So many retail traders are repeating the same old mistakes. Think about it, if 90% of retail traders lose money in the financial markets and they're all sourcing their information from the same place, then obviously the 10%'ers are doing something different, right? Below is a super simple yet high effective form of technical analysis, BCR Methodology, that can be implemented to any strategy or trading system that will super charge your trading performance. So let's get stuck in!
Nowadays, there are so many traders stuck in a rut. For example, entering long positions at the high of the move before a pullback, entering short positions at the bottom of the move before a pullback, buying beneath resistance levels, selling above support and choking their trades by having their stop losses too close to entry.
Why do you think that is?
The answer is simple. Us humans tend to think that we know best.
Overtrading? Hesitation? Outdated strategies?
All traders are guilty of it, right?
Let me introduce you to a relatively simple piece of knowledge that if executed and implemented correctly, can boost your performance. Significantly!
Interested? Let's dive into it…
What does BCR stand for?
Personally, I live by these three words when it comes to trading the markets.
The BCR Methodology isn't by any means, a system or strategy in itself, but rather additional entry criteria that can be implemented to any and every strategy inside the Forex market.
What is BCR's core focus?
BCR is used to gain a better understanding of confirmation in your trade, whilst reinforcing principles such as patience and discipline. The key principles of being a consistently profitable trader.
We are in a game of probabilities, and the more confirmation you have in a position, the higher the probability of the trade going in your direction.
You want to see what it looks like on the chart, don't you?
We – traders – just love the chart…
Let's take a look.
In the example above, the first highlighted area on the left shows a breakthrough the 50EMA (red line), the close above the 50EMA and then price to come back down and retest it.
In this example, the retest shows price breaking back beneath the 50EMA and therefore, we know price is going to continue to the downside. However, on the example to the right of the chart, we see price yet again break and closing above the 50EMA except this time, the retest shows price rejecting the 50EMA so we know price will continue going up.
The BCR methodology or pattern if you like, takes place when the price breaks through any support, resistance level, EMA, SMA, or any level of significance. No matter whether it's dynamic or purely technical.
The key is to wait, be patient, let the price action come back and confirm that the level it's just broken is going to support or resist the price and that the trade is indeed going to continue in the direction of your bias.
This is without a doubt one of the most powerful, simple and effective analysis methods out there. Yet, it's rarely ever spoken about!
My suggestion to you is to get out there and try it out for yourself!
No matter what system or strategy you have in place right now, implement BCR and watch your performance boost.
Seriously, that's all there is to it.