Trade what you see not what you think
In this weekly video:
00:23 – The traders’ problem
00:41 – Trade what you see and not what you think
01:35 – Information overload and confusion
02:21 – The charts tell me where the market is moving – 2 trade examples
02:58 – Trade makes 3.2:1 reward:risk in 5 hours on a live webinar – here are the trade results https://www.screencast.com/t/s2oFlIneC
03:37 – Fundamental news is trading what you think
Do find that once you place a trade, the market goes the other way? If that’s you, you need to listen to this.
Hi Forex traders, Andrew Mitchem, The Forex Trading Coach video and podcast number 246.
The traders’ problem
We all seem to have this problem, we place a buy trade, the market goes down. We place a sell trade, the market goes up. If you have problems with your trading, getting on the right side of the market, if you have that issue, you need to listen to what I’ve got to mention here.
Trade what you see and not what you think
To me, as a Forex trader and someone that’s been trading as a technical trader for 14 years, you have to trade what you see and now what you think. It’s a really important phrase. Have a think about that, trade what you see on the charts, and not what you think is going to happen. Because the charts tell you what’s actually happening right now. Whether I think the Euro or US is gonna go up or down, doesn’t really matter. What’s happening on the charts? Are we seeing bullish patterns, are we seeing bearish patterns? Are we seeing an uptrend followed by a pullback, and then an opportunity to get along again? Are we seeing the market moving flat? What’s the Euro doing against other Euro currencies. As an example, the Euro against the Yen, the Euro against the Pound, against the Aussie, against the Kiwi, against the Canadian, et cetera.
You have to put all this together, but it’s about trading what you see on the charts right now, is the important thing.
Information overload and confusion
People get very very confused with information overload. It happens in all forms of lives, but trading is no different. You have confusing and lagging indicators, people, in my opinion, read too much into the news and the fundamentals, and people get confused on different time frame charts with one time frame saying the market’s moving up, the other time frame saying the market’s moving down. It becomes analysis paralysis problem. What do you do?
A lot of people get complete confusion and they either random guess something, or they freeze, they don’t take anything, but in the end you can almost be certain that as soon as you press buy, the market will move down. That’s just an issue that so many people have.
The charts tell me where the market is moving – 2 trade examples
For me, the charts tell me what I need to know because that’s where the market is moving, that’s where the big players are pushing the market right now.
I’ll give you some examples. Just last night on my client’s live webinar, I took two trades, they were both on the 12 hour charts, which I have the ability to trade on MT4, sort of a clever bit of software that I got. One was a sell trade on the Euro New Zealand dollar, the other was a sell trade on the Euro Australian dollar. The Euro Aussie’s still open, behind me here, and it’s going really well, it’s up at around 1.8 to one trade, or .9% account gain, with half percent risk.
Trade makes 3.2:1 reward:risk in 5 hours on a live webinar – here are the trade results https://www.screencast.com/t/s2oFlIneC
The Euro New Zealand in five hours after I placed the trade had hit the full profit target. It made an amazing 3.2 to one, reward to risk. By trading half of one percent risk per trade, that was an incredible 1.6% account gain that I made, and so did all my clients who followed the same trade with half percent risk, and 1.6% account gain in five hours by just placing that one trade on the close of the 12 hour chart, which happened to be at 5:00 AM eastern standard time, New York time. It’s trading what you see at the time.
Fundamental news is trading what you think
With fundamental news, it’s trading what you think. It’s whether that piece of news, whether it be good or bad, it’s what you think it is. Do I think that employment information’s good or bad? Really, what I think again, doesn’t really matter, it’s what the market thinks is the most important thing, and that’s why again, I am aware of the news announcements, I’m aware of the results, but I don’t trade them. I don’t let them form an opinion in terms of which direction I’m taking a trade. It’s a technical trader, the charts tell me everything I need to understand, and everything I need to know. Once again, trade what you see, not what you think. It will really help you improve your trading decisions.
Once again, this is Andrew Mitchem, The Forex Trading Coach. Have a great weekend. I’ll see you this time next week for more trading tips and information.