Will your trading strategy work in the future?
In this video:
00:35 – Trading webinar question
01:30 – My strategy continues to work after 13 years
02:19 – Trading price action correctly
02:57 – The trouble with most trading strategies
03:25 – The way we trade
04:00 – The Daily charts
05:07 – Future proofing your trading
05:45 – Contact me for future podcast questions
Will your trading strategy still work in the future as good as it does today? It's an interesting question, so let's talk about that and more right now.
Hey, Forex traders, Andrew Mitchem here from the Forex Trading Coach with video and podcast number 332 coming to you from the beautiful town of Nelson in the top of the South Island here in New Zealand.
Trading webinar question
Now, I've been here for this weekend. On Wednesday night I held a webinar for non-clients for people who are interested in finding out more about trading and asking questions about my trading strategy. And a guy called Craig said to me, “Hey, Andrew. With the impending global financial meltdown, especially if the US dollar collapses, will your trading strategies still work?”
It was a really interesting question that Craig asked. Craig obviously doesn't know my entire strategy, but it was an interesting question, I thought, and a very valid one, because what's the point in looking at buying a course or a strategy that may not work in the future?
Now, Craig, I don't know whether the impending global financial meltdown's going to happen or if the US dollar's going to collapse. Who knows? That was just purely Craig's comments there.
My strategy continues to work after 13 years
But what I do know is this, is that 13, 14 years after I created the strategy that I still trade and teach today, it's still working equally as well today as it did back then. And that's a really important factor that nothing's changed. We haven't changed anything, we haven't added anything. It still works equally as well.
And when you think about the last 13, 14 years globally, politically, economically, we've been through all sorts of ups and downs and turbulence within the markets, recessions, all sorts of things, and for a strategy still to work today as good as it did back then and has continued throughout those 13, 14 years gives me massive confidence to say that it will continue to work.
Trading price action correctly
When you think about this, is that when you understand good price action or how to trade price action correctly, if there's nothing happening in the markets, then you generally don't find there's a great deal of trades or not good high quality trades showing.
Conversely from that, if there's good price action, there's lots of activity, then you generally find that that's a day or a week that you see lots of price action in the market and lots of good high quality setups. And if you trade that way, you're basically trading with what's in front of you at the time. It's what the conditions are at the time.
The trouble with most trading strategies
The danger is is if you're trading a strategy that relies on a line crossing over another line and different things like that is that that can happen at any stage. So first all you don't know when to trade, you can't re-plan around that happening, and also that can continue whether the market's flat or massively active, those sort of moving averages, let's say, as a very basic example.
The way we trade
So the beauty of the way that we trade is that with using closes of a candle and using price action, we're looking at only trading once there's good momentum, good price action in the market that's then giving us good setups.
Now, to continue on from that is that we never know in advance at the beginning of the week which timeframe charts are going to show us better or no trade setups, and that's why we trade a variety of different timeframe charts. It's why we trade a variety of different currency pairs.
The Daily charts
As an example, the last few weeks the daily charts have had just some amazing chart setups, great high reward to risk trades. This week the daily trades have not been that good. We've had a few setups. They've not been particularly like what I call A-plus grade setups, but they've been okay. And most of them have not worked.
However, our weekly chart trade this week is just going amazingly well. It's a sell trade on the Euro Pound. If you go and have a look at the Euro Pound weekly chart setup, you will see that that's worked extremely well this week. And the other timeframe charts, the shorter timeframe charts, and when I say shorter we generally go sort of four hour, six hour, eight hour, 12 hour charts, have worked particularly well, but for some reason the daily charts have not.
That's the beauty of price action. If there's nothing showing on one timeframe, you probably scale up or scale down and find something suitable on another timeframe. If one currency pair is not showing very much there then you'll probably go to other currency pairs and find something is showing well.
Future proofing your trading
So, that is a really good way of trading. It's a way of trading with the current conditions and it kind of future-proofs yourself in terms of what might happen in the future if Craig is right here with impending global financial meltdowns. Who knows? The US dollar collapsing. Who knows?
But what we do know is if we trade properly, we trade well, we trade with low risk, we trade with high rewards risk trades and we trade with the high quality setups only when they show, then when that happens the strategy works and you do very well from it. So I hope that helps.
Contact me for future podcast questions
If you have any questions like this interesting question from Craig, any questions, any comments you'd like me to talk about on future videos and podcasts, just send me an email: [email protected]
I'll see you this time next week. I'm off to enjoy the beautiful sunshine here in the middle of winter here in Nelson. Glorious Day. And I'll see you this time next week. Bye for now.