Day Trading Forex Live was founded by the two traders, Sterling and Chad, with the aim of informing traders about the forex market and its internal workings. Through this site, you will able to learn some strategies and gain specific knowledge that will serve as your ideal foundation in forex trading and help you how to trade well.
Stop Run Reversal (Market Manipulation) LIVE Trade on the EUR/USD - YouTube
Using Previous Stop Runs
This video breaks down a EUR/USD short from May 2nd.
The day prior we had a very aggressive reaction to the false break higher that occurred during FOMC. This type of aggressive reversal and subsequent follow through tends to have follow through the following day.
The following day we had a stop run of the Asian highs during the European session.
While this would not satisfy the criteria for a stop run reversal, it does give us insight into institutional trading activity, and more importantly it offers a very high reward to risk based entry which is critical to successful trading in my opinion.
Check out the video for a complete breakdown of the live trade setup, as well as exit.
Additionally, learning to trade takes time and using a smaller position size (1 Micro) along with a proper forex education, will help you stay in the game much longer. The longer you can persist in learning anything, the better you will get at it. Learning to trade forex is no different!
Sterling Suhr's Forex Bank Trading Course & Live Training Room
The fact is only 10 banks control nearly 70% of the daily forex market volume. As such, they must search out buyers when they want to sell and sellers when they want to buy.
If we can then identify areas of liquidity properly, we can identify the highest probability turning points as we know smart money needs this liquidity to both enter as well as exact these large positions.
In this video I break down the key factors behind the level selection process, as well as introducing the basics rules behind apply this to the live market.
If you’re interested in learning more about the level selection process and Bank Trading Strategy you can do so via the course page here.
30 Day's to Better Trading - #1 Convert Your Dreams to Math - YouTube
Convert Your Dreams to Math
This 30 Day’s to Better Trading series is going to break down the best hacks, tips, and tricks I’ve found in over 15 years of trading.
Convert Your Dreams to Math is part #1 of this live video series. I started with this as having a clear vision of your goal is essential to actually achieving it.
This makes your dream more of a reality which is essential to staying motivated though the learning process.
We then walk through putting your dreams to math by writing out a compounding table.
By keeping this by your side as you trade you’ll have a constant reminder as to what can be achieved if you don’t give into the desire to revenge trade, over-trade, over-leverage, or whatever else you do to self-sabotage your trading success.
Additionally, having a compounding chart makes it real, and common sense dictates that you’ll be more motivated by something that is realistic as well as having a clearer vision of how to get there and the amount of time it will take.
I CANNOT understand the important of having a compounding chart near you while you’re trading. It’s the best reminder to stay disciplined I’ve found in 10 years of educating other traders.
What Are you Willing to Give Up?
The final part of the video asks a very simple question, what are you willing to give up to achieve your goal?
I don’t know about you but when I first started learning to trade I had a team of people telling me why I shouldn’t. Family members told me I couldn’t do it and I needed to get a “real job.”
Eliminate the people holding you back, and search out the people who can help take you to the next level. Most people can’t accept that you want something better than slaving for a 9/5 dead end job, and you’ll need to cut them loose!
You also need to look at your own habits? Maybe you want to put money in your trading account or join an education service but you don’t have the money.
Could you cut out things like eating out, smoking, alcohol, drugs, and on and on. You know what you spend your money and time on, only you can do the analysis.
This is where the list comes into play. Write out two columns as illustrated below.
1.) Working out
2.) Eating Healthy
3.) Sleeping 7-8 hours
4.) Daily chart analysis
1.) Going to the bar daily
2.) Aunt ‘Debbie Downer’ talking poorly about trading for a living
3.) System Jumping
4.) Smoking weed
Remember to leave a comment below with what you guys would like me to cover in this series. Until next time, happy trading!
Do you ever feel like you’ve tried every trading strategy in existence but nothing seems to work? Here’s the truth: The trading strategy you’re currently using is likely irrelevant!
Let me repeat that for emphasis.
For 95 out of 100 people reading this article, the strategy you’re using is irrelevant, and the simple ’20 Trade Challenge’ I break down in this article will prove it!
This challenge or test is designed to highlight YOUR ability as a trader, NOT the strategy you’re trading!
Specifically, the ’20 Trade Challenge’ or 20TC as you’ll see it labeled, will test your ability to handle the emotional stresses of trading. For most of you, this challenge will reveal the actual problem keeping you from trading successfully.
Simply identifying the problem is only the first step, though, and you must then work to fix it which is what the end of the article will do. Lets get to it!
Are you part of the 5%?
Years ago I came up with what I call the ’20 trade challenge.’
