How To Trade A Trending Market
In this weekly video:
00:25 – Good strong trends in the market
00:45 – 13 trades closed and a +6% gain for the week
01:24 – How do you know if the market is trending?
02:03 – The great thing about technical trading
03:02 – I trade using retracements
04:05 – You can profit both ways – on reversal and continuation trades
04:52 – An auto trade signal service coming soon
I'm going to explain how you can trade really well in a trending market like we've seen this week. So, let's get into that and more right now.
Hi Forex Traders. Andrew Mitchem here at The Forex Trading Coach. This is video and podcast number 233.
Good strong trends in the market
This week we've had a fantastic change around in the market. We've had some very good, strong trends as opposed to last week when we had the American Independence Day, and we had non-farm payrolls. The market was pretty flat last week [inaudible 00:00:39] this week we've had some fantastic trades, some great opportunities to get into the market and ride the trends.
13 trades closed and a +6% gain for the week
Personally, I've had a great week so far. I've had 13 trades that I've closed out up over 6% on an account on a half-percent risk per-trade. Those have been across a variety of different time frames. Some weekly charts and daily 12 hour, 8 hour, 6 hour and 4 hour charts. Very little time per-day actually spent trading, but just over 6% return, half-percent risk per-trade. 13 trades. That's all. There's three trades still open behind me, they're all in positive territory. So, I'm looking at maybe increasing that to maybe 7% or 8% by the end of the week. So, it just shows what can be achieved.
How do you know if the market is trending?
So, how do you know when the market is trending? You can generally see that in hindsight after it's actually happened. In real time, you really don't know if it's trending, if it's range banned so it can reverse what's happening and that's the beauty of being a price action trader. A technical trader because I can only trade what I see on the charts at the time.
Now, I can have clues on the charts such as Bollinger Bands and things like that. When the Bollinger Bands widen when they get further apart, the market is generally trending more and it's moving further apart. When Bollinger Bands get tighter and closer together, then that means that the market is more range banned and it's flatter.
The great thing about technical trading
The beauty of technical trading is this: If the market is range banned and it's very flat, I generally know where to put profit targets and stop losses because I can figure out those levels according to what's happening in the market right now. Quite often when the market is range banned and flat, you don't actually find too many high-quality trade setups. So therefore, if the market is flat like last week, you don't see much happening. There's not a lot you can trade. You can take some trades, but very few.
This week, the market has been moving beautifully. Think trending markets. Therefore, it's been quite a lot of good setups. High-quality setups and it just gives us the opportunity to take far more trades, and profitable trades because the price action has been moving a lot, and profit targets are being hit on the vast majority of trades. So, it's of great time to be trading when this happens.
I trade using retracements
Now, I trade on retracements. So, that means I'm getting in at a better price than where the market is right now. With these big trends moving, you will get the up-trend, you get little pullbacks and it goes again, and that's a great way of trading. So, it's a continuation trade using a retracement. I‘ve also take a few trades. Now, yesterday was a great example. You'd have noticed on Thursday, a lot of the Yen pairs were suddenly showing strength. There's been a lot of weakness in the Yen pairs, then all of a sudden some strength. Great opportunity to be selling like the Euro, Yen and the US Yen. Not too far because I'm mindful.
It's against the bigger, longer-term trend, but with the strong trends, I am expecting to see some form of exhaustion and an over-brought or an over-sold area, and then look to ride the market back down again. Now that the bigger picture is up, get out of the trade fairly quickly, which we had to today, and then waiting for buying opportunities again to ride the market back up in the overall direction.
You can profit both ways – on reversal and continuation trades
So, you can profit both ways. You can profit when the market is continuing to move up and up and up. Beautiful. Love to do that, but also when it gets over-brought, and it starts to reverse, you can profit on a reversal against the main trend. So, for a reversal trade you definitely need to have all the factors lining up, all the things that we're looking for stacked up in your favour. You definitely want to do that.
On a continuation trade because you are trading with the main trend after a pullback, you can get away probably with a few less factors. More of what I like to call a B-Grade trade setup rather than having to be A-Grade because of the nature of the market will likely to continue in your main direction. So, a great week so far for trading. If every week was like this, it would be absolutely incredible.
An auto trade signal service coming soon
To help you out, what I'm looking at doing is with a client of mine. I'm looking at setting up a signal service. An auto-trade signal service where you can have your MT4 Account copied in identical fashion to the way that he is trading. One of my most successful Forex clients. If you're interested in having your account through a signal service, and auto-trade signal service, basically a mirror image. If you're interested in having your account traded by this client of mine, using identical money management, low risk money management trade approach that he takes. If you're interested, let me know. Put a comment below this video.
You can email me, you can add it to YouTube. If you're looking at YouTube, you can add it to my website. If you're looking at my website right now, or if you're just listening to the podcast, you can email me [email protected] just to express your interest in the trade copy and signal service. We're looking at getting it started up in the next few weeks, probably by the beginning of August. If you're interested do let me know and I can send further details to you.
So, have a great weekend. I'll see you this time next week. This is Andrew Mitchem, the Forex Trading Coach. Bye for now.
Click here to Register Your Interest in the Trade Copier Service