Today marks the start of my new challenge. I want to achieve at least 40 winning trades out of 100.

For my earlier readers, you may have noticed that this blog has mostly been me sharing my ideas and trying to “figure it out.” Along the way, I discovered what I call “the trap.”

The trap is the market giving a convincing signal for either a short or a long trade, only to immediately stop out those who took these setups.

I began to profit from these traps, often with short scalps of 4 to 5 ticks. But I quickly realized it wasn’t sustainable. Not because I couldn’t find the setups, but because my risk-reward ratio was off. A single failed trade would wipe out my gains, and for the method to work, I’d need over 70% winning trades. This wasn’t achievable for me.

Reviewing my trades, I noticed that many times price moved far in the direction I initially bought or sold. Often, the risk-reward was easily 2:1.

At 2:1 risk-reward, I’d only need to win around 33% of the time to break even. Anything above that would be profitable. So, 4 trades out of 10 profit versus my old method of 7 out of 10 (with more stress).

I wanted to see if my new, less stressful 2:1 method would work. And so we begin.

The Traps Keep On Happening – I’m Involved

My trading day started a little later than usual. I noticed that the price had been trending down and had now found an area of uncertainty.

I marked up the day, with a downtrend followed by what looked to be a new range beginning to form. If the range were true, there had been a bounce at the previous low. Price was beginning to pull back, but it felt like a trap.

You can see in the chart below how the price trapped those looking to go long too soon, and then also trapped those thinking it was about to reverse. After doing so, the price rallied up, filling my buy order before giving me the profit I was looking for.

More Orange Boxes = More Profit

You can now see the areas I meant, the traps. Notice that this was a 2:1 trade for me, according to my rules.

The maximum I will have as a stop loss is 12 ticks, and I will aim for 24. I will let the trade run once it triggers. I will not alter it or touch it at all. It will either win or lose.

Mathematically, as long as I win over 33% of my trades, this will pay off.

Here you can see the trade at the time I took it.

Current results = 1 win – 0 loss – 99 trades to go.