4: How Nick Shawn Used A Forex Divergence Strategy To Quit His Day Job w/ Nick Shawn

UPDATE: Check out Nick’s more recent interview (includes 2 bonus videos)

Financial  freedom was the one thing Nick Shawn always wanted to achieve. He looked into, even tried, a lot of the common “make money” ventures like network marketing, e-commerce, even drop shipping.

He eventually found Forex trading and he immediately loved the idea of making money by spending just a couple of hours each day looking at the charts.

However, like most of you reading this, he found it hard to turn this dream into a reality early on.

Nick spent a decent amount of time educating and practicing in an attempt to find a strategy that would work for him.

It eventually took Nick a year and a half before he was finally able to quit his job and became a full-time trader.

Podcast Interview

Listen to his full story and learn the strategies he uses in this weeks interview:

Interview Links

Nick Shawn on Facebook

Recommended Books

Naked Forex by Walter Peters

Broker and Platform

Trader’s Way
FXChoice
LQDFX
MetaTrader 4
TradingView

Key Lessons

• [07:53] If I can learn to trade and do something like trading, it would create a substantial amount of freedom for me because I could look at charts maybe for like an hour or two a day and then I can go about the rest of the day however I want to.
• [11:39] Once you’ve learned something, you take what you’ve learned and then you sort of modify it and adapt it to fit yourself, your personality, your psychology.
• [15:49] The only thing that is guaranteed in trading they say is that you are gonna take loses.
• [22:07] The Risk-to-Reward ratios were often very difficult to control just because of so much manipulation on the lower time frame, especially for volatile pairs.
• [22:51] I like the idea behind swing trading on higher time frames because while on the M1 the charts are barely, rarely changing every minute.
• [23:06] You’re forced to make decisions on a short time period.
• [23:19] I found myself more peaceful looking at the chart on the higher time frame getting the big picture and then waiting for what I know will work out most of the time.
• [25:37] I didn’t have a Plan B. My Plan B was to try Plan A again if it didn’t work out.
• [26:49] I don’t think that there’s any Holy Grail because the markets are ever changing and everyone’s psychology is different.
• [26:54] Even if you take one system that may work for one person, it will not always work for someone else because people’s minds are different, people’s psychology is different, people’s perceptions are different.
• [29:06] If you’re in a position where you want to learn something like trading to expand your income, you’ve got to be able to invest time.
• [32:58] As long as you’re peaceful and relaxed when you’re trading, trading will not seem stressful.
• [37:17] Don’t focus too much on a specific strategy and don’t focus too much specifically on buying or selling, or the question of “what shall I do whenever you are looking at a chart?” …I would say spend a month not placing any entries.
• [42:46] Make sure that no matter what when you are trading, make sure you’re always on the same mindset. And that mindset should evolve around being peaceful and relaxed.

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Nick’s Trading

• He trades Forex
• He does his technical analysis using higher time frames specifically the H4 and Daily charts
• He uses Elliot Waves, 3 Push Theory or the Market Maker Method
• He also uses Divergence to spot the reversals
• His average trading duration takes a couple of days to a week or two, sometimes 3 weeks
• He has a 70% to 80% winning rate
• He makes 10% to 50% monthly returns
• He trades all the Forex pairs, but his favorite ones are the JPY pairs, EURUSD, and GBPUSD
• If he sees a good setup he will take the trade where he can have 2 to 20 active trades at a time
• He targets 100 pips to 300 pips depending on the volatility
• He uses the TradingView platform
• He manages his open trades based on Price Action
• He spends less than a minute on every currency pair to make his trading decisions

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Nick’s Strategy of the Week

• Opens JPY pairs and go to M15 charts to see the patterns across time frame
• Waits for the market to be in a consolidation period and after the market is in the consolidation, he looks for the market to break out of the consolidation
• If for example the market breaks out of the consolidation and goes upward, he waits for it to come back and test the top of the range of the consolidation
• Waits for it to spike up even more for the second and third time before he starts seeing bearish wicks typically means a reversal
• Enters a Sell, targets the 50% of the previous up move and a stop loss of 1:1