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Nial Fuller

NIAL FULLER
Professional Trader, Author & Trading Coach

3 Trading Strategies I Would Take to A Desert Island

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By in Forex Trading Strategies By Nial Fuller Last updated on | 48 Comments

Everyone likes to have fun with hypothetical “Desert Island” questions. You know the ones where you’re sitting around with your friends asking each other what you would take with you or perhaps who you would take with you if you only had ONE choice and had to be banished to an uninhabited / desert island for the rest of your life?

In today’s lesson, I wanted to have a bit of fun but also discuss with you what I would take with me if I could only pick ONE trading approach for the rest of my life. If I was going to a desert island (that had excellent internet connection lol) these are the trading tools that I would take with me…

Here’s how I would enter the market…

If I had to only look for ONE price action pattern to enter the market from, it would be a very obvious and powerful one, something that once you understand, is hard to miss…

What I would be looking for is a pin bar or tailed bar, ideally a long-tailed pin bar. These are patterns with an obviously long tail (or shadow), it doesn’t have to be a “pin bar” per say, although it’s better if it is, but a simple tailed bar located properly will work too.

Let’s look at some examples of what I am looking for on a day-to-day basis in the market regarding tailed bars and pin bar reversals:

Here’s an example of a long-tailed pin bar (sell signal) within a down-trending market:

Here’s another example of a long-tailed pin bar. This time, it’s a bullish long-tailed pin bar (buy signal) that formed at a key support level in the market:

As we can see in the next example, pin bars often give us very easy to spot entries into powerful trends. In fact, a pin bar after a pull back within a trend is probably my favourite price action entry setup:

Next, let’s check out a tailed bar; a bar that is not quite a “pin bar” but still essentially portrays and implies the same thing. The main difference is the body (distance between open and close) of the bar is not quite as small as a pin bar’s in relation to the total length of the bar:

From the examples above, it should be apparent what I would be looking for if I could ONLY pick ONE entry signal to use for the rest of my life. It should also be apparent WHY I would choose pins / tailed bars; they convey a very important message about what is likely to happen next in the market, in a very clear and powerful way.

For a more detailed tutorial on tailed bars, see my tailed bar trading tutorial

For a more detailed tutorial on pin bars, see my pin bar trading tutorial

Money management

It’s always amusing to me that most beginning traders seem almost entirely concerned with their trade entries when in fact the more important part of trading is money management. Money is made or lost depending upon how well you manage your trades and your money, not so much on how well you enter the market (although entries do play an important role).

No trade entry strategy or trading method would be complete without a money management plan. The most important aspects of money management for a trader, are position sizing and risk reward. These are the money management components I would be worried about for my “desert island” approach.

When I talk about position sizing, I am referring to the number of lots (in Forex) or the trade volume / number of contracts / shares (stocks) etc. We are talking about the SIZE of the position you are trading. Why is this so important? Well, because it determines how much money you have at risk; the larger position, the more money you are risking. The other reason it’s so important is because properly adjusting your position size to maintain your overall 1R risk per trade, is vital to long-term trading success.

To read more about position sizing, check out my lesson on position sizing.

Risk reward is the other critical money management component. This refers to finding a trade’s risk vs. its potential reward, which you typically want at 1 to 2 or more (Reward at 2 times risk). It’s important to consider the potential risk / reward of any trade before you enter it, because whether a good risk / reward is attainable may impact your decision to take the trade or not.

Notice in the example below, the risk is 1R, where R = the dollar amount you have at risk on the trade. In this case, the risk is the distance from the entry (pin bar low) to the stop loss (near pin high) and the reward is set at 2R or 2 times risk. It’s important to try and get reward of at least double your risk so that you take advantage of winners when they come along and so they are big enough to offset your losers and still give you a profit.

In the example below, we can see what it looks like to plot out the potential risk reward of a pin bar trade. Notice I have customized the MetaTrader 4 Fibonacci tool to show risk vs. reward of any trade setup. I have detailed how to do this in an article on the risk reward tool, so check that out to learn more. Notice, this pin bar signal set off a potential 5R winner…

Daily time frames and low-frequency

A trading strategy wouldn’t be complete without something to hold it altogether, the X-factor, so to speak. For me, that is trading daily chart time frames in a low frequency trading approach.

This type of trading essentially means that we are focused on the daily charts and we are not looking to trade often, instead, we are looking for high-quality setups (which tend to be somewhat rare). What this does is increases our potential win-rate per trade and thus gives us a better chance of making money over the long-run. It also allows us to more easily keep our emotions in check and largely eliminates the potential to over-trade, which is typically the number one thing that kills traders’ accounts.

