I don’t hedge but martingale has put me in a lot of mess. If you ask me, each of them is a defeatist strategy.
I see adequate preparation as the heart of successful trading. Thus, as part of my preparation for the week, every Sunday I prepare my charts for all the pairs on my watch list and do a weekly top-down scanning of the pairs to see the 2-3 pairs that have the greatest potential for my successful trading during the week.
My trading model is what I see as trapping the market. Central to trapping the market is defining the boundary and boundary conditions under which you want to watch, stalk and trap the market. In the process of doing this, I use price-turning zones or levels and see how price performs across the time frames within the boundary. Thus, as a short-term swing trader, I often use 4H chart for my set-up time frame, but I scan lower time frames for efficient timing of trade entry and trapping of price action.
Just wanted to say that I really like what you are writing here. You are offering some sound advice about trading here that should be very useful to all who have ears to hear it and minds to observe it…
Appreciated. Trade safe.
To track the market, using a few complementary indicators will help. For example, you will be able to know how reliable a market move is, whether or not there will be a follow-through. Thus, rather than having a lot of redundant indicators, you choose at most three: e.g. one for direction/trend, another for momentum and, perhaps, another for volume. Trade safe.
During each weekend, I do an analysis towards trading in the ensuing week. This weekend, my analysis of the pairs on my watch list showed that only three of the pairs have the potential for the trade I would like to enter. I will be looking for a bearish trade on EURNZD and GBPUSD; although the potential for USDCAD is favorable, I am stepping aside for clarity until later in the week.
To trap the market, track the market with proper analysis first. Then wait for your setup to materialize. Never chase the market, never chase price. Trade safe, trade well.
1 Like
[B]Tip:[/B]
If you would effectively trap the market, patience is king. You would need to first analyse and understand the market, define your trading boundaries and conditions, plan your trade and decide the right strategies based on the market - then patiently wait for the best opportunity to strike.
[B]Tip:[/B]
What is the primary target a trader should have? Consistent improvement in trading for better and profitable results.
I have just concluded my weekly scan and analysis ahead of this week’s trade opportunities. Among the 10 pairs on my watch list, two are clearly trade-able - AUDUSD and EURUSD - but I’m already in the market on them. Apart from that, I have EURJPY, GBPCAD and GBPNZD which I will be tracking for possible trade opportunities during the week.
It is very important to do a thorough pre-week scan and analysis (say each Sunday), leading to clarity on which pairs are tradable and may be traded, the directional bias on each of them, and the trading strategy and approach to adopt. However, it is equally important, in my humble opinion (imho), to do a mid-week update, particularly where fundamental shake ups have taken place or where directional clarity was not mixed or was uncertain at the point of the pre-week scan.
Thus on the evening of Tuesday of each week - latest at the close of the NY close - I check one or two pairs among the few I selected for the week for necessary update in directional bias, trading strategy or market structure/order flow change/clarity.
I have just completed my mid-week update, to accommodate any significant change that is impacting on my sentiment for the week on the three pairs I chose to trade this week. I was clearly in the wrong on my initial analysis of GBPCAD but I will still keep an eye on it. Here is the update on GBPNZD.
GBPNZD: The initial price action on Monday favoured a northward move, which offered an early profit on my long trade. Since then the GBPNZD has been largely ambivalent. Current GBP post-brexit situation couple with generally stronger USA fundamentals favour a bearish mode but constrained by the lack of positively correlated kiwi fundamentals, a reason why GBPNZD has not moved much southwards. In fact, technically, GBPNZD has barely moved below the daily trend line I drew on Sunday and there is potential for a break to the upside as the technicals on daily and 4H time frames are mixed/ambivalent. I will track price action for possible trade on the north; much like good GBP fundamentals during the week will provide the impetus. [B]I may be wrong.[/B]
Building a profitable trading edge over the market is central to consistent trading success. However, it will not come easy. For me a beginning step was when I came to really see my biggest trading weakness and then started learning how to turn it to an advantage as it seems fundamental to a trader’s long-term success.
I am now doing my pre-weekly scanning of the pairs on my watch list. After the first step, which involves scanning all the 10 pairs for trend, I have picked five for further analysis. This analysis will involve at least five subsequent steps leading to developing a brief trading plan for each pair selected for possible trading opportunities in the week ahead.
My pre-week analysis indicates a stepping aside on EURUSD until later in the week. The order flow context is rather choppy/unidirectional for the swing trading style/strategy I employ.
Following my weekly scanning and analysis of the pairs on my watch list today, I will be looking forward to trading opportunities during the week on three pairs: EURJPY, GBPJPY and GBPUSD. There is a question mark on a fourth pair, USDCAD, which I need to watch further during the week.
I had entered a buy stop order on GBPUSD about 19 hours ago. Price has remained rather ambivalent since then which, for me, is not healthy for swing trading. So, buy stop order cancelled. Trade safe.
My decision to cancel the buy stop order turned out to be a great decision as the GBPUSD plummeted to the downside following an interest rate cut to a record low.