Benefits of Knowing Where Traders Place There Stop Losses – Price Action Traders Mindset Part 6

This is part 6 of the Price Action Traders Mindset Video Series. If you have yet to watch any of these videos I highly recommend going back to video one and starting from the beginning here.

There are two main ways that any market moves, first way is buyers buy a market plus taking out sellers stop losses making it go up. The second way is sellers selling a market and taking out the buyers stop losses making it go down. Both ways are the core functionality of the overall Forex market or any market for that matter.

Price Action Mindset Part 6

Now, let’s take a step back for a moment and look at this knowledge from an observer perspective. By knowing this we also know that if we can coincide our price action trading along side the aspect of knowing where these places are it can be beneficial for giving us yet another edge in our trading process. You see, as the market flows up and down whether going up or down or even sideways, there is still logic to these moves. The main reason overall is because the majority of traders are predictable.


Now that brings me onto a third aspect in trading and that is we all should by now that in order to be profitable in this business it involves another losing a trade. This goes into the same psychological training that knowing where the stop can help.

In the video above I go over looking at these areas on the chart and knowing when they coincide with your price action can give any trader a massive edge.

About Timon Weller

Timon Weller is the professional Writer and Trader behind the blog Forex Reviews. Timon Weller is also a professional Teacher of Price Action Trading and creator of the popular Training Series teaching people how to trade Price Action effectively called The Engulfing Trader. For other Forex Training available here at Forex Reviews click here.

For more on Timon Weller Click Here. To Learn more about How to Trade the Market and get updates Click Here.


  1. Imho the market moves because the capitalists want it to move and for no other eason at all. So they make it move to their profits and they don’t care a pip about your or my trades at all.

    • If you are referring to the capitalists as the big traders such as banks and institution and hedge funds then yes i agree.. I say the same in the video. They make money from our losses in general, however I disagree that they do not care about our trades, they look at the majority of stop losses and if it looks good try to take it out.. They care about making us lose basically, however like i say in the video even there moves is predictable just like all other traders. Knowing where the majority of the stop losses is, is very beneficial.

  2. Hi TIMON thank you very much for the video it has been really helpful. Ihsan

  3. thanks once again timon

  4. Thanks for the videos! Really enjoy your price action mindset series!

    • Your welcome Mike, this is a planned ten part series in total.. After finishing, I plan on making it available on DVD as well for all those that are interested and for those that do not have much access to internet all the time.

      Have a nice day 😉

  5. Hi Timon

    I was interested in terms you used, ID some traders are breakeven traders and some are losing traders. I can honestly say i fall into cat. of a breakeven trader. My 2 biggest sins is
    1). Closing a trade manually. ie trying to be smart and getting out before my s/l is hit.
    2). Not letting my profits run, closing way to early.

    I trade almost exactly like you described in video, i am use peoples stop losses to fuel trade.My entries are based on simple price turn strategy so catch trade as it turns on a retracement. Timon wonder if you can give me some advice how i can move my trading from break even to the winning catorgey. Or maybe couple pointers or anything to overcome the above 2 points. Something i can work it.

    Thanks in advance.

    • Hey James,
      Good question, you know it is one of those topics that could be discussed for days or even longer. In fact, I have thought I may even do a video series on it in the future because seriously it is one of the hardest hurdles for most traders.. Everyone goes through it though hey, it is not something anyone can avoid.. See as an internal hurdle.

      I will give a quick rundown though, my perspective:

      Firstly as traders we need a good strategy that we can believe in.. If you ask me Price Action is king. My fave being the Engulfing Candle which i go over in the series i am releasing in the next day or two. Everyone has there own preferences here, yet whatever strategy it needs to profitable more than 50% of the time. Meaning that 50% of all trades are more profitable than the losses. A bit of maths here.. 2:1 of more reward to risk being best if 50% trades are successful..

      Secondly, one needs to follow a process which includes discipline.. If you know you are more than 50% profitable then stick to that process however like I said the strategy must provide an opportunity to align with that profitability as well. A bit of maths there as well.. If the strategy has a success ratio of 70% but the losses are big no money will be made.. Break even then.. Many traders go for success ratio when in fact success ratio is less important than gain ratio..

      However as a tip to reduce losses and keep more profit make sure to lock in ( use break even ) at the right places. That is technique in itself though as well. There is a right place to lock in..

      Also, when entering 2 trades and both are above 1:1 reward to risk take profit on one and lock in the other however do not put take profit, exit only on opposing candle price action on daily charts or higher. Except that this trade may go back to break even.. Allow to run some trades, that’s why entering two half positions works best for some.. Taking some profits off..

      Most issues with trading for many is not keeping it simple.. More simple the more easy it is.. Also if it is a daily trade walk away from the charts and check once a day.. Looking at the charts does not increase probability at all. In fact most traders will find if they except loss and let there original rules of stop loss, take profit and break even management as a set discipline of periodic checking that you will find better success.. Let the original stop manage the trade in a way, the process of management.

      Look at ourselves as well, as we are our own worst enemy. Greed, fear of loss, fear itself or just discipline..

      It also depends on your own emotional response to trading, positive, negative etc.. When you enter a trade, what is the first thought that jumps in your head..?

      Lots and lots more could be said, but a bit to ponder yeah.. I have jotted this down for something in future.. Not sure what just yet because it is a big topic, important topic as well.. Gold ( as in the metal ) question really.. Thanks for the question.

      Overall some things to ponder for you…

      Regards and Happy Trading,

      • Thank you Timon great advice and thank you for taking time to respond.

        I appreciate It is difficult question to answer. I agree price action is king, i like to follow market swings on 1hr and daily charts with 5min entries. Its real simple method and with average stop loss bewteen 2-10 pips no bigger than this.
        The entry method ratio is in 80% level.

        I think you are right Timon i dont have clear idea or process how im going to manage trade after i have entered. This is allowing my emotions to get the better me. I like idea taking partial profits at 1:1 or more on position, locking in a breakeven or small win if comes back on me and takes my S/L.

        Its funny you should mention about what do i think when i enter a trade. Recently with in last 3 weeks i realise my thoughts was totally focused on the worst out come. IE how much money i was going to loss on this trade if it hit my S/L, cause focusing on this,was triggering my fear. This has been going on for ages it wasnt until i stumbled across a video about fear i realised i was under mining myself.

        Im now working on focusing on whats the BEST that could happen when im in trade now. I still get fearful but i try to catch myself and direct the fear to best possible outcome. IE it hits my target and i have profit on my position. I have noticed im getting better at managing my fear.

        I also like the idea If im trading for 1hr and daily targets, then checking the charts every 5mins isnt helping me either. Its just makes me want to mess around with my s/l or if i see something i dont like, i panic and close my position only to watch it goin on to hit my higher timeframe targets.

        Sure you have heard that million times Timon. 😀

        Thanks again Timon i cant tell you how nice it is to get some external input. Its lonely road,i tend to get wrapped up in my own thoughts.


  6. As always, Timon gave us another wise lesson in technical analysis.
    Thank you for sharing with us your knowledge
    Wishing you and your family a nice Christmas and a very prosperous and
    healthy New Year 2015.
    Alfredo Garcia.

  7. Thanks again Timon. Always find your Videos very helpful. Keeps me focused on my trading. (KISS) Keeping It So Simple. Cheers

  8. Timon,
    Every lesson makes me wiser, so keep going, to make me successful in trading.
    Many thanks,

  9. Senejani says:

    Hi Timon. Thank you for your awesome video.

  10. Thanks Timon, Much appreciated.

  11. Thanks Timon.

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