Ask Yourself the Right Questons Prior to Trading
When you sit down to trade you need to make sure you are asking yourself the right quiestions. Instead of asking “What should I trade today?” you need to be asking “Are there set-ups and signals which fit my parameters in the markets I trade?”
Before focusing in on any individual market, you should identify the direction of the different trends in the markets you follow first. Even if this is not actionable information for you, it’s good reference material. And regardless if you prefer trending markets, this exercise will help you identify pretty quickly which type of markets you’re in, and which market you’re going to be trading. If the higher time frames – daily and up — are at odds then it’s a pretty good bet you are in counter-trendng markets. It’s always good advice to avoid counter-trending markets. Here’s a snap shot of how we viewed GBPUSD coming into the U.S. session today:
The next question you need to ask is “Am I going to trade direction, or counter-trend trade?”. This means am I going to trade only one side of the market – good advice in a market showing an uptrend on it’s Daily and Weekly trends, or am I free to take trades counter to the higher time frames. If you allow yourself to trade against the grain, you need to specifially list the circumstances that allow you to do that.
And just as important as, “Which market am I going to trade?” and “Which direction am I going to trade it from?” is: “How am I going to manage the trade?” It’s key that you know which time frame you are going to take a trade on, what are the criteria for that, and what type of stop are you going to use; a hard stop — meaning the stop is placed at a specific level — or a behavioral stop — meaning certain circumstances need to be met before you exit, such as a moving average cross or a close below a particular price point.
Those three highlighted questions are a good start. It’s always better to have the definitions and answers in front of you before the big test!
We’re getting very close to launching an online training room where I’m available for several hours during the London/U.S. overlap to help clients by highlighting set-ups and identifying signals. It will be a complimentary service for our BrewerFX clients. We’re also very pleased to be able to offer GFT’s Dealbook 360 to our clients. Tighter spreads, and more education for all! For more info e-mail me direct at jnorris@brewerinvestmentgroup.com
Jay Norris
www.trading-u.com
DISCLAIMER: Futures, options and Forex (off-exchange foreign currency futures and options, or “FX”) trading involves substantial risk of loss and is not suitable for every investor. The valuation of futures, options and Forex may fluctuate, and, as a result, clients may lose more than their original investment.
nice artie, i follow from ff forum.cheers
Cheers my Man!