So I’m a big fan of Navin over at UrbanForex, he’s an amazing trader and I highly recommend his challenge on YouTube. Today I’m reviewing his video titled “Pro Trading Strategy.” Below is my review of this video.
Table of Contents
The Strategy Itself
So if you don’t want to watch a 2 hour video (I recommend you do) but if you don’t then this is what’s happening in this video. His first slide is a recap of what you should be looking for in the markets. Remember that forex is an investment and not a job replacement. You should stick to higher time frames to avoid getting stopped out by the markets. Trust your analysis, trust your process. And remember to look at other currency pairs to get a birds eye view of the market.
We are looking for exhaustion candles. All this means is we want to find where the market has exhausted a certain push in that direction. Exhaustion candles simply tell you the market is getting ready to go in the opposite direction. Remember this should be on the hourly chart and nothing less than that as there is too much noise in the smaller time frame candles.
So once you know how to find Exhaustion candles you can move onto the next stage. These candles are also called hammer or pinbar candles too. However, it’s important to know that candlestick patterns on their own are useless so bear this in mind when looking for patterns.
The next stage Navin talks about is pivot points, this is something I personally don’t use in my everyday trading so I was interested to see where he went with this. For anyone who doesn’t know Pivot points are simple the average of the move for a DAY. So for example the graph below shows the screenshot from Nived’s video, the dotted lines are the day breaks and the horizontal lines are the pivot points.
So as you can from the screenshot there are 3 day pivot points. Navin recommends having 3 day pivot points on your chart (the 1 hour chart remember.) He also recommends looking for the exhaustion candles that hover around your pivot points. For example on the 20th October @ 10.00 we can see the candle hits a pivot point closes above it with a very long tail which indicates exhaustion in the market and hence we enter the position at 10 or 11 after the close of the candle.
Stop losses should go…. (Everyone say it) BELOW PREVIOUS STRUCTURE. Also Navin recommends putting the stop losses below previous day (or 2 days previous) pivot lines. It’s a very simple stop loss. Take profits would be (again) based on structure and pivot lines. Target one would be at previous pivot line of the day before, this is what Navin calls the guaranteed profit zone. I like that term. So if we look at where we would have entered the market and where our target ones would be, it’s about a 1:1 risk reward which is good enough!
Another example is below, we’ve added the risk vs reward too. Remember we want a candle that closes above the pivot points.
Another example below including our guaranteed profit zone in the blue. This strategy is very effective on the one hour candles. Very effective.
Train Yourself To See
After these examples Navin continues to show us more and more examples of how well this theory works. Of course no strategy is ever going to be 100%, but this is a high risk to reward trading strategy THAT ALSO has an over 50% hit rate. That means this is one of the few trading strategies that can actually compound your bankroll. But the strategy gets more evolved. Navin talks about the pairs that act the same as one another and ones that act in an opposite way. For example the following:
All of those currency pairs go the same direction as each other. There are some that go in the opposite direction, e.g.:
Navin recommends trading these pairs at the same time. So for example as EUR/USD reveals an exhaustion candle at a pivot point, let’s assume a buy order so we think the market will go up. If this is the case then the GBP/USD is going to do the same. So we can also look for an exhaustion candle at or near the pivot points on this pair. If this is the case we can enter 2 trades with the exact same analysis and profit twice without using incorrect bankroll management. He also goes on to talk about how you can profit from buying all pairs that relate to each other (and selling the ones that are opposite.) That means when correct you can earn 6 times as much as simply trading on one pair specifically. You can also pick up the Pivot point indicator from: https://www.urbanforex.com/blog/installing-the-pivot-points-indicator-on-mt4
Harmonic Method for Stop Losses
The strategy on itself is a very powerful one but Navin recommends trailing stop losses at the same speed that the market moves. This assumes that the market moves in the same direction as you predicted. But do not use an automatic trailing stop, you should be manually moving your stops but remember never increase your stop losses.
Conclusion + Current Notes
Enter the market based on an exhaustion candle with a large tail AT a pivot point. Go with this move until the next pivot point (looking back 3 days only, not less and not more.) These are your first targets, if a newbie trader take full position out here for guaranteed profit, if more experienced you can look into the harmonic method for stop losses.
Annoyingly this strategy does not work as well as it used to anymore. But saying that it does still give you a great profit so if you are a beginner I would recommend reading our full intro to fx here and then implementing this strategy when you know a bit more.