While the test is extremely simple it is also, extremely revealing. You will see like never before, in very simple and direct terms, exactly what you need to do to turn your trading around today!
For this to work you really only need 2 things.
1.) You need to actually be trading.
2.) There needs to be a specific strategy that you’re trying to implement.
If you’re just placing random trades that “look good,” then you already know your problem!
The only other requirement I would mention is that you must be honest with yourself which is often the hardest part of getting people to benefit from this challenge.
If you lie or point to anything other than YOU being the cause of your trades then this exercise will not help. Only if you accept full responsibility for your results can you improve them!
After all, if everyone or everything else is responsible for you losing, then how the hell is that going to change?? How are you going to change everyone else to get the results you want.
If you’re going to accept and take credit for you profit trades, then you must do the same for your losses.
Let the challenge begin...
Step #1 – Pull up your last couple months worth of trades. To pull up your record of trades in MT4 you do the following…
After opening your MT4 platform click ‘View’ in the upper left-hand menu and then select ‘Terminal’ from the drop down menu.
When the terminal pops up you’ll click ‘Account History’ in the bottom tabs. This will bring up your recent history. To pull past trades simply right click among the past orders and then click view ‘Last 3 Months.’
After the past 3 months have loaded you will again right click among all the trades and click ‘Save as Report.’ This will allow you to save the report so you can print it later.
Note: Printing the report will make the next 2 steps much easier, although it is not necessary for those without a printer.
Save Trading Report - YouTube
Step #2 – Go through those trades individually and put a check-mark next to every trade where you perfectly executed your trading plan. If you did ANYTHING outside of your trading plan or list of pre-determined acceptable actions, it should NOT get a check-mark.
It is important to apply this rule with some common sense as sometimes the market requires some small deviations from the plan. That said, a revenge trade where you double down is not an acceptable deviation lol.
IMPORTANT: To reiterate, this only works if you’re honest. If you lie to yourself during this step please close the computer and go to the casino; you’ll have a better chance of success.
Step #3 – Put an X next to every trade that DID NOT follow your trading plan perfectly. This would include things like revenge trading, over-trading, boredom trades, over-leveraging, etc…
Again, use some common sense. You know when you broke your rule-set and you know when you did not.
The Ugly Truth About Trading Losses
Here’s the ugly truth that the 20TC reveals; 95% of traders will not have a single chunk of 20 perfectly executed trades in a row (the majority won’t even have 10!!).
No matter how profitable the strategy is, an inability to consistently follow a plan will always result in losses.
Main Point: Until you can follow your trading plan for 20 consecutive trades, the strategy you trade will not matter as your losses aren’t the fault of the trading strategy you’re using, but rather, your actions!
Your mouse did not click buy or sell on its own and your broker slipping you a pip or two here and there is not the reason you’re losing money.
In my nearly 15 years of trading, traders never blow up because they followed their trading plan perfectly, they blow up from the emotional response that typically follows a losing trade (over-trading, over-leveraging, revenge trades, etc).
The example day I’ve illustrated below illustrates what this might look like.
Trade #1 – You get your coffee, you read over your trading plan (having taught forex for close to a decade, 90% of traders don’t even have a written trading plan but that’s another rant for another day), and then you place a trade.
The trade goes your direction, hitting your take profit according to plan.
Trade #2 – You’re riding high from the first trade, and you spot another trade that perfectly matches your trading plan. You place the trade but instead of producing another tidy profit, it stops you out by 2 pips only to turn around and start heading in the expected direction! ERRRR!!
Can you feel your blood pressure rising? It’s at this very point that 95% of traders do a version of the following, once and for all illustrating that until you get YOU under control, the strategy you trade will NOT MATTER!
Trade #3 – This is where the train goes off the track and you chase the second trade, taking another entry on the trade that just stopped you out, but doing so with DOUBLE the position size to “make it back” faster.
Thee ol’ double down lol.
The market quickly pulls against you 5 pips so you flip and reverse again, only this time quadrupling down. Does this sound familiar?
Maybe you prefer the over-trade, the boredom trade, revenge trading, over-leveraging, not following your plan, trading without a plan, etc.
No matter what strategy a trader uses, they will continue to lose until they fix these mental errors and lack of dicipline.
My Wake Up Call...
A few years into my trading career I was still losing money. One day in particular stands out.
It was a Sunday afternoon and the market had just opened.
The week before I thought I had found the Holy Grail of trading strategies as I had turned a 2K account into over 15K!
Unfortunately, I hadn’t quite figured out that even a blind squirrel can find a nut every now and then, and likewise, even a losing trader can put together a few good days or weeks of trading.
