This document discusses the key components of becoming a consistently profitable forex trader. It states that only 10% of traders are profitable because they have a proven trading system with clear entry and exit rules that provides a statistical edge over time. It emphasizes the importance of having a trading system, knowing when and what strategies to trade based on market conditions, using proper position sizing with consistent risk levels per trade, and developing the discipline and psychological mastery to follow the system. The document provides examples of day trading strategies like bull flag surfing and outlines how a trader can aim for monthly returns of 10-16% with a 50-60% average win rate by making 20 trades per month with a risk of 2% per trade and potential
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1. High Probability Forex Trading
The Key to Achieving Consistent Profitability
By Adam Khoo
www.piranhaprofits.com
2.
3. 10%
30%
60%
1) TRADING
SYSTEM
What Makes A Profitable Forex Trader?
• Trading System with a Positive Profit Expectancy
• Specific set of entry and exit rules based on a sound
methodology that gives a statistical edge
• Average wins > Average Losses
• Over a large sample of trades, will always be profitable
• 90% of traders do not have a trading system!
• Losing traders trade based on listening to opinions,
emotions, making predictions, ‘luck' etc…
• In the long run, will always lose money
• The 10% of Traders Use a Proven Trading System… These
Are the Profitable Traders
16. Day Trading Strategy
Bull Flag Surfing (Long Trade)
Entry Buy stop 84.09
Stop Loss 84.01
Take Profit 84.25
1R = 8 pips
2R = 16 pips
Entry Rules
• Currency Strength Aligned
• Moving Averages Aligned Up
• Candles are ‘surfing’ EMA
• After Strong Impulse, Corrective candles making lower highs
• Buy Stop Order above high of last corrective candle
Exit Rules
• Stop loss just below candle
• Entry to Stop Loss = 1R Distance
• Take profit at 2R above entry
17. 10%
30%
60%
TRADING
SYSTEM
POSITION
SIZING
• How many lots to trade long/short
• Consistent Small (1%-3%) Risk
per trade
• Never adjust size based on
‘feelings’
• Preserve capital in the event of
losing streaks (inevitable)
What Makes A Profitable Trader?
18. Position Sizing
• Risk a fixed percentage % of your capital for every trade (i.e. 1%-3%)
• Example: Risk per trade = 1R = 1%
19. Bull Flag Surf Long Trade
Entry Buy stop 84.09
Stop Loss 84.01
Take Profit 84.25
1R = 8 pips
2R = 16 pips
Capital $3,000
Risk per trade R = 2%
No. of Lots =. $3,000 x 2% = 0.75 lots
8 pips x $10
Winning trade = $3,000 x 4% = $120
Losing trade = $3,000 x 2% = $60
No. of Lots = Capital x %Risk Per Trade
Stop loss Distance x $Value-per-pip
20. Profitable and Powerful
Trading Business Plan
Entry price
Profit Target
Stop Loss
Risk:
1%-3% of capital
Potential return:
1.5%-4.5% of Capital
50%-60%
Probability
40%-50%
Probability
1R
1.5R
To 2R
21. 20 trades a month
12 wins 8 losses
60% average win rate
12 x 3% = 36 % 8 x (-2%) = -16%
+16% Return Per Month
Risk per trade = 2%
Potential Profit = 3%
22. 20 trades a month
11 wins 9 losses
55% average win rate
11 x 3% = 33 % 9 x (-2%) = -18%
+15% Return Per Month
Risk per trade = 2%
Potential Profit = 3%
23. 20 trades a month
10 wins 10 losses
50% average win rate
10 x 3% = 30% 10 x (-2%) = -20%
+10% Return Per Month
Risk per trade = 2%
Potential Profit = 3%
25. 10%
30%
60%
PSYCHOLOGY
TRADING
SYSTEM
POSITION
SIZING
What Makes A Successful Trader?
• Discipline to follow the Trading System consistently
(no deviation)
• Takes Psychological/Emotional Mastery
• Reason why many people learn trading systems but
unable to replicate the profits of the winning trader
26. Trading is the only Skill that
Can Guarantee You An Income
for the Rest of Your Life
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