Truth About FX

EP43: How to Place Profit Target


Listen Later

Do you ever ask yourself will the market go how far? Will it turn around and go against me? If so, what will you do when it does?
In this episode of Truth About FX, Walter delves into the area of market levels, chart patterns, and the different exit methods that might suit you depending on your beliefs. He also touches on the many sort of things that can happen against your trade and how important it is to accept that those things can also happen to you.
According to Walter, the market has a memory and that it is imperative to anticipate these events and recalculate your risks.
Download (Duration: 10:37 / 12.1 MB)
In This Episode:

00:34 – the philosophy

01:53 – a magnet

03:24 – the meat of trading

04:53 – a gift

06:58 – misleading

08:02 – a balance

09:07 – going downhill fast

10:12 – a major hit
Tweetables:

You have to assume that the market will continue onward. [Click To Tweet].

You need to have control over your profit target.  [Click To Tweet].

Just because you got stop loss, doesn’t mean you’re at max risk. [Click To Tweet].
Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.
Hugh: Hi, Walter! How do you know how far the market will go? How do you know where to place your profit target?
Walter: This is really an interesting question and I’ve been discussing this with other traders because it gets into the philosophy that you hold as a trader. The way that I approach it — which is not necessarily the right way for everyone — is that I have a belief that the market has a memory and that there are places on the charts where price repeatedly reverses.
It goes to a high that it has been to before and it pulls away from that and starts turning lower. Likewise, it’ll go to a low that it remembers from sometime historically and then it’ll start trading higher. I believe that it bounces off those levels and sometimes it’ll go to a level and stop there and wait and pause and gear up for a burst through the level. That is how I trade.
Really, what I am doing as a trader is I am waiting and waiting and doing a lot of waiting ‘till the market gets to one of this levels, print a pattern, and make it forex liable pattern that I know I’ve tested and I am comfortable with. That pattern tells me whether the market is going to reverse at that level or whether it is going to be breakthrough that level.
That is really how I trade. Now, the question about targets comes in and my belief is that once the market either reverses off one of this support and resistance levels or breaks through one of this supports and resistance levels it is now attracted, it is almost like there is a magnet at the next level.
Price, naturally, will find itself attracted to that next level so my targets are pretty clear. They’ve got to be the next level or the level after that if I am really going to get really aggressive,
...more
View all episodesView all episodes
Download on the App Store

Truth About FXBy Walter Peters (FXJake) and Hugh Kimura (Trading Heroes)