That following Sunday when the market opened, I proceeded to not only lose the 13K I had made the week prior (All in about 4 hours mind you. This was back when FXCM had a micro account and allowed 400 to 1 leverage…the good ol’ days!), but I lost most of the 2K I had started with!
I had a problem, and regardless of the strategy I used, I kept making the same mistakes.
I could go through periods of time where I followed my plan, but after the first loss or two, the train would come off the tracks.
I felt like I literally couldn’t stop myself from trying to ‘make back’ the money that I felt the market had taken from me.
This inevitably led to me flipping the position back and forth (because I was pissed), and doing so with double the size, then triple, quadruple!
After enough pain and loss I would inevitably start searching for a new trading strategy because, after all, it couldn’t have been my fault…
After this loss though, something changed. I realized I was looking at the market like a big casino and hoping for profit. I knew something had to change if I wanted to change my results which leads us to the first step towards improving your trading by eliminating your 3 biggest mistakes.
Pro Tip #1 ~ Eliminate Your 3 Biggest Mistakes
To this point we’ve discussed the 20TC and likely you’ve identified some major obstacle to becoming a profitable trader that you might not have noticed before. In the last half of this article we’re now going to break down some precise steps you can use to improve your trading results and eliminate those errors.
Years ago I watched the movie series titled, ‘Floored.’ It was about a bunch of floor traders who told their stories of the ‘hay days of yesteryear’ in the pits. You can watch it free on Youtube if you haven’t had a chance.
There was a quote in that series that always stuck with me. They were interviewing a guy who had retired and he was speaking about why he had done so well while others failed around him, and he pointed to one thing.
He said, ‘The numbers for successful guys are fleeting, because you’re only as good as your last trade, its what you don’t lose….there have been guys who made more money than me, but for some reason or another they’ve…it was taken away. I think the more successful trader is the guy who can keep it to the 9th, 10th race. Good traders know when to make money and leave.’
He then goes on to say less than a minute later, ‘it’s not what you make, it’s what you don’t lose.’ That profound statement has ALWAYS stuck with me to this day, and I would encourage you to take it to heart as well.
If you have an hour, scroll to the beginning and enjoy!
FLOORED The Complete Documentary Film - YouTube
If you’re going to eliminate the most costly mistakes you’re making then you need to go back and do some analysis.
This is where the trading record we discussed earlier comes into play.
Often the mistakes you find will be very closely related. If you have more than 3 it’s not a problem, just pick the largest most costly problems and come back for the rest once you get these under control. Things like revenge trading, boredom trading, over-leveraging, etc.
There is a certain power to writing a problem down. Something about writing it down allows you to finally face the issue head on, and more importantly it gives you a chance to fix it and improve.
Below I’m going to give an example of what this might look like for 1 common problem.
Problem #1 – Revenge Trading
Solution #1 – Leave the computer until the next day
Solution #2 – Back-testing with Forex Tester
Solution #3 – Review my compounding chart, goals, and/or Trading Plan (most important)
There is no such thing as an easy solution to the psychological side of trading. No one likes losing money, and we all feel smarter than we really are after a win. Trying to get rid of the emotion is stupid and a waste of time. Are goal is not to get rid of the anger that caused you to revenge trade as this is just a natural response. Will it weaken and get easier to control with time, yes.
That said, your goal should not be to control the emotion, but rather the actions the result because of the emotion. To begin with you might literally have to shut down the computer and walk away as nothing else will deter you from continuing to over-trade. Over time, though, a simple review of a compounding chart might be enough to get you focused and back on track.
Pro Tip #2 ~ Stop Trying to 'Get Rich Quick!'
There is no such thing as getting rich QUICK in trading. I’ve been trading for nearly 15 years and every wealthy trader I know built his or her account over multiple years.
I know that the vast majority of educators promise huge returns, but its a flat out lie. The ugly truth is that most of these educators need your subscription money to live and they say whatever they know people want to hear.
On the other hand I do not need your money to live and would rather tell the truth, novel concept, I know.
There are really only two major components to growing your account; Time & Consistency
With even small consistent profits over the course of time, you allow compounding to work its magic. There is a reason Albert Eintsein called compound interest the 8th wonder of the world, it’s powerful!!
You don’t have to have huge gains to grow an account but you do need consistency over time to allow the magic of compounding to do its job.
Let me illustrate this point:
Assume someone is trading a 10K account and they grow that account by 10% a month.
At the end of 3 years that 10K would have grown to over 300K, and just under a million after 4 years.
10K Starting Balance Compounded at 10% P/Month
I think it goes without saying that this is just a hypothetical illustration to show the power of compounding. I would encourage you to do the math on your own with a pen and paper.
