Forex Tips to Help You Enjoy Your Trading
In this video:
00:25 – Trading remotely using the longer time frame charts
01:00 – Look at the daily charts once a day
01:35 – Trade for a few hours only if you wish to trade 5 min charts
02:20 – Trade a realistic amount of time
03:25 – Use the New York Close of day
04:20 – Trading the British Pound crash
05:10 – Still looking for GBP/JPY short trades
06:20 – Trade what the charts are telling you
Would you like some tips on how you can really enjoy your Forex Trading? If you would, listen up! I've got some really good tips to share with you right now.
Hi Traders! This is Andrew Mitchem here, The Forex Trading Coach. Today is Friday, the 26th of February.
Trading remotely using the longer time frame charts
I'm here on the beautiful beach of Oneroa, which is on Waiheke Island just off the coast of Aukland, New Zealand. I want to share with you some tips about how you can invest and enjoy trading. What I've done today, because I've taken trades on the daily charts, and also I’ve looked at 12 hour charts, and 6 hour charts, means that I can be here. Sit down in a café, had a coffee and some breakfast, taking my trades, and now I've got the rest of the day to enjoy this beautiful place before I need to go back and look at charts again.
Look at the daily charts once a day
The reason for that is several things. One, when I'm trading the daily charts, it means I mean to look at the charts just once a day. There's so many people I hear from that are saying, “Andrew, I'm doing okay at trading. I might be making some money.” Most people actually say they are losing money when they come to me. The problem is that so many people think the best way to trade is to stare at 5 minute charts all day. They all get together on forums and are all texting each other. That's fine, if that suits you. It's absolutely fine.
Trade for a few hours only if you wish to trade 5 min charts
I’ve got a number of clients who do extremely well by trading those shorter time frame charts. If you are to trade those short time frame charts, what I would strongly suggest you do is just dedicate an hour or two per day at the same time, if you can, and just look at those shorter time frame charts for a certain time every day. You get use to what that market is doing at that time.
Really, if you want to be trading and to enjoy it as a longer term thing to do, as a job let's say, then realistically, you are far better off … Excuse me, I need to put these on. That's better. It's so bright here that I need sunglasses on.
Really what you need to be doing is looking at longer timeframe charts. You need to be looking at daily charts, twelve hour charts, six hour charts, etc.
Trade a realistic amount of time
Realistically, that is going to give you something you can trade day after day, week after week, year after year without being a burden to you. That's one of those things that if you are trading 5 or 10 hours a day staring at charts, just think of it this way: Would I want to be doing this in six months time? Would I want to be doing this in a years time? If your answer is yes, well that's fine, but how do you then go away and enjoy the places like this and trade at the same time? The beauty of looking at those longer timeframe charts is I can plan my day around what I'm doing around my trading. I can come here and enjoy the scenery and trade daily charts.
The great thing about the daily charts is that at exactly the same time as the daily charts closes, which is 5pm, New York time. I can also look at the 4 hour, 1 hour charts if I want to or 4 hours, 6 hours, 8 hours, or 12 hour charts.
Use the New York Close of day
There's multiple different timeframe charts I can look at exactly the same time and look at those trades. As an example, today I‘ve taken two trades on the daily charts and I've placed two on the twelve hour charts also. I put those trades on and I've got my risk allocated and I've got my stop/loss, my profit target all in place. I'll come back and just check on those charts during the day, but I'm not going to be spending hours and hours just watching the screen.
I believe that's the best way of enjoying your trading, of trading with less emotion in your trading. Also, the longer timeframe charts generally get the higher reward to risk out of those trades. Spread becomes less of an issue. News events becomes less of an issue. There's many, many benefits to looking at those longer timeframe charts. Also, those timeframes become more reliable. You can see a trade; take a trade. It becomes far better where trading.
Trading the British Pound crash
The other thing I wanted to mention is over the last week or so, we've seen the British Pound crash. I've had some people say to me when I've been placing sell trades. Whether it's Pound/Yen or Pound/US, whatever it might be. Let's say the Pound/Yen as an example. People will say to me, Andrew, why are you still taking sell trades when things like we're at the bottom of Bollinger band or Stochastic are oversold or the RSI is doing this or is doing that. Whatever it might be, people are saying, why are you still taking sell trades? The reason is because I’m still taking sell trades is because the charts are telling me the British Pound is still weak. When you put it with a stronger currency, such as the Japanese Yen, then looking for sell trades is the obvious thing to do.
Still looking for GBP/JPY short trades
If you'll have a look at last week's video, I mentioned Pound/Yen sell trade even back then. Here we are, one week later, and I am still looking for sell trades on the Pound/Yen. They are still there. Sure, the indicators are saying that pair's all oversold and their starting to turn off. Therefore the Pound/Yen must rise, right? No, not necessarily because the candle patterns, the weakness in that pair, the weakness in the Pound, the strength in the Yen are all saying continue to look for short positions on the trade, On that pair. So, that's what we're looking for.
Just because an indicator, which is a lagging indicator, it's not something to be overly relied on. It's only telling you what has happened in the past. People who get too caught up on indicators are seeing an oversold situation. Don't forget that the price can continue to still move down. Ultimately, it's the price that's important. That's the two things I wanted to share with you today.
One, really consider those longer timeframe charts.
Trade what the charts are telling you
Two, study what the charts are telling you. If you're thinking, well this has to move back up; it doesn't mean it has to. The charts, the fundamentals, everything from the longer timeframe charts, the immediate short timeframe charts: if they are saying sell, just keep selling. That's not only going to give you higher probability trades. Right now, on those particular pairs, it's trading with the trend. Sure, there will be upward movements. Let them happen. It's quite dangerous in some ways to trade those fall backs and those replacements because you are trading against that longer timeframe charts. So, let them happen. Let the buyers push the trade back up if that's what it's going to do. Then, look for a great opportunity to ride it down short again.
I hope that really helps.
I'm off to enjoy this stunning beach behind me here. If you ever do come over to this part of the world, this is called Oneroa. It's on Waiheke Island, one of my favorite places in the world. I love it here and I'm off to enjoy it for the day and check my charts later.
This is Andrew Mitchem from The Forex Trading Coach. Take care, have a great weekend, talk to you this time next week.