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TitleBabypips Forex
TagsForex
LanguageEnglish
File Size13.8 MB
Total Pages361
Document Text Contents
Page 1

School of Pipsology



Forex education is crucial for beginners.

We, the FX-Men, firmly believe this.

This is why we've come up with the New School of Pipsology. More lessons, more content,
and more corny jokes to satisfy your hunger for forex education.

The New School of Pipsology is designed to help you acquire the skills, knowledge, and
special abilities to become a successful trader in the foreign exchange market.

Our definition of a successful trader is having the ability to do three things:

1. Make pips
2. Keep pips
3. Repeat

If you can repeatedly do these three things, then you're on your way to being a superstar forex
trader! But we warn you, it's no cakewalk.

Remember when you were but a little teeny weeny bopper attending grade school?

No?

Well, according to our memories, here's how it worked.

You start schooling by rolling into pre-school with your chocolate milk and snack pack. The
next year, you bring your kiddie backpack to kindergarten. If you pass, you'll join the big
boys and girls in elementary school. But don't worry, we still have nap time in Grade 1. If you
pass Grade 1, the next year you'll enter Grade 2, and so on, all the way up to Grade 12.

It basically went like this:

• Kiddie School: Pre-school and Kindergarten
• Elementary School: Grade 1 to Grade 5
• Middle School: Grade 6 to Grade 8
• Summer School
• High School: Grade 9 to 12

This is how our lessons are broken apart, so you can relive the past and also be able to learn
and study forex trading techniques at your own pace.

Page 181

Remember that, when support levels break, they usually turn into resistance levels.

This concept of "role reversal" also applies for broken resistance levels which become
support levels. These would have been good opportunities to take the "I think I'll play it safe"
method.



Placing stops and targets with breakouts

One of the difficult things about taking breakout trades is picking a spot to place your stop.
Unlike range trading where you are looking for breaks of pivot point support and resistance
levels, you are looking for strong fast moves.

Once a level breaks, in theory, that level will likely become "support-turned-resistance" or
"resistance-turned-support."

If you were going long and price broke R1, you could place your stop just below R1.

Let's go back to that EUR/USD chart to see where you could place your stops.

As for setting targets, you would typically aim for the next pivot point support or resistance
level as your take profit point. It's very rare that price will break past all the pivot point levels,
unless a big economic event or surprise news comes out.

Let's go back to that EUR/USD chart to see where you would put those stops and take profit
points.



In this example, once you saw price break R1, you would have set your stop just below R1. If
you believed that price would continue to rise, you could keep your position and move your
stop manually to see if move would continue. You'd have to watch carefully and adjust
accordingly. You'll learn more about this in later lessons.

As with any method or indicator, you have to be aware of the risks with taking breakout
trades.

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