Sniper Trading
Sniper Trading: A Highly Risky Behavior That No One Should Ever Do, unless you are MoNoRi-Chan "The Sniper".
Introduction:
In the realm of trading, there are strategies that can lead to potential success, while others carry substantial risks. One such approach is known as "sniper trading," where traders aim for high-risk, high-reward trades in the hopes of hitting a home run. However, this behavior should be approached with extreme caution, as it often leads to significant losses and negative long-term consequences. In this article, we will explore why sniper trading is considered a highly risky behavior that no trader should engage in.
The Fallacy of Home Run Trades:
Sniper trading revolves around the desire to hit a home run, where a single trade can generate substantial profits. While the idea of such a windfall may seem enticing, it is often a trap that lures traders into a cycle of gambling rather than making informed decisions based on analysis and strategy. The truth is, going for home run trades is more akin to gambling than sound trading practices.
The Illusion of Euphoria:
One of the dangers of sniper trading is the euphoric high that comes with hitting a successful trade. This surge of emotion can lead traders to believe that they have mastered a winning formula and encourage them to repeat the same risky behavior. However, this can create a dangerous cycle where traders become overconfident, taking on increasingly risky trades that can quickly erode their entire trading account.
Start Small, Build Habits:
Experienced traders often emphasize the importance of starting small and gradually building up trading skills and habits. Starting with a small account allows traders to focus on developing effective strategies, risk management techniques, and emotional control without risking substantial capital. It is essential to understand that if traders cannot generate consistent profits with a small account, they are unlikely to succeed with larger sums.
Consistency and Growth:
Rather than chasing big profits through high-risk trades, it is far more prudent to aim for consistent profitability and gradual account growth. Trading should be viewed as a long-term endeavor, requiring discipline, patience, and adherence to a well-defined trading plan. It is through consistent and disciplined trading that real growth is achieved, rather than through sporadic attempts to hit home runs.
Conclusion:
Sniper trading, with its focus on high-risk, high-reward trades, is a highly risky behavior that no trader should engage in. The allure of quick profits can cloud judgment and lead to substantial losses. Instead, traders should focus on developing sound trading strategies, risk management techniques, and emotional control. By starting small, building habits, and striving for consistent profitability, traders can position themselves for long-term success in the challenging world of trading. Remember, successful trading is a marathon, not a sprint, and risky behavior should always be avoided in favor of prudent and calculated decision-making.
| ⚠️ Disclaimer: | The information provided in this text is for educational and informational purposes only. These writings are my own opinion, provided as-is, and has no warranty expressed or implied. None of it is financial, legal, or other professional advice. The author encourages readers to use discretion and make informed decisions regarding their own practices while seeking professional advice if necessary. |
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with the mandatory disclaimers out of the way, let's get down to business:
The Strategy
With the original video explaining this strategy now private, I'll share my knowledge to guide you through the intricacies of Sniper Trading.
Sniper Trading is a trading strategy that employs a patient and calculated approach, focusing on high-probability setups with potentially significant rewards. This strategy utilizes a top-down view, starting from larger timeframes and gradually zooming in to pinpoint favorable entry points. It revolves around the strategic use of specific moving averages, such as EMA(200), EMA(50), EMA(26), and EMA(14), to identify key trading opportunities.
Indicators Used
- EMA(200): Long-term Exponential Moving Average
- EMA(50): Medium-term Exponential Moving Average
- EMA(26): Short-term Exponential Moving Average
- EMA(14): Very short-term Exponential Moving Average
Execution
Step 1: Top-Down Analysis
Traders begin by analyzing the bigger timeframe charts, looking for a convergence or intertwining of all the moving averages mentioned above. When these moving averages align together, it suggests a potential trend reversal or continuation, creating an ideal setup for entry.
Step 2: Confirming the Entry
Once a promising setup is identified on the larger timeframe, the trader zooms in to the weekly timeframe and confirms that the EMA(50) is positioned above the EMA(200). This confirmation enhances the likelihood of a bullish trend, supporting the decision to enter a long position.
Step 3: Zooming into Lower Timeframes
After confirming the setup on the weekly timeframe, the trader further zooms into the daily timeframe to ensure the price remains above the EMA(200) and EMA(50). This additional confirmation strengthens the conviction to proceed with the trade.
Step 4: Fine-Tuning Entry
Moving to the 4-hour timeframe, the trader observes the proximity of the price to all the relevant moving averages. If the price is near these moving averages, it presents an opportune moment to enter the trade at a lower timeframe, such as 15 minutes or 5 minutes.
Step 5: Letting the Profit Run
Once the trade is executed, the trader patiently waits for the price to break out and capture the trend's momentum. This approach allows for maximizing profit potential and holding onto positions during favorable price movements.
Risk Management
Sniper Trading requires discipline and risk management. Traders should aim for precise entries, and if the price retraces, they have the option to add more positions to the trade. The goal is to pick the bottom, which allows for more free margin to trade and add more positions as the price retraces.
If the price moved in favor of your position, don't forget to adjust SL to above your capital so you don't lose what you gained.
Capital and Market Conditions
This strategy can be executed with as little as $30, making it accessible for traders with limited capital. However, Sniper Trading performs best in trending markets. In sideway markets, there is a risk of depleting capital due to a lack of clear directional movements.
Exit Strategy
The exit strategy in Sniper Trading varies depending on market conditions. Traders typically aim for a risk-to-reward ratio (R:R) that permits exits between 200 to 400 pips. This allows for significant profit potential while managing risk effectively.
In conclusion, Sniper Trading is a high-risk, high-reward strategy that demands patience and a deep understanding of market structure. Traders who can read and interpret the charts with precision and aim to go with the market flow have the potential to achieve profitable results using this approach. However, it is essential to exercise caution, manage risk effectively, and adapt to market conditions to succeed in this challenging trading strategy.
It's either I wake up rich or apply for food stamps tmrw. -MoNoRi-Chan "The Sniper"
