The trading method discussed in this video takes practice to learn. Isolating the trend seems easy, but for many people it is quite difficult, especially when starting out. For more on forex trading, see the Forex Strategies Guide eBook: https://vantagepointtrading.com/forex-day-trading-and-swing-trading-strategy-guide
Choose your time frame combination: Daily/4Hour or 4Hour/Hourly. Use the longer one as your default for flipping through charts. Watch for pairs pulling back to a trendline (within a trend) on this time frame. If you see one, that is a potential trade. Drop down to the lower time frame, wait for the consolidation, and then enter when the price moves outside the consolidation. Place a stop loss as described in the video, and a profit target at a 2:1 or 3:1 reward to risk ratio. More precise profit targets will be discussed in a future video.
It is up to you to find trending markets, and once you do you can utilize this strategy. If you are constantly losing, then you are likely not isolating the trend properly, you are not waiting for the consolidation, or you are taking trades at random locations and not in alignment with support/resistance (trendlines).
Just because you can draw a trendline and see a consolidation doesn’t mean it is a good trade. Use your discretion in picking out trades that are in strong trends with multiple factors pointing toward a move in your trade direction.
Adjust trendlines as new price action unfolds.
Understand WHY the strategy works, and not just the rules. This will help you find better trades. The strategy works because we are trading only in the trending direction. We are waiting for a pullback which means we get an advantageous price within the trend. We are waiting for the price to slow down, showing respect for our support/resistance area. The price is then starting to move back in the trending direction before we enter (consolidation breakout). And we are always making more on our winners than we lose on our losers.
If you are isolating trends well, you should be able to win with this strategy more than 50% of the time, and more than 60% of the time once you get good with it. Winning 60% of trades, with a 2:1 or 3;1 reward to risk ratio can produce huge returns (do the math, assuming you risk 1% of your capital per trade, and thus make 2% to 3% on your winners).