🎯 Trade of the Week | Recovering From 2 Losses — Trade Breakdown

Hello everyone, it’s Dale here. In this video, I’d like to talk about two losing trades that I took on Monday. You know, trading is not just about winning, but also about losing and managing your losing trades. That’s why I want to talk about this in today’s video. The two trades I want to talk about are based on predictions that I sent out on Monday in a video you can find on YouTube or in your email. Those predictions were on two trading levels: a short on EUR/USD and a short on GBP/USD. Both of those predictions turned out to be wrong. The levels were losing trades. Right now, I want to show you how I went about trading this and how I recovered from those two losses. Let’s take a look at it.

What you see here is an EUR/USD chart. It is a 30-minute chart of EUR/USD, and the platform you see on the screen is NinjaTrader 8 with my custom-made Volume Profile and VWAP indicators. This blue line here is the level that I was trading. It was a short, and the reason behind this level was based on Volume Profile. I identified this heavy volume zone within this trend area, and I was trading short from the beginning of that heavy volume zone. So the short was from here. Initially, I gained a couple of pips, but it was not enough. I was aiming for a lot more, and then the price turned and I took a stop. My stop was here. So that was the first losing trade. There was really nothing to do about this. There was strong buying activity, and the price just went past the level with no reaction at all. That was the first loser.

At the same time, I was also shorting GBP/USD. Let me show you that these two trades were unfortunately correlated. They both ended up as losing trades because the dollar was weakening. This is the 30-minute chart of GBP/USD, and the trade was based on this strong rejection of higher prices and this significant volume cluster that formed within that rejection. I was trading from the beginning of that volume cluster, and as you can see, the price just blew past that level. So I took a quick stop loss, along with a stop loss on EUR/USD. This happened at the same time. This move here on GBP/USD and this move on EUR/USD happened at the same time. Let me go back to GBP/USD.

I knew about the correlation between these two trades, between EUR/USD and GBP/USD. I also knew that my exposure to risk was bigger because I was in two trades at the same time, but I took the trades anyway. I took two stop losses, and that was it. Two losses. That was on Monday. The thing I want to teach you today is how to recover after taking a bad trade, or bad trades like these. What you want to do is take a trade that I call a reversal trade. That means you trade the same level as before, only from the opposite direction.

If you look at GBP/USD here, this was the short. The price went past it, and after I took the stop, I placed a limit order here, but it was a limit buy. I was waiting for the price to reach this place again, and when the price reached this level, I went long. The reason is that Volume Profile levels, if the price doesn’t respect them, don’t mean they were wrong or weak levels. Usually, it just shows that the other side of the market is stronger. In this case, buyers were stronger. They pushed through with no reaction at all. That told me I should join the buyers. Very often, they give you a chance to return back to the level, hit it again from the other side, and give you an opportunity to enter a reversal trade, meaning a long from here. That’s exactly what I did. I entered long from here, and that’s how I recovered from the loss. That’s what I did on GBP/USD, a reversal trade.

I did the same thing on EUR/USD. Let me go to EUR/USD again. Here is the short level. The price went past it. It’s important that there is no reaction, or only a very small reaction, to the level. If the price just shoots past the level with no reaction or only a small reaction, then you want to take the reversal from the same level. When I took the stop on EUR/USD, I placed a limit buy here and waited for the price to reach this level. When it did, I took the trade, went long, and got my money back.

This is how I recovered from those two losses. At the bottom of the screen, you should see a screenshot from my trading platform. It’s cTrader, where you can see exactly how I was entering those positions. This is the standard way I trade and how I recover from trades like these. You would be surprised how often the market reacts to the same level from the other side, like in these two examples. I call these reversal trades. I’ve been trading like this for many years now, and most of the time, when the market just shoots past my level, I’m able to recover from the loss by taking the reversal.

I hope you found this useful. If you want to join me and trade alongside me every day, and get access to my custom-made indicators, head over to my website at trader-dale.com. If you click the button that says “Trading Course and Tools” it will take you to a page where you can browse my trading education and custom-made indicators. You can get them separately there, or scroll down a bit to find a special bundle where you can get all the packs together in one heavily discounted bundle. That’s about it. I hope you liked the video, and I’ll be looking forward to seeing you next time. Until then, happy trading.