Write a reasonable starting balance at the top of the page and then compound it by a figure that is reasonable to you. Do so over the course of 2, 3, or more years, writing out the balance for each MONTH so you can see the growth over time.
This exercise immediately shifts your focus from the short-term, to a longer-term perspective that, in my opinion, is not only beneficial for trading, but required!
If growing an account over 2, 3, or more years seems like a long time to you then you know 1 thing is certain, you will continue to lose money until you change your mindset.
I’m always baffled by this…
Most people get excited and call it a great career choice to go to college for 4 years, and come out with 30K, 50K, or more in debt!!
Were talking about the exact same time horizon for both choices, but one path leaves you with debt and the prospect of a mediocre job you’ll likely hate. The other leaves you with no debt, and unlimited income potential.
Many of you are probably thinking that there is no guarantee of success, and I wish EVERYONE thought that. You’re right, there is no guarantee of success.
Let me ask you this though, is there a guarantee of a good job if you have a degree? This isn’t the 90’s, and the massive number of under and unemployed graduates would likely disagree with anyone who thinks there is!
Start treating your trading like a business and look at the long-term growth, not short-term swings. There is no exception to this rule, as fast/huge gains in trading will result, sooner or later in a massively spectacular blowup and I speak from experience.
Forex Bank Trading Strategy Explained (Updated 2018)
Who is Smart Money?
What is the Forex Bank Trading Strategy?
Why is Tracking ‘Smart Money’ Critical to Successful Trading
Step 1: Accumulation
Step 2: Manipulation
Step 3: Distribution/Market Trend
Who is ‘Smart Money?’
Throughout this article, you will read the term ‘smart money.’ I use this term to define the largest market participants; those who move massive volume so large that their position cannot be opened and closed in a single order without spiking the market.
This includes the largest banks, prop firms, massive global companies, insurance companies, Hedge Funds, as well as speculative traders in every variety from around the globe.
It is important to understand that although the banks might control the majority of the daily volume, the VAST majority of that volume is those banks acting as a market maker for the other types of traders mentioned above.
Yes, banks do take speculative positions, but the vast majority of the volume they transact on a daily basis is for the purpose of market making, not speculation.
This is critical information, as it tells us 1 very important clue. If banks are primarily market makers then they will by default drive the market to and from areas of supply and demand which is the foundation in how we track them.
What is the Forex Bank Trading Strategy?
Definition: The Forex Bank Trading Strategy is a trading setup designed to identify where large market participants are likely to enter or exit their position based on likely areas of supply and demand, or manipulation points as we term them.
As you can see in the chart above, the top 10 banks control well over 60% of the daily forex market volume.
What if you could determine where they were likely buying or selling?
Do you think this information would be profitable?
Tracking smart money is at the very foundation of the bank day trading strategy. If we can consistently reveal where the smart money is entering, and the direction they are trading, then we have all the information we need to make a profitable trading decision.
We must remember that this is the banks market, and not ours! Retail traders are figurative flies on the wall. Keeping that in mind, why then do most retail forex traders out there attempt to invent or learn forex trading strategies that have been created to try and fit a market we do not control?
It is our strong conviction at Day Trading Forex Live that success in the forex market is only possible when we stop trying to fit different rules to a market we don’t control, but rather learn the trading strategy of the banks! This is their business, and they have a business model (aka forex trading strategy) that we must learn to follow to achieve consistent results!
We do this through the repeatable 3 step process described below. If we learn to trade forex by following their model we will have a much greater chance of success; after all the banks are the ones moving the market!
3 Steps To Success
In any market, there must be a counterparty to every transaction. If you are looking to buy the market someone must be willing to sell to you. Conversely, if you are looking to sell then someone needs to be willing to buy your current position from you.
Knowing that, how can we use this information to track where the smart money is likely to be buying or selling?
If Bank XYZ desires to buy a large position in the EUR/USD, using the principal discussed above they must find an equal amount of selling pressure. As their positions are so large, they are always entered over time so as to not reveal their hand. This leads us to the first step in the process, accumulation of a position.
Step #1 – Accumulation: As discussed above there is a counterparty to every transaction in any market including the forex market. Therefore when a bank or group of banks has the desire to enter a position they must do so by accumulating it over time. Unlike you and I, because of the sheer volume banks push they must enter positions during times most people would term as consolidation or range bound markets.
These periods of consolidation are what we call accumulation as they are areas where smart money enters or ‘accumulates’ their desired position over time.
By doing this through a tight range bound period, banks are able to not only keep what they are accumulating secret to the rest of the market, but they are also able to get a much better average entry.