In the example below, notice the pin bar entry signals that formed at a key support level, what I want you to really notice is that this was the daily chart (as are all the other charts in this lesson and most of my lessons). If I was stranded on a desert island, I could enter this trade long and let it set for 1-2 weeks and spend that time…trying to build shelter and gather food…and come back to a huge profit. Perhaps a bit too hypothetical of an example (what would you do with money stranded on an island? Pay pirates to save you maybe?!), but the point is still valid – End-of-Day trading allows you to reduce your time commitment and helps to subdue / tame your emotional responses to the market so that you have a better chance at long-term trading success, it is a win-win!

If I was stranded on a desert island and could only use one trading approach, it would be:

  • Pin bars / tailed bars
  • Money management
  • Daily charts / end-of-day approach

It really is as simple as the three-point plan I outlined above, so stop over-complicating it.

To learn more about daily chart trading and end-of-day trading, check out these tutorials:

How to trade ‘end of day’ trading strategies

Daily chart time frame trading tutorial

Conclusion

While today’s lesson dealt in a hypothetical situation of being forced to pick one trading strategy to take to a desert island for the rest of your life, the wisdom and strategies discussed are not hypothetical at all.

The strategies I discussed above are how I trade 90% of the time in my day-to-day trading. The concepts are transferable across all types of markets, from Forex to futures, stocks and anywhere in between. They are most applicable to the 1-hour time frame and above, but as discussed, I greatly prefer the daily chart time frame to all others. So, no matter where you end up, on an island or a trading desk, remember that the concepts discussed here and that are expanded upon in my advanced price action trading course, have stood the test of time and will serve you well in not just surviving… but in thriving in all trading environments.

What did you think of this lesson? Please share your feedback in the comments below!

About Nial Fuller

is a Professional Trader & Author who is considered ‘The Authority’ on Price Action Trading. He has a monthly readership of 250,000+ traders and has taught 20,000+ students since 2008. In 2016, Nial won the Million Dollar Trader Competition. Checkout Nial's Professional Trading Course here.
  1. Royston November 28, 2018 at 2:00 am

    A very straightforward and concise article, the message is simple, keep it simple and follow your rules. Many thanks Niall

    Reply
  2. Manish November 27, 2018 at 11:52 pm

    Excellent lesson..
    Thank you.

    Reply
  3. Valerie November 27, 2018 at 6:55 am

    Learned much from this lesson. I will put it to practice in my trades.

    Reply
  4. Samuel November 26, 2018 at 11:03 pm

    Excellent very positive

    Reply
  5. kiberenge October 31, 2018 at 5:47 am

    good lesson and easy to understand

    Reply
  6. Deon Herbst October 6, 2018 at 9:30 pm

    Dear Nial,
    I would like to know when entering on a pinbar signal should one wait for the next candle to close above/under the entry value or can one take it immediately if price moves above/under the entry value?
    rgds,
    deon

    Reply
  7. Lloyd August 11, 2018 at 4:16 pm

    Thank you very for your insights, this was really a great read and I’m planning on following it🙈

    Reply
  8. Roy July 27, 2018 at 9:28 pm

    Awesome as always.

    Reply
  9. Nardo July 22, 2018 at 7:03 pm

    A million thanks!
    Nardo

    Reply
  10. Zagr July 3, 2018 at 8:29 pm

    This is amazing , a must have for every Forex trader !! thank you for sharing my friend.

    Reply
  11. Lucy June 25, 2018 at 8:49 pm

    awesome lesson, thank you

    Reply
  12. Michael June 25, 2018 at 7:02 am

    Thank you Mr Niall

    Reply
  13. O'SINACHI OJUKWU June 24, 2018 at 5:42 am

    The legend himself…!
    A word is enough.
    This article only makes sense to those who understand the language of the market and are able to read inbetween the lines. It was not until I got to that level that I discovered my own AHA moment in trading.
    Thank you Mr Nial.

    Reply
  14. Md. Munjur Ali June 23, 2018 at 3:55 pm

    When You show like chart pattern then I can undersand but when I trade everytime falior the every trade. What can I do?

    Reply
  15. Mavis June 22, 2018 at 11:00 pm

    Great Mr Nial
    I,m following you and I,m gaining a lot

    Reply
  16. MEHDI June 22, 2018 at 6:51 pm

    hi Mentor
    excellent as usual
    many thanks my mentor.
    Mehdi

    Reply
  17. Sunandh.S June 22, 2018 at 3:46 pm

    Great idea, felt to be very much useful in real time situations.

    Reply
  18. Stephen June 21, 2018 at 12:50 am

    Great lesson . I really enjoyed it. Hope more will come

    Reply
  19. Donny June 20, 2018 at 8:28 pm

    Thanks for your today’s article. Really helps and will always wait the next one.

