Helping you trade the right way in 2019 and beyond
In this weekly video:
00:21 – Happy New Year
00:41 – A lot of political events
01:14 – Having a strategy and a plan
02:33 – My favourite time frame chart
03:21 – H12, H8 and H6 charts
04:01 – Take the higher probability trade setups
04:38 – Shorter time frame charts
05:33 – Forget about making pips
2019, what does it hold for you as a Forex trader? Let's talk about that and more right now.
Hey traders, Andrew Mitchem here, the Forex Trading Coach video and podcast number 304.
Happy New Year
Happy New Year and happy start to 2019. I want to discuss a few things with you on today's video and podcast that's going to help you as a trader into 2019 because quite likely we are going to see some fairly difficult trading conditions will be my guess at this stage.
A lot of political events
A lot of political events happening right now with Brexit still undecided, political unrest within Europe, issues in South Africa, China of course, and the US and Trump and difference enhancements in how the world and the market reacts to all of that. On top of that, you know there's still Russia and there's lots of things happening politically around the world that can affect us as traders whether we like it or not. Whether we're technical traders or fundamental traders, the political events do have a bearing.
Having a strategy and a plan
What can we do about that? Well, to me it's really important that you obviously have a plan and you have a strategy in place. THat's kind of a given, but for me one of the things that I stress to my clients is having the ability to look at various timeframe charts throughout the day or the week and I think it's really important. Let's discuss that.
If you're looking at say like the monthly charts or the weekly charts, of course for some people they're too big, they're too slow, they take too long to mature trades. Some people seem to think that they can't trade them because they don't have a big enough account or they can't afford such a big stop loss, which is actually incorrect, but that's a different subject. But for the me, the monthly and the weekly charts are trades that kind of tick along in the background doing their own thing, bigger picture, I'm happy to leave them in for several days, several weeks, sometimes even several months if needed, and they're sort of like … Kind of like the bread and butter behind the scenes. Still high reward to risk trades, in fact very high reward to risk.
Spread virtually has zero effect at all on say like a monthly or weekly chart and they just sit there looking at the bigger trend, the bigger picture and very, very nice charts to trade when you see good setups.
My favourite time frame chart
Come down to slightly shorter than that and that's the daily chart. Now that's still after 15 years of trading, that is still my favourite timeframe chart to trade. Why? Because I can look once a day. It's faster than obviously like the weekly and the monthly. It has more relevance to what's happening in the market right now and it's juts a great chart to trade. Once a day look at the charts, are there any good setups on the daily charts? Yes or no? If there are, take them.
Generally I find one or two, sometimes three or four a day and that's what I post to my clients on our membership site. Really high reward to risk trades, easy to place, put them on.
H12, H8 and H6 charts
The bigger picture is less of an issue, it's more riding that sort of … That movement within the course of a few days. Then you come down short a timeframe again. I've got software that allows us on MT4 to trade charts like twelve hours, eight hours, six hours, fantastic charts. Absolutely amazing charts and timeframes to trade and we trade those on our webinars and on our forum site extensively.
Take the higher probability trade setups
If you don't have that software, which by the way is only included with my course, then you can trade four hour charts and four hour charts are also really good because that allows you to look maybe sort of two or three times a day if you can at the close of a four hour chart and again, look for only the high probability setups. I think that's another lesson for this year, don't just take 50/50 trades, make sure you're patient, make sure you wait, make sure you are selective, you only take those high probability trade setups.
Now of course, trading, it's not an absolute given. It's not. You can have an A grade setup and it will still fail from time to time, that's just part of probability, part of trading. You have to accept that as part of being a trader but if you are consistent and you take those
Shorter time frame charts
A quality trade setups consistently, you will make money from trading and it won't take you much time, but if you do want to spend a little bit more time than you can go down to say one hour charts and get that very small movement within the market accepting you're in a trade for maybe several minutes, maybe an hour or two.
I personally don't trade anything lower than a one hour chart. My strategy, my system works equally as well on fifteen or even five minute charts if you really want to, it just it doesn't suit me. I like doing things like this, this is on my property here, we've put a pond in and we've planted about 3,000 native trees around the place here several years ago and to me, trading is about enjoying life and putting the two together. If you want to trade things like five minute charts, then go for it, do it, but maybe say pick an hour or so per day and do that but don't sit at your charts all day long every day sort of being trigger happy pulling … Trying to get one or two pips out of the market all the time.
That again, brings me back to the final subject, which you have heard me talk about many, many times.
Forget about making pips
Actually forget about pips, they do not matter. Look at making percentages, have high reward to risk trades, and look at the percentage that you risk on every trade regardless of the trade or regardless of the timeframe chart. Keep that low, keep that consistent, high reward to risk trades, and you will do well in 2019 as a Forex trader.
Once again, this is Andrew Mitchem, the Forex Trading Coach. I'll see you this time next week with more updates.