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05/01/2025

he Previous Day High and Low Strategy is a popular method used by forex traders to identify potential entry and exit points based on the highs and lows established during the previous trading day. This strategy works on the principle that the market often respects previous levels of support and resistance, and price may break above or below these levels, signaling potential trades.

Here’s how you can use the Previous Day High and Low Strategy effectively:

1. Identify the Previous Day's High and Low
The first step is to mark the high and low prices from the previous trading day. These are key levels to monitor, as they can act as support and resistance for the current trading session.
In some cases, this strategy may apply to different timeframes (e.g., 4-hour or daily charts), but generally, you'll work with the previous 24-hour high and low for standard forex pairs.
2. Set Up Your Chart
Use a daily chart for identifying the previous day's high and low.
Mark the high and low with horizontal lines or support/resistance zones.
Look for any notable price action patterns or indicators (e.g., candlestick formations, moving averages, RSI) near these levels.
3. Price Breakout Strategy
The core idea is to enter a trade when the price breaks the previous day’s high or low, expecting the price to continue in the direction of the breakout.

Break above the previous day's high:
If the current price breaks above the previous day’s high, this can signal a bullish trend. Enter a long (buy) position.
Consider adding confirmation with indicators like the RSI (overbought/oversold levels), MACD, or a trend-following system to validate the breakout.
Break below the previous day's low:
If the current price breaks below the previous day's low, this can signal a bearish trend. Enter a short (sell) position.
Again, confirmation from other indicators is crucial to avoid false breakouts.
4. Entry Triggers
Breakout Entry: Once price breaks the previous day’s high or low, you may place your order as soon as the breakout occurs.
Retest Entry: Wait for the price to break the high or low, and then retrace back toward that level (the previous day's high/low). A successful retest can provide a more favorable entry with a tighter stop loss.
5. Stop Loss and Take Profit
Stop Loss: Place your stop loss just below the previous day's low if you're buying (for a breakout above) or just above the previous day's high if you're selling (for a breakout below). Alternatively, use a fixed number of pips based on the volatility of the pair.

Take Profit: You can set your take profit target based on risk-reward ratios. A common approach is a 1:2 or 1:3 risk-to-reward ratio, meaning if you risk 20 pips, aim for at least 40 or 60 pips in profit.

If you’re using a more advanced strategy, such as trailing stops, you could trail your stop as the price moves in your favor, adjusting the stop loss to lock in profits while still giving the trade room to breathe.

6. False Breakouts (Fakeouts)
One of the risks with this strategy is false breakouts, where price briefly breaches the previous day's high or low but then reverses. To manage this:

Confirmation: Wait for confirmation that the breakout is genuine. This can come from indicators (like RSI or MACD) or a strong candle close above or below the previous high/low.
Time-Based Filters: Consider waiting for the breakout to occur after the first few hours of the trading session, when market sentiment may have solidified.
Volume: Higher volume during a breakout can often confirm the strength of the move.
7. Time of Day
London and New York Sessions: These are typically the most active forex trading hours. It's generally recommended to execute breakouts during these times for higher liquidity and better chances of success.
Avoid trading during periods of low volatility (Asian session) unless you're using a scalping strategy on lower timeframes.
8. Additional Tips
Support/Resistance Confluence: If the previous day's high or low coincides with a major support or resistance level (e.g., from a longer timeframe), the breakout may have a higher probability of success.
Economic News: Be mindful of important economic data releases or central bank announcements. These can cause significant price movement that may invalidate previous day’s levels.
Indicators for Confirmation: Indicators like RSI (for overbought or oversold conditions) or MACD (for momentum) can help filter out weak breakouts and reduce the likelihood of false signals.
Risk Management: Always maintain a solid risk management plan. Limit the percentage of your trading capital on each trade and use stop losses.
Example of a Trade
Previous Day High/Low:

Previous day’s high = 1.2000
Previous day’s low = 1.1900
Breakout Setup:

If price breaks above 1.2000, look for a long entry.
If price breaks below 1.1900, look for a short entry.
Entry and Exit:

Enter the trade when price breaks the level.
Place the stop loss just below/above the previous day’s low/high (e.g., 1.1890 for a buy trade).
Set the take profit based on your risk-to-reward ratio (e.g., 1.2100 for a buy, aiming for 100 pips).
Final Thought
The Previous Day High and Low strategy is relatively simple but can be highly effective, especially when combined with other technical analysis tools and proper risk management. Practice this strategy in demo accounts first to get comfortable with its nuances and adapt it to your trading style.

