Today, I’ll show you how you could’ve made $1,900 in less than six days on just one trade.
This isn’t a hypothetical example…
On October 5, Jeff Clark Alliance members received my trade alert. And by October 11, we had exited the position for a nice gain.
The trade was on the U.S. dollar (USD) and Canadian dollar (CAD) currency pair. Forex traders refer to this currency pair as USD/CAD.
I’ll show you how I first identified the trade and then how I managed the position once the trade went live.
But before I get to that, I want to explain the fundamental concept behind my trading strategy…
The market has two phases of behavior: the trending phase and the corrective phase.
When a market is trending, the moves are strong and it makes new highs or lows with ease.
But once the trending phase is over, the market enters the corrective phase. This is when the market pulls back and retraces a percentage of the prior trending movement.
An important distinction between these two phases of market behavior is that a corrective phase will not make new highs or lows.
Let’s look at an example below on the U.S. dollar index price chart…
The blue arrows represent the trending phases of the market, while the red arrows represent the corrective phases.
Notice how every time a corrective phase came to an end, the market ran higher. Those are the trending phases I aim to catch whenever I make a trade.
Now let’s look at the USD/CAD trade I mentioned earlier…
The first blue arrow is the strong trending movement I was tracking in the currency pair. The red arrow is the ensuing corrective sequence.
When I sent out the trade alert, I was positioning subscribers for the next trending sequence (the second blue arrow).
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You’ll notice I didn’t end up picking the very bottom of the red corrective sequence for our entry point.
Over my 14 years of experience, I’ve found that trying to perfectly time the market usually doesn’t end well. Sometimes we’ll get lucky and pick the exact top or bottom in a market.
But as you can see, exact timing doesn’t matter too much. The net result was an incredibly profitable trade that took just a few days to play out.
The bottom line is that as a trader, my job is to make the cash register ring and bring in some money.
But my technical strategy is just half the story. My 3-step risk management strategy is just as important.
Without risk management, a trader has no hope of pulling in consistent profits. Risk management is how we monetize our analysis of the market.
Tomorrow, I’ll discuss the three steps to my risk management strategy and show how I applied it to great effect on this USD/CAD trade.
It’s very simple and you should be able to apply the exact same concept to your own trading right away.
Imre Gams
Analyst, Market Minute
Reader Mailbag
In today’s mailbag, a Jeff Clark Alliance member shares his experience with Imre’s forex trade…
The first beta forex trade from analyst Imre Gams was well communicated. The continued communication to raise/lower the stop losses – to reduce risks, eliminate risks, and protect profits – was well documented.
It made it straightforward to work with my broker to show me how to place this trade in my account.
– Nicholas M.
And a Jeff Clark Trader member shares his perspective on Jeff’s latest bitcoin option trade…
I believe the probabilities are greater that bitcoin takes a dive from here. Not just from looking at the chart action alone… but also when considering the macro cycle with liquidity drying up, profit growth slowing on an accelerating basis (aka recession), inflation (while most likely having peaked) remaining sticky, the Fed’s commitment to tighten for the foreseeable future, and hedge funds planning to liquidate risk assets during Q4. I thought to share my perspective with you.
– Mario M.
Thank you, as always, for your thoughtful comments. We look forward to reading them every day. Keep them coming – and send us any questions – [email protected].