Biggest Quarter of TFD History!

Hello everyone and welcome to The Forex Dictionary, I hope you’re having a wonderful day and I want to thank you for reading this blog!

The first quarter of 2021 has been the biggest quarter for TFD ever, not only for TFD but also for myself. For the last 5 years I have been struggling to have a strong first quarter of the year. Especially in January and the first half of February I clearly noticed that my results were much less than usual. The pattern that led to this was fairly easy to recognize. For the past 5 years, I have been going to Costa-Rica for a full month, every time in December. I don’t trade when I travel to protect my capital and to recharge my batteries. This pattern is perfectly fine and totally healthy for a full-time trader but the pattern that follows is anything but healthy. When I arrived back in Belgium I immediately started preparing my SMB to trade the following week. In other words, I started trading again without any real preparation. Like any sport, you need a good warming-up before you can perform at 100%. I did not do this at all, anything but. Once I discovered this pattern and realized that this was the cause of my ‘lesser’ results, I started to tackle this problem. Every time I came back from a trip I took half a month to prepare for the real work. In this interim period (period between returning from a trip and starting back with the real trading) I spend a lot of time backtesting my most traded pairs.

Because of COVID-19, of course, 2020 has passed a little bit differently than what everyone expected. It hasn’t been the nicest year but the situation is how it is, we can’t control it. The only thing we do have control over is our reaction to the situation. We had very strong performances in 2020 and at the end of the year we prepared ourselves very well for 2021, you start the new year the way you end the old one. I wanted to break the pattern of the last 5 years and have a strong first quarter of the year and honestly… The first quarter of 2021 has been murdered. Our hard work of 2020 has paid off tremendously. It has resulted in 7 positions above 10% profit with 1 position of 45% which makes it the biggest one of the year. In this blog I will go over each position how we predicted it and how it turned out!

The first 10%+ position was USDJPY. This one I shared in the Sunday-market breakdown of 24/01/2021. The SMB is a recording that I share with TFD members every Sunday evening. This way they can get a behind the scenes look at how I personally analyze the markets.

Screenshot forecast Daily chart 24/01/2021.

We can see a clear Inverse Head and Shoulder formation on the Daily chart (white zone). You can see the price rejecting that region with the red pin bar followed by the blue candle. This was a clear indication for us that the price wanted to continue its bullish momentum. You can also clearly see our targets. The 104.800 region was our Daily take profit (white line) and our Weekly target was 106.300 (blue line).

Screenshot forecast 4H chart 24/01/2021.

On the 4H-chart you can see that we were looking to buy at the grey region. We wanted to buy at this region because we received our Bullish M-pattern (drawing) as our confirmation to take the long.

Screenshot result 10 days after our entry.

You can see that our forecast has played out perfectly. As expected the price came back to the grey entry-region to complete the Bullish M and to continue it’s upside momentum from there. We have completed our Daily target (104.800) in no-time. The bullish run gave us a solid 16% profit.

 Two weeks later, as the market has to take its breathe at one point too, I started to notice some bearish signs which I have shared on the Sunday-market breakdown from 07/02/2021. As always I focus myself on the higher timeframes first, and this is what I saw…

Screenshot forecast Weekly chart 07/02/2021.

On the Weekly chart you can see that we find ourselves at a very heavy selling region.

I have marked this zone out with a blue box. You can clearly see all the bearish rejection candles. This zone has really proven itself as a heavy selling zone in the past. We always trade with the history of the pair so we will look for selling set-ups at this region.

Screenshot forecast Daily chart 07/02/2021.

On the Daily chart we look for our indication. We simply want to see a Daily red candle, this is our proof that the bears are at this region. We received this indication so after this we could go to the 4H-chart to search for our confirmation in the form of a pattern.

Screenshot forecast 4H chart 07/02/2021.

On the 4H chart we have received an impulsive break of the last higher low, indicating us that the market direction has changed from bullish to bearish. Our confirmation is and will always be a pattern. We can see a clear 4H H&S. We were looking to short the market at the gray (shoulder) region.

Screenshot result one week after our initial entry.

One day later the price approached our entry-region as expected. We received our shoulder 2 and took a short. As you can see, the price impulsed to the downside. You can really see the higher timeframe bearish momentum kicking in. This is the reason why we always focus on the higher timeframes and want to take entries around these regions because once they go, they go very impulsively. This bearish move provided us 15% profit.

Immediately after the bearish trade we saw the market decelerate. We saw the market forming a clear deceleration box (gray region). These were all bullish signs and so, my bias switched again and I was looking for longs. I have forecasted the next long-position in the TFD-academy. This is our communication channel where I update the members on interesting positions and how I manage them.

Screenshot forecast 4H chart 10/02/2021.

Within that deceleration box we saw a big spike to the downside which closed again above the deceleration box. This is the moment where a lot of retail traders were caught at the wrong side of the market. All of the retail traders went short on that spike, which provided a lot of liquidity for larger institutes to go long! All of these were indications. The confirmation we received was a 4H inverse H&S-pattern. I didn’t take this trade myself as I was done trading for the week on the ninth of February. It is very important to follow your plan.

