High Probability Trading Setups

Forex Guidelines

How to trade successfully

Nothing is for sure in trading and traders always have to live with uncertainty. The trader can only try to find High Probability trading setups with acceptable risk in relation to the price target. After years of trading, I am convinced that the understanding of market manipulation in Forex - Stop Running - and the presented technical charting patterns/ tools are very effective Forex Guidelines for traders to find High Probability trading strategies. For profitable and successful trading I think it is important to understand these basic charting tools. But more important is to put everything in context and to analyze the intention of the market manipulator. The analyzed chart patterns give the trader a Guideline on what chart levels market is likely to react. The way how market price is reacting at these levels depends on the market manipulation strategies as well as on context (trend/ consolidation, confirmation/ non-confirmation of a price breakout, candle close at or near a level at an important timing point (4-hour, hourly close)).

The first step is to know the important price levels as well as to understand the manipulation of the Forex market - stop hunting- and the second step is to analyze price action at these chart levels (e.g. confirmation of a breakout or price rejection, fake breakout - only stop running).

If market is close to a key chart level (first test) a bounce from this level is likely. Very often, the first breakout fails, which not only catches some stop orders but also fools breakout traders. A true breakout often occurs after the stops of the early breakout traders got already cleared by the false first breakout. If market returns quickly to the key level after the failed first breakout (second test) or market even consolidates at the chart level (Continuation Chart Pattern) then a break of this market level is more likely particularly at an important timing point (either again for a false price breakout-stop hunting - or true price breakout- confirmation).

In generell, after the breakout traders got trapped and stopped out due to the false first breakout the chance for a true breakout is increasing with the second test of this market level. Furthermore, a trader should also understand the changing role of support/ resistance levels after a confirmed break of a level.


Overall, a trader should try to understand the intention of the market manipulator and a trader should use the technical chart analysis to find confluence levels where more charting signals agree on a specific level to find profitable trading setups.

The market recaps should help traders to get a feeling for the use of the chart analysis tools and the characteristics of price action. The market recaps should also explain the most influencing chart technical factors (IMO) on the price movements to give traders an idea how and why market reacts in a specific way.

Many chart patterns will repeat again and again. If the trader understands these High Probability trading setups and strategies as well as the likely implication of these trading setups for future price action and price targets plus the implication of a rejecting of these chart patterns then someone can tie everything together and search for these profitable trading strategies (key levels/ confluence levels, market manipulation/ chart patterns) to successfully trade the Forex market.

However, the most important key factor about forex, which might separate the winners from the losers, is the understanding of the market price manipulation in Forex. The ability to understand and to see the market manipulation on the price charts should enable the trader to find profitable trading setups and strategies.

However, for the longer term, it is also very important to analysis the fundamentals of the currencies. I personally like the investment bank reports on http://www.efxnews.com,/ the analysis on zerohedge.com and the fx pulse reports and gic weekly from Morgan Stanley. 

Visit Stop Running and Market Manipulation in the Forex market to learn more.