Structuring Your Trading Day
In this video:
00:28 – Do you randomly place trades?
00:50 – Create a structure if you wish to be successful
01:40 – My personal structure
02:10 – Start with the weekly charts
02:35 – Then move onto the daily charts
03:00 – Looking for bullish NZD$ trades this week –the charts tell me everything I need to know
04:45 – The news release was in the same bias as the technical were showing long before
05:30 – Look at the charts at the close of a candle
06:01 – The importance of a trading plan and structure
Do you need some help with gaining a structure for your trading day? If you do, listen up, I've got some great information for you.
Hello Forex Traders, this is Andrew Mitchem here, the owner of “The Forex Trading Coach.” Today is Friday, 10th of June. I want to talk about the importance of having a structure within your trading day.
Do you randomly place trades?
Are you one of those people who just haphazardly just places trades randomly, places, buys and sells and different position sizes, different time frames, looking through forums, getting ideas, trying that, it doesn't work, move on, all those sort of things, are you one of those people?
Create a structure if you wish to be successful
If you are, it's really important that you change away from that kind of mentality if you want to continue trading properly as a longer term investment. You see, the problem is with that is that when you have no structure you have no plan. When it comes to trading Forex with real money it is emotional, there's no question about it. Because you're trading with money, you see your account moving up and down, and you see positive trades, you get the enjoyment and the emotion and the greed comes into play. You see losing trades, you then get doubt, you're losing money. All those problems, both good and bad problems, come into your trading because you are trading with real money. It's important to have a structure in your trading day.
My personal structure
The way that I like to work with my personal structure is at the beginning of the week I start by looking at the weekly charts. Now, you can do this on a Monday depending on where you live in the world, maybe Sunday evening. You can look on the weekend because the weekly charts don't change. From when they close on a Friday they do not change over the course of the weekend so you can look at any time, it doesn't really matter.
Start with the weekly charts
When the market opens at 5 pm New York time on a Sunday, which for me is Monday morning, I look at the weekly charts.
What that does it that gives me an overall opinion of where the market is likely to move for this coming week. It's a likely direction. It's not to say it is but it gives me an overall buzz. Which currencies are looking strong, which are looking weak? Which currency pairs have got room to move this week? Which ones are looking strong, which are looking weak, et cetera? It gives me an overall general opinion.
Then move onto the daily charts
Then when it comes to each day I then go to the daily charts, during the similar type of thing but for the daily charts. That gives me an overall opinion, an overall bias for the upcoming 24 hours.
Now, of course if the daily structure and the daily direction looks the same as the weekly, then even better. I'll give you a great example.
Looking for bullish NZD$ trades this week – the charts tell me everything I need to know
This week on Monday, the beginning of the week, I mentioned on my membership site for my clients that I was strongly looking for a bullish movements throughout in the New Zealand dollar pairs. It was strong against the New Zealand dollar, it was strong against the US, against the yen, against the pound, against the euro, against the Canadian, the Swiss franc, and the Aussie, everything. It was strong against everything.
I mentioned that on the membership site and I mentioned specific trades that I was taking on the weekly charts. Plus, an overly bias on all of those pairs I've just mentioned for strength and the Kiwi dollar. Now, yesterday being Thursday, there was the interest rate announcement out of New Zealand. They kept the interest rate stable, it's didn't increase, it didn't decrease. It was exactly as was expected. There was no fantastic announcement. It wasn't an unexpected news announcement. Everybody was predicting it was going to stay the same and it did. The day before on Wednesday, I mentioned to my clients, “Specifically, I'm taking buy trades on the New Zealand US dollar pair,” and so have a think about what I've just mentioned earlier.
We now have the weekly showing huge amounts of strength in the Kiwi dollar and Kiwi against the US dollar. We then have the daily. This was Wednesday, this was 24 hours prior to that news announcement, looking for buy trades. I said, “I'm looking for buy trades plus a specific trade on the daily charts on the New Zealand US dollar.” Now we've got the weekly and the daily all showing the same direction strength. Then when it comes to the news announcement, straight after the news announcement the Kiwi dollar spiked up and it just carried ongoing. Prior to that I'd already taken the buy trade and was already out of the trade anyway before that news announcement.
The news release was in the same bias as the technical were showing long before
It was really interesting there to see how the charts and the technicals are showing us what's likely to happen. The news announcement comes out and all the fundamental people think they can jump on the buy trades. I'd already taken the buy trade 24 hours prior and a closed trade for full profit before that news even came out. Then from then on, because the news ended up in the same direction as the charts. Now, I'm still looking for buy trades on the New Zealand dollar, US dollar, so that's the structure. Have a weekly opinion, have a daily opinion, and then use that to help you with your structure, with your plan, and with your trading strategy throughout the day when you're trading with shorter time frame charts.
Look at the charts at the close of a candle
For me, I then like to look at specific time frame charts and I look at the charts at the close of a candle. For instance, if I'm trading a four hour chart I will only go and look at a four hour chart at the close of the four hours. Same with if I was looking at a one hour chart or up to a 6 or a 12 hour chart. I'll only look at the close of the candle and then I can make an opinion of whether I'm looking to take a new trade, yes or no.
I hope that helps. There's lots to take on board there but, just remember.
The importance of a trading plan and structure
The importance of a trading strategy, a trading plan, and a structure throughout the day. It stops this randomness, it stops the emotion, and it stops the haphazard gambling mentality that so many people have in their trading. Getting that right it will certainly help you to become a really good trader and a profitable Forex trader.
Hope that helps. This is Andrew Mitchem on “The Forex Trading Coach.”