Screenshot result two weeks after the entry.

 As you can see, we have gone to the upside very impulsively from there. How come, we went so impulsively to the upside? Remember, we always trade with the higher timeframes. If you go back to the start of this blog you can see how I’ve predicted the Weekly target (106.300). And if a Weekly Fib needs to be completed, it will be completed and it will be completed impulsively! This long-position could have gained me 34% profit but I wasn’t involved in this one personally. Glad to have shared this with our community so they could capitalize on this move!

A week later, NZDCHF offered us a nice long opportunity. On the Daily chart we were in an uptrend forming clear higher highs and higher lows. On the screenshot below we were testing the previous Daily resistance as potential support. You can see that we had already respected this white zone as support several times. This was our indication that the market wanted to continue its bullish momentum. Our confirmation would be the 4H Inverse H&S which you can clearly see (pink drawing). We wanted to see the market drop to the gray zone, the second shoulder of the pattern. Once there we would take a long.

Screenshot forecast 4H chart 15/02/2021.

As you can see, this is a fairly “zoomed out” screenshot where you can just barely see our gray zone (where we predicted on the SMB this entry). We perfectly formed our second shoulder and immediately impulsed upwards. We reached the 4H -27, the Daily -27 and the Weekly -27 in no time. This position is currently our biggest position of the year.

History has clearly repeated itself again, last year our biggest position was also an NZD pair. EURNZD had delivered us a little over 50% profit at the time. This year it was the turn of NZDCHF which realized us 45% profit.

Screenshot result two weeks after the entry.

Just under a month later, March 12 to be exact I shared a short opportunity on GBPCAD. On the Daily chart I saw a Head & Shoulder pattern which confirmed to me that the market had shifted from Bullish to Bearish. This was not my only confirmation, in this case we had a pattern within a pattern. In the larger Head & Shoulder pattern we found another Bearish pattern, the Bearish W. Because we had not one but two Bearish patterns, our probability of taking a successful position increased dramatically. As indicated by the pink drawing, we expected the price to return to the Daily S&D zone (white) first before going down. Once it reached this zone, only then would we be interested in taking the short.

Screenshot forecast 4H chart 12/03/2021.

We first returned to the Daily S&D zone (white) as predicted. Once we reached this zone we followed our plan and shorted GBPCAD. Before we impulsively moved down the market needed some time to get ready, we hovered around our entry point for a while before the market committed. This position gave us 12% profit!

Screenshot result one week after the entry.

Later this month, we opened our second GBP position. This time it was the turn of GBPAUD. At the beginning of this year, we designated prime monthly zones for certain pairs in our team trainings. We had hit the prime buying zone two weeks before we took GBPAUD, so we knew that the higher timeframe, the monthly zone was bullish. Because we knew this, our only bias was long and so we actively looked for long set-ups. On the SMB of 22/03/2021 we had found a bullish pattern, a Bullish M pattern on the Daily chart. As indicated by the pink drawing, we expected the price to return to the Daily S&D zone (white) before going long. Once it reached this zone, only then would we be interested in taking the long set-up.

 Screenshot forecast 4H chart 22/03/2021.

The position returned to our entry region (white zone) as expected. As usual according to our plan and we have executed on this region (white zone). This position immediately flew into the altitude and not just like that, it went very impulsively. In a blink of an eye we have realized 10% profit.

Screenshot result one week after the entry.

And if that wasn’t enough, we opened a third GBP position at the end of March. 3 GBP positions in less than a month and each one gave us over 10% profit, that’s what I call knowing a currency inside out. Our last GBP pair taken was GBPNZD. Like its brother GBPAUD, we were looking for a long set-up. Both on the Daily-chart and the 4H-chart you could see a very clear Inverse Head & Shoulder pattern. As indicated on the screenshot, we wanted to see price come back to the white region first before taking the long set-up. You don’t want to chase the market, you want to let it come to you, a golden rule!

Screenshot forecast 4H chart 30/03/2021.

The market did perfectly what we predicted. We remained patient until the market came to our entry zone (white) and then we were sharp on our execution. The long set-up was taken and we impulsively flew to our Daily take-profit point for 12% profit.

Screenshot result one week after the entry.

So this is how a brilliant first quarter of the year looks like! Seven positions above 10% gain and one position above 40%. We owe this solely to the hard work and persistence we have put in over the past year and especially at the end of 2020. We have not sat around complaining and crying about the lockdown and Covid etc… We have focused and put all our energy into responding to this situation, resulting in this.

I hope you enjoyed this blog and see how transparent we are at The Forex Dictionary.

Explaining how to trade is one thing, showing you how to trade week in and week out is another. Just that second thing makes us unique!

Armani-Rochas Decock

The Forex Dictionary

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