 Hi, my name is Leon Roe currency trader and trading coach at trading 180 comm and in this video I'm gonna show you how to profit from Traders who don't use stop losses now. This isn't a debate on whether you should use one or not I'm gonna show you how I profit from those traders who don't use them or who remove them While they're in a trade now you might be thinking out there Well, you know, who doesn't use a stop loss retail traders, you know, some of them do some of them don't right, but there is Information out there. This is from, you know, I've sponsored Reuters article What is this a big news publication and you know, pretty much the publication is stating stop loss Stop using stop loss orders. They don't work. Right and it goes into You know why? Stop loss this this company Think that stop losses don't work and again I'm not here to say whether they do or they don't their strategies for for everything, right? but The forex market is a zero-sum game meaning for someone to win someone else has to lose So what I'm gonna show you is how to capitalize when these guys Yeah, guys out here and guys who teach you, you know, that you you know strategies To trade without stop losses. No stop loss forex strategy. There's there's tons of this stuff, you know online I'm gonna show you exactly how I profit from those traders who use who don't use stop losses Right, and this is not just a retail trading Problem as far as you know, someone sitting behind the computer at home. Yeah, this is an industry wide Thing yeah, so this guy his name is quake who At a bully right you may know him UBS trader who lost a hell of a lot of money maybe a couple billion right and I want you to listen to this quickly right before we get into the technicals. I'm gonna show you right because it each pretty much Breaks down exactly The the kind of person that I'm trading against the kind of strategy that I'm trading against and this is a big Bank, this is UBS. Right, and this is how they trade. Yeah, so Basically, you're wrong. So I go well if they see you of the banks as I'm wrong I must be wrong and I flip my positions go along with the house view on the day that we do that July the first the market starts to crash and We just panic lose control and as the market crashes up to 40% in some of the markets We just bought more and more and more as it's going down as it's going down buying this stuff Yeah, because because the idea is that we'll just hold or buy more because when it bounces then you make the money back How'd you hold those possessions? Well using the umbrella, right? So I'm gonna come back to that again. Yeah at the end Probably at the video or maybe not depends on whether you get the point or not but So let's basically go into how I would take advantage of that Strategy now what you have to understand is that there are typical strategies that traders will trade One of them is a breakout strategy. Now this represents a nice Level, right that breakout traders would be looking at. Yeah, so you've got Level a clear defined level. You've got a nice weak rejection there. It's very very accurate this level Yeah, you can see it from there very very accurate Yeah, remember we haven't got we don't know what's coming to the to the left or to the right of the chart So the obvious thing is one of two things either traders are getting in here on that engulfing candle, right or if Basically prices break to the upside because if we've been in pretty much like a ranging market, yeah for a while Yeah, if you look at that, maybe that's a ranging market right there Maybe to the left maybe not but this level here It's definitely a clear and defined level. Yeah, so Breakout traders, what do they do they trade breakouts of levels? So what do we see happen? Here we get a nice strong bullish candle. Yeah breakout traders are Jumping in yeah, just in the same way that quake who yeah has a view on the market and Price action is confirming That view Yeah, so this is pretty much what we're seeing. They're gonna place their trades Once they place their trades. Yeah, they're committing capital into the market Yeah, so you have to wait for you know Breakout trader for example. It's one of the strategies to commit capital via obvious price action Yeah, and if this goes to the heavens then good for them. What I'm doing is I And waiting for when obvious price action when obvious trading setups fail Those traders. Yeah, I'm not concerned with Trading your typical breakout trade, you know trade Strategy that's not how you know we trade we trade when there is an edge and the Psychological edge and the zero sum game. So I'm trying to take advantage of traders who don't use stop losses. Yeah So how do I do that now? I'm waiting and I'm sitting on my hands and they've committed capital place their stop losses below the swing of various areas Then what I'm gonna do is I'm waiting for that price action that draws traders in to fail because remember these guys Don't use stop losses and some of the guys that are disciplined or not disciplined enough to Hold their stop loss. Yeah, because it's something called loss aversion and loss aversion pretty much means Pain feels worse than gains feel good. It's a psychological bias So if pains feel worse then gains feel good the consequence of that in the forex market is that traders will start to Move their stop loss because they don't want to accept the loss and there are traders that Will not use stop losses As it goes down and goes against them instead of risking 1% or 2% or 5% On that trade they find themselves on the wrong side of the market Yeah, and like Kwaku said You know on the day that he flipped his position Right The market went against them Yeah, but with the banks what they can do is that they can add into positions because the theory is like he said is That he's hoping for the market to bounce back. So what they're gonna do is they're gonna buy More as the market is going down and if the market ever comes back To here. Yeah, as the market goes back and they've bought down here Then what they're doing is they're taking profit on the way up Yeah, so to cover the loss for this Banks have deep pockets a very deep pocket so they can do that the average retail trader though does not Yeah, in fact, they'll end up, you know, blowing their accounts And this is exactly how traders blow their accounts if they don't have enough You know to cover the margins Now this is quite an extreme position, but I'm gonna show you the actual setup and this is exactly how it worked So the market is going against these traders. Yeah Mark, just imagine that they didn't have a stop-loss And it's going against