    Reply
  20. Lovel1 June 20, 2018 at 8:14 pm

    Hi Nial

    I have been following you for a number of years and I have a great respect for both you and your trading strategy

    That said I have seen the best Price Action setup with all of the confluence in place, but miss the trade because I have been waiting for a Pinbar

    What could I do differently?

    Reply
  21. Peter June 20, 2018 at 12:53 pm

    Thanks Nial for sharing your strategys

    Reply
  22. Wesley June 20, 2018 at 9:11 am

    I like ur lessons I make more wins than losses cz I follow all ur articles they are eye opener.

    Reply
  23. jon June 20, 2018 at 8:50 am

    Hi Nigel Excellent article , straightforward and concise , well done
    Question, you never mention your trailing stop strategy ,do you use trailing stops ?
    Personally I use the middle Bollinger band on the 4 hour chart to set my trailing stop level ,any thoughts ?
    Regards Jon Kyle

    Reply
  24. Lunga Fortune June 20, 2018 at 8:03 am

    Sir you are a good teacher …thank you

    Reply
  25. Patrick June 20, 2018 at 7:41 am

    Well appreciated.

    Reply
  26. jenerali June 20, 2018 at 5:43 am

    Eye opener… end of day trading, now I will save me lots of energy

    Reply
  27. Tony O June 20, 2018 at 5:13 am

    It is powerful. The content is amazing. will use it in my trading.

    Reply
  28. Muna June 20, 2018 at 5:10 am

    Typical of the Maestro himself.

    Reply
  29. saibu olajide June 20, 2018 at 3:56 am

    Excellent article , you always hit the nail on its head. Nice one

    Reply
  30. NAWAF June 20, 2018 at 2:18 am

    Thank you, Nial.

    Reply
  31. Niko June 20, 2018 at 1:28 am

    Such a great article. Thanks Nial !

    Reply
  32. Muna June 19, 2018 at 11:26 pm

    This is typical of the Maestro himself.
    Merci beaucoup.

    Reply
  33. kwanele June 19, 2018 at 11:13 pm

    your lesson are very good. thanks so much

    Reply
  34. John June 19, 2018 at 10:48 pm

    Another home-run. Brilliantly written and full of great information, as to be expected from Nial. I have to admit, however, that the long-tail pin bar, made me think of being stranded with a tall, long-legged, beautiful woman . . . . .

    Reply
  35. Kate M June 19, 2018 at 9:56 pm

    Extremely clear and concise. Thank you!

    Reply
  36. Ogunronbi Olawale June 19, 2018 at 9:44 pm

    I always enjoy all your books very short and easy to grab thanks for this tips Nial

    Reply
  37. idogei emmanuel June 19, 2018 at 8:33 pm

    Hello Nial,
    I love your teaching generally. personally i would like to have you as my mentor, if possible.
    Thank you.
    Regards
    Idogei

    Reply
  38. Rahmath June 19, 2018 at 8:22 pm

    Hey Nial, I like it as to the point conclusion to be a simple but ultimate trading apparatus as you figure it out like on an desert island for the rest of life approach. Great Article ever.

    Reply
  39. David June 19, 2018 at 8:12 pm

    Thanks a million.

    Reply
  40. Peter June 19, 2018 at 7:35 pm

    Looks easy.
    Patients!
    Budget on one trade a month?

    Reply
  41. Adeleke Wuraola June 19, 2018 at 7:30 pm

    this is the best way to trade. price action, money management and daily time frame. that’s the holy grail right there.

    Reply
  42. Chris Hartley June 19, 2018 at 7:07 pm

    Top notch advice as usual

    Reply
  43. Olatunde Ademola June 19, 2018 at 6:53 pm

    Quite a simple, quick and straight-forward lesson. But it has to be mastered by reading across those references in the lesson.

    Well done.

    Reply
  44. Bryan Douglas June 19, 2018 at 6:47 pm

    Excellent article it has put me back on track after trying various “Holy Grail ” strategies. There is no substitute for a solid staight forward trading plan. Thanks

    Reply
  45. ERIC KUATSINU June 19, 2018 at 6:41 pm

    THIS POST IS LIFE CHANGER NAIL. AM THINKING YOU WROTE THIS POST FOR ME…I JUST READ THIS RIGHT ON TIME.

    Reply
  46. John June 19, 2018 at 6:07 pm

    I do like the keep it simple approach. I find the information quite useful, though discretionary to a certain degree.
    Thank you very much for sharing.

    Reply
  47. aria wibowo June 19, 2018 at 5:59 pm

    Thanks nial i would use these trading approach for the rest of my life

    Reply
  48. Tshepo Mahlake June 19, 2018 at 5:49 pm

    Awesome content and reading material
    Keep up the good work… lesson was fruitful

    Reply

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