False setups & protecting against the head fakes

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False Setups Protecting Against the Head Fakes

• The Forex secret

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False Setups

• Trading comes down to who can realize profits
  from their edge in the market.
• While it is easy to scroll through charts and
  see all the winners, the market is one big cat
  and mouse game.
• Between the quants and smart money, the false
  setups are everywhere.
• As a price action trader, you cannot rely on
  other off-chart indicators to provide you clues
  that a formation is false.

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False Setups

• Just to be clear, the chart formation is always
  your first signal, but if the charts are unclear,
  time is always the deciding factor.
• I did a study of all my winning trades and over
  85 of them paid in full within 5 minutes.

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How to Protect Against the Head Fakes

• There are many ways you can protect yourself
  against head fakes.
• For starters, do not go hog wild with your
  capital in one position.

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Protecting Against the Head Fakes

• Make sure you leave yourself enough cushion, so
  you do not get antsy with every bar that prints.
• Also, let time play to your favor. I know there
  is an urge in this business to act quickly.
• However, there is some merit in seeing how a
  stock will trade after hitting a key support or
  resistance level for a few minutes.

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Where to Place Your Stops

• One thing to consider is placing your stop above
  or below key levels.
• Since you are using price as your means to
  measure the market, these levels are easy to
  identify.
• Now one easy way to do this as mentioned
  previously in this article is to use swing
  points.
• A more advanced method is to use daily pivot
  points.

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Thank you

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