these traders. Now, they've committed capital and what does this represent? This represents paying for a lot of traders who went long here If you're in a trade and you're buying as well and you're compounding your marketing galing in etc right this represents a lot of pain because you're looking at your Unrealized profit. Yeah, and you're seeing negative Yeah, in fact, you're probably adding to your account if you had, you know, the average is what maybe ten thousand pounds You might have to top up another ten thousand pounds twenty thousand pounds thirty thousand pounds just to cover You know the margins and prices go against you Yeah, this represents pain for a lot of traders now When traders are in pain, what is the one thing that you want in life when you're in pain? Relief. Yeah, you want pain relief when you have any kind of pain from a cold to you know Akes back pain, whatever it is. Yeah, you want you go out and buy what pain relief Yeah pain relief in this scenario would be if you're if you're here If you're down here, and you're in a lot of pain in your account You're seeing you're on the edge of blowing your account. What do you what would be pain relief for you? If price ever came back up to here because what that would represent is You're able to get out for your original loss. Yeah Whatever you factored in here, whether that was one percent two percent half a percent, etc. All right, you're now Here nearly blowing your account If prices can come back up here Traders are going to get out for at least a small loss the original loss small loss or at least a break-even trade Yeah, it's just the way things work. It's the most logical thing to do So you've bought here traders. You don't trade stop losses Bought here. They've gone through the pain phase. Yeah, it's lasting maybe a couple weeks couple months, etc. Yeah, and Some pain as well can last even a few days for For traders overall. Yeah, but as we go forward as we go forward Eventually, there's some pain relief coming It's a pain relief coming and what happens is its price comes back up to the area This is a supply zone. You just draw that there Yeah, comes back up to the area where these guys are in pain the banks are probably in a bit of pain, etc And what they're doing is they're averaging in When they're making money on the way up, then they can exit their trade When prices come back up here or if price come back here Unfortunately for Kwaku price never came back. Yeah for them the market crashed on them and never came back Right, but in this scenario After waiting a few months quite a few months and now beginning of the year. They are able to Make the money back more so by adding in buying down here able to be relieved the pain relief here is definitely true and Pain relief represents itself in the form of exiting the trade So if they bought here you buy Yeah, you have to sell to exit. It's the opposite transaction. They bought here and they have to sell to exit So selling orders are supply someone like me Who understood that there was a lot of pain going on here traders being captured because obvious price action failed them Then they're going through the pain phase. So this is the capture phase Oh, it's the capture phase. This is the seat. This is the pain phase P This is the relief phase our Relief in this area and if they bought then they have to sell to exit What else is going on within this area? As well. Yeah to add to the supply and demand equation new traders who are looking at levels of resistance resistance Resistance are also doing what entering new positions to what the short side, right? So if they're entering short That is supply We got traders Like the banks who have been buying down here making money on the way up Right make these guys are making money on the way up. Where are they going to be taking profit here? And if they buy Down here by by by all these buys Where we did to where they what is that take profit order a sell order Supply supply supply. So net net we should see what? more supply Then demand in this area What happens? Prices fall We can clear the chart Little bit. Yeah, let's clear all this up and understand that This is how you need to look at the market. It's not just good enough to say. All right. This is the supply zone You know that we're gonna get short. You have to understand the psychology behind Why what makes this? Potential or potentially strong supply zone. It's not because there's a technical pattern There's a lot of things going on behind the scenes. Yeah, you need to be aware of yeah And again going back to quake who Yeah, and we'll just play this one more time. Yeah, and he really breaks down this whole scenario Basically, you're wrong. So I go well If the CEO of the banks as I'm wrong, I must be wrong and I flip my positions Yeah, go along with the house view long here on the day that we do that July the first the market starts to crash crash And we just panic lose control and as the market crashes up to 40% in some of the markets We were trading we just bought more and more As it's going down as it's going down buying this stuff Yeah, because because the ideas that were just hold or buy more because when it bounces then you make the money Hold those positions. Well, yeah when it bounces You'll make the money back So they're making the money back and their original position. They've already made their money. There's no need to hold on To that position because they made all their money plus more and they exit here This is what happened to supply and demand equation. So that's pretty much how At trading 180 we take advantage of traders who do not use or remove their stop losses and get themselves into trouble Is there a case for using stop losses or not using stop losses? Of course not saying whether you should or you shouldn't but what I am saying is that For those traders that don't use stop losses or haven't used stop losses and are watching this video This is exactly how I'm profiting from you And if you want to find out a bit more About, you know, the many many setups this isn't just this isn't just applicable to daily charts as far as one-day charts This you can use this strategy on Every single time frame Every single time frame because traders are traders are caught in their positions on every single time frame Whether it's a five minute ten minute twenty minute, etc. Yeah, this happens all the time every day so With that being said if you want to find out more go to trading 180.com and I hope you enjoyed this video If you have any questions, please Let me know and I will get back to you as soon as possible Guys have a great trading week and take care