This is the foundation of how the banks enter positions over time.
Money is made by accumulating a long position they will later sell off at a higher price, or accumulating a short position they will later cover at a lower price.
Our single goal should be to track when the banks are entering the market and what position they are entering. As discussed above banks are the ones moving this market, and therefore if you can identify the position they are accumulating, then you can identify which direction the market will move next with a high degree of accuracy. What comes after this period of accumulation?
Step #2 -Manipulation: Over the last decade of educating traders I’ve heard many forex traders say that it feels as if they are entering the market at exactly the wrong time. Many traders feel as if the market is just waiting for them to enter before it instantly turns the opposite direction. Not only is that true, but this crucial step we term as ‘market manipulation’ is critical to tracking banking activity in the forex market.
The first point I want to mention is that we use the term ‘market manipulation’ but you could just as accurately be described as a searching for liquidity, a trapping move, stop hunt, etc. Regardless of the cause, the manipulation or ‘false push’ that comes at the end of the accumulation phase, is the most important factor in tracking smart money.
A stop run or false push beyond the high of an accumulation period likely means that smart money has been SELLING into the market, and a short-term trend in that direction is likely to start.
A stop run or false push beyond the low of an accumulation period likely means that smart money has been BUYING into the market, and a short-term trend in that direction is likely to start.
Because the mega-banks positions are so large they must essentially create their own market and induce buying pressure they can sell into or selling pressure they can buy into. How is this short-term manipulation carried out?
Reactive Vs. Predictive Trading Strategies
It starts by understanding that virtually all retail trading strategies are ‘reactive’ in nature. This means that as the market rises the strategies, software, or EA will begin to produce buy signals/trades, and a falling market will produce sell signals.
I term these as reactive trading strategies as they ‘react’ to the market rather than predict based on what smart money is doing. Therefore, a rising market will induce buying pressure and a falling market will induce selling pressure.
Do you see how easily smart money could consistently induce large portions of the retail market into buying right before a large drop and selling right before the huge rally?
If the strategies you are trading are reactive (which they all are), then smart money knows how to get you to buy, and they know how to get you to sell. This is precisely why traders so often say they feel like the market “turns against them as soon as they enter.”
The unfortunate part about this is the fact that this information is actually the most powerful thing the banks give us, but only if we open our eyes to it. The short-term manipulation of price tells us what position they have likely been accumulating, and thus, the direction they intend to drive the price.
I urge you to look back at all large market moves. Before the vast majority of large moves, you will see a tight range bound period (accumulation) followed by a false push (manipulation) in the opposite direction of the trend.
Step #3 – Distribution/Market Trend: After they have accumulated a position through a standard tight ranging market, banks will often create a false push we term as market manipulation. This false push is an extension of the accumulation period as it allows them to finish entering the rest of the position they had been through the previous range.
This as we just discussed is the reason so many forex traders enter the market at exactly the wrong time. If however, we know the tricks they use, we can avoid being a pawn of the bank’s manipulation, and instead profit from it!
If we have correctly identified which direction they have manipulated the market we can then understand which direction they intend to push the price. This is called the distribution phase of the market and is seen visually as a market trend.
Again this market trend comes only after the banks have finished accumulating their position, often seen as tight range-bound price action ending in a false push/stop hunt/search for liquidity.
Hands down this is the easiest area for us to profit from but only if we can properly identify the first 2 steps in the process. Throughout this article, I have marked out this 3 step process on a series of charts. New concepts can be hard to understand with only words and therefore I believe the charts should serve you well in the learning process. As you examine these charts you should be identifying the 3 stages of the bank day trading strategy.
Putting Forex In Perspective
No doubt this strategy is very different from anything you have been using. Realizing the chart is a false manipulation of prices and learning to read the intention behind the moves will take practice.
Anything in life that is new takes time to learn and this will be no exception.
If you are using a forex trading strategy used by the masses I strongly urge you to give some serious thought as to why you feel the outcome will be different for you?
At some point, we all need to realize that maybe it’s not the tens of thousands of retail forex traders that are failing, but maybe it’s the strategies that are flawed, as they don’t factor in the largest market participant, smart money!
What do you do next?
The first thing I would recommend is evaluating your trading strategy to determine whether it is reactive or predictive.
If the trading strategy you’re using is predictive, then stick with it for at least 6 months to determine if it the right strategy for you.
If you find that like most (95% or more) your strategy is reactive, then you need to move on to something else if you ever want a chance of becoming a successful forex trader.
For those looking to learn to trade the official forex bank trading strategy of Day Trading Forex Live then I would recommend the actual Bank Trading Course.