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10 Steps in the Forex Market Looking to Buy
The market is at a point where we’re looking to buy now from this point forward if we were to buy this market we would use demand zones to do that to mark the demand zone we just need a tool that will show us a square I use this rectangular tool and we just want to mark the consolidation Before the big rise it moved so we see here that there was a big upward movement.
10 Steps in the Forex Market Looking to Buy
Here we see that there was a consolidation so we had a push-up and then the market moved sideways and that’s the consolidation and then we have another push up so this area here is going to be the demand zone now, the rule I like to use to determine my supply and demand zones is the last candle before the impulse wave, So the impulse is just a prot directional movement in the market like this last candle.
Before it was whatever the final consolidation was before we saw a push away Okay, so here we have a Wix on both sides, which is an indecisive candle, which is the last candle before the impulse when the market gets back into that demand zone, and we’ll then look to buy as we just mentioned because this It is seen as a discounted price, and we know that buyers control this market.
Find a good price to buy this asset in Forex
People may not be happy buying here, so this demand zone, where a lot of buying has occurred before, will be seen as a good price Buy this asset, so once the market returns to this level, we look to buy Simple trading example using This would look just like this, we have a stop loss below the area.
We have an entry into the demand zone and our target will then go up towards the higher highs, well, towards the next higher high, the previous higher high that was formed because we know if this market is in an uptrend, it should continue and form a new higher high, so targeting the higher The former is a very safe way to enter a trade and as you can see it would have made a profit of 2.77%.
The Forex market trades in demand
This is a very profitable trade to do now, now we move on to the next step, where we’ve got a new higher high which means we’re going to look again at the demand zone, if we just use our demand zone tool here, we can mark this Type of the last candle before the impulse wave.
If we had bought here we would have lost the trade, well let’s say we had gotten a stop below that we were looking for in terms of trading to the highs or more, we would have lost that position because the market was trading in demand but then it traded up but This loss would have been a 1% loss.
Risk reward weight in forex
Take a look at the purchase we just made You made a profit of 2.77%, so after making these two trades, you will still be up 1.77%. You can see how we can stay afloat by weighing risk-reward by winning more on our winning trades than we lose on our losing trades. We balance those gains and losses very well.
This also brings us to the next thing which is by forming this lower bottom, we have instigated a market reversal, so what we have done by forming this bottom here is removing any opportunity to buy in the future and we have now instead turned to selling, Okay if we just take a look at the area here, we’ll see that we have a clear display area.
Forex risk vs reward system
Now that we’ve formed a lower low we’re going to use supply since our sell zone is okay, so what we’re going to do is place our sell order on the zone, where we stop loss above the high and then target down to the final low which will be here about to process this bottom, so You can now see this trade is a 2.97% position now.
This highlights the importance and beauty of the risk versus reward system we have developed. As I already discussed, I want to make sure that we win more on our winning trades than we lose. In our losing positions and on those three trades in which we had two wins and one loss, the total net profit generated at the end would be 4.74%.
Make more money on Forex winners than we lose
This is because the gains we make are almost three times greater than the losses, so even if we lose half of the trades we make or even more than half of the trades we make, we will still make profits because we make more profits on winners than we lose on losers, This is a very important element in the system and it is one of the easiest ways in which you can make a profit by bringing this.
You’ll also notice that those three trades we just made look very similar, they follow the same format which means they’re easy to apply consistently to the markets, so now our trade format is very simple, we’re looking to find the prevailing trend and obviously in this case it’s bearish Now because we are forming lower lows and lower highs.
Summary
You might want to identify open supply zones in Forex we use these supply zones to sell we put our stops above the high and our targets down to the recent lows and we’re just looking to rinse and repeat this process until the trend turns on us, as you can see here we’re getting a click on the way to creating a line new.
