they go the same way that you're going and by you don't despair
I mean the majority you can be in the minority
That's actually exactly where you want to be and if you can be in the minority more than the majority
You're gonna do just fine
but the banks take price the other way and I'm going to show you in this video exact proof of how this happens and
they take the money and
Redistribute it back into the market and that's how they are able to make price go up or make price go down
so if you didn't know before
You know now and if you are still a bit confused or would like to know more about how this happens
That's where that big banks video comes into play. But let me tell you big banks
absolutely, love
reversal traders
Reversal traders are the big banks oxygen
They need you to survive if the big banks fed off trend traders price would never go anywhere
But at some point on any given currency pair the big banks are going to want to take price up or down
How far they take it up or down,
Depends on how many reversal traders are setting they're trying to call reversals on the way up or on the way down
This is how it works. If you see a currency pair that trended down for a very long period of time it's because all
the way down there were reversal traders trying to call reversals and they just didn't stop and
Only when they all collectively said, okay, we give up. We're tired of losing all our money. We're gonna
We're gonna go ahead and bet with the trend that is when the reversal actually occurs. I'm gonna show you this
So let's go to the dollar yen
That's one that trended really good in the last six months or so
That'd be a good way to, a good example for you. All right
So here we are on the daily chart of the dollar yen. You can see about a six-month sample size here
and
This is a really good example because this pair had a really nice
downtrend here and then made a really pretty little V and went right back up and
What I'm going to show you on a tool that I used in my big banks video that pretty much proves
Everything I'm saying to you right now
Is that the reason why this trend went as far as it did and the reason why this one went as far as it did?
Is because money kept going the opposite way
They wouldn't stop trying to pick the bottoms and the big banks said okay, if you're gonna do that
We're just gonna keep taking price down and take all of your money
Alright, so let's move over to that tool now and here we are. I won't even bother linking this below you can just go to
www.dailyfx.com slash sentiment and it'll take you right to it. It's a neat little tool
I don't like it for predicting where price is going to go
But I really like it for proving my point when people try to argue with me saying that
There are other entities out there that take price up and down. No there isn't it's the big banks
They are responsible for 99 percent of it and I will show you why let's go to that dollar yen
pair we were looking at
Over there. Yeah, so this blue line and it'll turn red if it gets too low
But this is dumb money
This is the reversal traders. This is the majority of the traders out there
the people who run this have enough
evidence enough data
as far as what their traders are doing and they have so many traders that if their traders are doing it's pretty safe to say
That most traders around the world are doing the same thing
So what they do is they figure out
Which way their traders are headed long or short on any given currency pair and then you can see in the background where price?
actually went so
Kind of starting up here
traders said okay, we're gonna ramp up and try to go long and
The banks immediately said okay. We're gonna go short
Trader said we're gonna try to pick reversals. We're still gonna go long and all throughout this process
Price just kept going down down down down now they stopped going longer
but a lot of them stayed long and that's why this blue line is still so high and so during that whole
process
Where these reversal traders were sitting there saying okay any day now price just kept going further and further down
There's one time where they kind of all went short and as soon as that happen look,
That's where that retracement happened
The banks said okay. You want to go short we'll just go long
Traders are like LOL. Jk, we're going to go higher like we wanted to and the banks were like oh, okay
we will just go lower and
Only when did they all together decide to go short and keep going short
Did the banks say okay now it's time to take price
Back up
Traders all went long and stayed long
price kept going down
traders
switch their pattern and
The banks did too all the way up
This is how they operate this trend will keep going down as long as traders. Stay long
Only when do they all decide to go the other way?
Does price go the other way
This is how it works and how far a trend goes
Depends how many people are sitting there trying to pick that reversal
I know there are a lot of reversal traders out there right now, and I know this stings
But I hope it's starting to make sense to you
Stop being a pawn for the bank's because that's exactly what you are. My logo for no-nonsense. Forex is pawn takes king
That's where we're aiming for because right now if you're a reversal trader King is taking pawn
Every single time they are using you they are taking your money and they are loving it because people like you will never run out
You will always be there to try and pick tops and bottoms
You will always be there to lose and just like a Vegas casino
They're gonna give you a little win here and there just to keep you in the game just to make you feel strong and smart
but in the end
Your account goes down and their account keeps going up and I feel the need to throw this in here - because I'm an indicators
Guy, but the indicators that you use any tools that you use to try to pick reversals are only doing you a disservice
Because it's like that first pull on the slot machine. They're gonna work
Sometimes there's gonna be range bound markets where these things actually look pretty good
But as soon as the market starts trending you're done and let me tell you this - I am an indicators guy even the best
Reversal tool out there on the market that I've ever seen is really bad
So if that's really bad. These horrible outdated things are even worse. But so many people use them
You know how many hits these get on Google how many searches for stochastic sand RSI alone?
thousands a month
For a tool that even in the reversal world, which is already shitty are
Probably the bottom of the barrel in terms of tools because what do they do?
They try to find out when a currency is or currency pair is
overbought or oversold
And there is no such thing. So let's go ahead and wrap this up in conclusion reversal trading
It just makes it way too hard to make consistent money in forex
everything is against you in particular the people who move price up and down or against you and that's really
Really bad. I implore you strongly to move over to trend trading
It's much more fun because it's much more successful and I'm gonna do everything I can
To set you up for success here. This channel was built to do that with very easy to follow instructions
done in a very brutally honest tone because it's about time somebody came into that and if you
like the message I am sending to you right now if
You are frustrated with all the other Twitter feeds and websites and YouTube channels telling you to do the same thing over and over again
Seeing how well it works when they do it, but then when you try to do it, it doesn't work that well
This is where you need to be subscribe to this YouTube channel
I'm going to springboard you so far ahead of most traders in a very short amount of time if you just go to
The FX strategies core concepts playlist and just watch those videos alone. You're gonna be in a much better place than
95% of spot forex traders in the world and then every single video I put out thereafter is just going to get you that much
Closer to exactly where you've wanted to be this whole time. All right
Until then go get it