Summary
Highlights
Most traders fail because they enter trades at market highs, where they are either stopped out by minor pullbacks or take on excessive risk with wide stop-losses. The key to consistency is avoiding FOMO and waiting for a pull-back to enter.
The pullback strategy improves risk-to-reward ratios significantly. Entering a trade at a lower price point allows for a tighter stop-loss and a larger potential take-profit, ensuring smaller losses when wrong and bigger gains when right.
A trend change is only valid when a candle closes beyond the last significant high or low. Wicking through a point without a full candle close is considered a trap and should be ignored.
To trade effectively, identify supply and demand zones created by sharp, impulsive price moves. A zone is defined by the candle that initiated the sharp breakout or breakdown. Use these zones as the entry point for your trades.
Once price enters a supply or demand zone, set a stop-loss just outside the zone and a take-profit at the previous market peak. This systematic approach, illustrated with a real-life Nvidia trade example resulting in a 10:1 risk-to-reward ratio, forms the edge needed for long-term profitability.