16/02/2024

How do you set up risk management policy for forex trading?
if anyone wants to know about the secret of forex trading, then I must say that there is no matter which market you are trading like forex or stock everywhere you need to learn the market, you can not earn money without learning. If you will learn better then you will earn the best.
Before trading in the forex market everyone should calculate their risk and reward ratio, if your risk and reward ratio is favorable then you can make money in the forex trading. you don't need accuracies like 80% or 90% if you are doing proper money management then you can win the forex market with a 50% success ratio.
There is no pre-decided secret of the forex market you have to create your secret for the forex market
what you need to create your secret for the forex trading
• gain maximum knowledge of the forex market
• learn everything about the technical analysis
• understand the chart pattern
• learn to draw the trendline
• use 3 indicators at a time (MACD, William Alligator, EMA 21 or 50 days)
• learn price action
if you follow the above mention thing then you can create your secret, one more thing this all things will help you to get 50% result remaining 50% results are depending on your money management if you will trade with good risk reward ratio then you can achieve remaining 50% also
if you like my post then please upvote the answer

Risk Management is one of the most important part in Forex Trading.
I have studied Statistics of Financial Markets at the University and there are several instruments that you can use to optimize your risk in trading and investing. Most of them are studied for an investment portfolio, they are not ideal for Forex Trading, but there are some that can be a huge help to manage your risk even in Forex Trading.
In my Forex Courses on Udemy, I always have a section that is entirely dedicated to Risk Management because it is a fundamental part of any trading strategy. Here, I can’t report all of them, because we are talking about videos of 10 minutes each, but I can report one of them as an example: the Kelly Criterion.
Let’s assume that you have the perfect strategy: you win 100% of times. How much are you going to invest? Of course you are going to invest all the money you have, you are sure that you are going to win. Unfortunately such a condition doesn’t exist, you can’t win 100% of times.
So let’s assume now that you don’t always win, but that you win 80% of times. How much are you going to invest? 2%? Less than 2%? More than 2%?
Traders are afraid to invest too much or too little. They always try to find the perfect money management rules that allow them to understand what’s the best percentage of their account to invest. An answer to this eternal question is given by the Kelly Criterion.
Let’s analyze a very easy game before getting into Forex trading. I want to play a simple game just rolling a dice. The rules are:
• If it shows 1, 2, 3 or 4, you win $10
• If it shows 5 or 6, you lose $10
Does it look like a good opportunity to you? You have 4 chances out of 6 to win. Without doing any math calculation, you realize that it is a good opportunity, only by intuition.
From a mathematical point of you, to see if it is a good opportunity and how good it is, you need to calculate the Expected Value (EV):
EV = $10 x 0.67 – $10 x 0.33 = $3.40
0.67 is the probability to win. You have 4 chances out of 6, so 4/6 = 0.67.
0.33 is the probability to lose. You have 2 chances out of 6, so 2/6 = 0.33.
The EV is $3.40. This means that, in the long run, you should win $3.40 per every time I roll the dice. So after 100 times, you should be winning $340.
Now we know, from a mathematical point of view, that this is a good opportunity, the odds are in your favor. How much are you going to bet on it?
Let’s say that you think that it is almost impossible that you can lose more than 4 times in a row, so you want to bet 25% of your account.
I have built an excel file with a function that gives casual numbers from 1 to 6. Let’s see how it goes.

11/03/2023