Why I Follow The Charts
In this video:
00:33 – The KISS approach – See it in real time from the right hand side of the chart
01:36 – News becomes my opinion but the charts are fact
02:02 – You don’t need to worry about news announcement
02:38 – Have a look at the GBP charts from Monday
03:54 – I see the trade setup and take the trade
04:56 – I’ll be teaching live in North Carolina and Washington DC in June
As a Forex trader, I follow what the charts are telling me. Let's talk about why that is right now.
Hi Forex traders. It's Andrew Mitchem here, the Forex Trading Coach. Today is video podcast number 222 and I want to talk about why, as a technical trader, I watch what the charts are telling me and I trade what the charts are telling me. It's a really important thing.
The KISS approach – See it in real time from the right hand side of the chart
As a trader, I love the K.I.S.S. approach, the Keep It Simple Stupid approach, because your technical trading or any form of trading needs to be simple. It needs to be something that you can see and apply in realtime without all the benefit of hindsight.
The charts do that for me. They tell me what's happening in the market right now on different currency pairs, depending on what timeframe I'm looking at, depending on what pair I'm looking at, I can then analyze strength and weakness against or for which currencies are showing strength and which are showing weakness right now. I can see which are showing exhaustion, which are range bound, which are trending, which are reversing, which are continuing. All sorts of different things that I'll look at in trading. But really easy to see it in realtime from the right hindsight of the chart and that's an important fact or an important point. You have to be able to trade from the right hindsight of the chart, look at what's happening right now in the market, when the candle is closed, make an opinion, and trust that opinion, and take that opinion. Because it's actual fact. It's what's happening in the market.
News becomes my opinion but the charts are fact
If I was to trade news, that becomes sort of my opinion as opposed to someone else's opinion. The charts are fact. It's where the price is right now, where it's been, its high, its low. Has it formed support at a certain level? Has it bounced at that level in the past? Is it at a round number? All these sort of things, as a technical trader, are fact because it actually happened.
You don’t need to worry about news announcement
I don't need to spend hours and hours studying the news events. I don't need to be at my computer just before a news event, waiting for it to be a better or worse announcement. I don't need to do any of that. I don't have to worry about the spreads or the charts freezing at a news announcement. None of that.
I'll give you an example. Earlier this week, we had Theresa May, the British Prime Minister, call a “snap election” in Britain. Completely unexpected. Hardly anybody knew about it because most of her cabinet didn't even know about it. Most people did not know that was coming.
Have a look at the GBP charts from Monday
However, go and have a look at your charts on the daily chart. Go and have a look at, say, like the British pound, Japanese yen, or British pound, Canadian dollar, and most of the British pound pairs. But those two, in particular, were showing very good, strong bullish buy setups on Easter Monday. Now, most years you would not expect too much decent price action on Easter Monday, especially on a British pound pair when Britain shut for Easter. However, go and have a look. Go look at your charts when you finish this video or podcast. Go and have a look at your charts on the daily charts. Look at the British pound, Japanese yen, as an example on Monday.
Then on Tuesday, when the announcement came out, the British pound shot sky high and went through the roof and it went crazy. But the charts, the day before on the daily charts, were showing a very good, strong, bullish buy pattern.
Is that luck? Is that complete and utter chance? Is that fluke? Or did I just get lucky? I'm not sure. But all I can tell you is that the charts were showing a very good, strong, bullish buy pattern, long in advance of that news announcement coming out.
I see the trade setup and take the trade
Take it what you make of that. All I know is that as a technical trader, I see the trade setup and I take the trade. It doesn't become a my opinion. Is the British election been a snap election. Is that a good thing? Is that a bad thing? A labour suddenly going to form with someone else? Is the Scottish lady going to intervene? All these different things that's happening over there. I don't need to particularly worry too much about them as a trader because the charts are telling me what's happening.
You'll also notice the British pound went sky high. Then the day after it, then stalled at that level and it came back again. Well, technically, it was going to do that because it reached a certain level, which it had hit in the past on most of the British pound pairs, and it was quite likely it was going to hit that level as resistance and then pull back again. Then it's come back a little bit. Now we're seeing bullish price action. It's likely to then go further upwards again. So all technically based and it all is there to see on the charts.
I’ll be teaching live in North Carolina and Washington DC in June
That's today's lesson. The other thing I'd like to share with you quickly is in June, on the 3rd and 4th of June, I'm going to be teaching live in North Carolina. On the 10th and 11th of June, I'm going to be in Washington, D.C. If you're in America or Canada or anywhere else and you're able to get to America on those dates, I'd love to see you there for some live, in-person tuition. There's a link below this video. If you're watching the video, there's a link below that you're able to click on to that will take you through to a free to join webinar, which will explain more about my visit to America at the end of May and early June. I'd love to see you over there to help you further develop your Forex trading.
Once again, this is Andrew Mitchem, the Forex Trading Coach. Have a wonderful weekend and I'll see you this time next week. Bye for now.