How Trading with the Trend will help your Results
In this video:
00:27 – The trend is your friend
01:02 – Looking at the bigger picture
02:15 – Eliminating pairs to trade
03:17 – Helps you to focus on the best likely pairs
03:58 – Looking for continuation patterns
04:27 – Link to the Forex Course
Why trading with the trend can really help improve your trading results. Let’s talk about that and more right now.
Hey traders, it’s Andrew Mitchem here at the Forex Trading Coach with video and podcast number 352.
The trend is your friend
Now, you’ve probably heard people say, “Trade with the trend,” or, “The trend is your friend. Stay away from range-bound markets,” all those kinds of things. The problem is, is how do you actually do that. How do you know that the market’s trending? And do you only know it’s trending when it’s too late and it’s already done that trend, and time you jump in, the market’s then going flat again? So there’s a lot of problems there about practically trading something that, in theory, sounds really, really simple and common sense to do. So I’ll explain what we do regarding that to help us profit from the market.
Looking at the bigger picture
So we teach our clients how to look at the bigger picture of how to look at the weekly charts. Now, each week on the membership site, and we’ve done this for years, we publish the currency pairs, the Forex pairs that are likely to be bullish through that week and the currency pairs that are likely to be bearish, or heading down for that week. Now, it does a number of really good and important things on a practical basis. One, it allows us and our clients to see where the likely bigger picture is for that pair for that week. And so when you’re trading on shorter time frame charts of daily charts or sort of smaller again, 12-hour charts or even four-hour charts, one-hour charts, it helps you to look for currency trade setups on that pair that are likely to be in the direction of that bigger picture, that weekly direction.
And what that does is it gives you the ability to trade a pair that is likely to move and in the same direction. So it stands to reason that you add more and more probabilities together with your trade, and of course you still want the good setup, first of all. You’re putting all those things together and you’re giving yourself more and more chance and probability of that being a good trade.
Eliminating pairs to trade
The second thing that it does is it eliminates a whole group of currency pairs for that week, because if we’re looking at pairs that are likely to show indecision or not moving very much, or they’re two strong currencies or two weak currencies, therefore we don’t know which way it’s likely to be moving for that week. What it does is it allows you to focus less on those currencies, or not at all for that particular week. So it actually really focuses your trading to a select group of currencies for that week and it helps you to stay away from those trades or those currencies that are likely to be range-bound or not move much in any particular direction.
So it has a double, like a two-fold benefit to your trading. One focus on which currencies are likely to be moving and in their direction; number two, these currencies are not likely to be moving much, so let’s stay from them or let’s not take a trade on them unless we see an exceptionally good setup. So double benefits for you there.
Helps you to focus on the best likely pairs
And it helps you to focus, it helps you to really narrow down and fine tune your trading. Because don’t forget that trading, after all, is about probability. Nothing is absolute. Just because we say the Euro/US dollar, for example, is going to be bullish this week, nothing to say that’s going to happen. It’s to say that this is what we’re seeing and why, and if we then see bullish setups on other timeframes, shorter timeframe charts on that pair for that week, the likelihood is probability suggests that they are going to be stronger setups because they are trading with that main direction. And so what that does, it allows us to have lower risk, higher reward to risk, higher probability trades.
Looking for continuation patterns
Now we have a great technique also for looking for continuation patterns. We also look at reversal patterns, although reversal patterns tend to be a little bit more slightly higher risk. Look really cool and very dramatic on your charts, but continuation patterns. If you can get a continuation pattern on a shorter timeframe chart that’s in the direction, or maybe, say, the weekly and the daily, and you’re trading, let’s say, a four-hour chart, absolutely magic. That is exactly what you’re looking for.
Link to the Forex Course
So I hope that helps. And I will put a link below this video on this page to the five star Forex coaching course that we offer. As I said, not only do we publish our information, but more importantly, we teach you how to do this for yourself.
So hope it helps. Once again, this is Andrew Mitchem here at the Forex Trading Coach. I’ll see you this time next week for more trading tips and … I can’t say that word … and the information. I’ll see you then. Bye.