So having a good trading routine set up will enable us to become more professional and consistent about where we look for trades to form.
At the end of every week, I have a weekly review of all my pairs, checking to see if I have the correct two key levels marked, one below current price and one above. I will then highlight any really nice potential key levels where I would like a large price action signal to form.
Remembering that the market has to come to our marked key levels and we then are waiting for the price action signals, turning us into the hunters, rather than the hunted.
Forex trading is all about taking money off other traders that have got it wrong, it’s a zero sum game with money just transferring from one trader to the other. So that’s why we need to be as professional as possible and look to reap the rewards off the undisciplined traders (the hunted).
Being able to patiently wait for setups to form can be a challenge but over time it gets quite satisfying, when you start to see trades forming at your key levels you begin to realise how simple trading can be.
One point I must make though and it’s very important, if we get price showing rejection at one of our key levels but no valid price action forms, we should not get annoyed and wish we had got into that trade.
We need both the key level and the price action signal to get us into any trade.
So What’s the Best way to Hunt for Trades?
I like to use a price alert program to signal to me when a pair is at a key level, so at the start of the week off the daily charts I will set all my price alerts where I would really like a price action signal to form.
I will also monitor all of my pairs on the 4hr charts using the 10.00 and 14.00 (UK time) and then check the daily close charts at 22.00. So I am not at the charts 24/7, I just come to the charts 20 minutes before the time frames closes but remembering to only enter a trade once the candles closes.
We do not ever enter a trade before a candle closes because the market can turn on its head in seconds and a setup that was visible before can look completely different 5 minutes later. Let the candle close and be printed then set your orders.
If for some reason we get to the charts a bit late and a price action signal has formed where we were hoping, we need to stay calm. If price has already moved past where our entry point would have been we do not try to get into this trade. Let it go there’s always another trade around the corner, we don’t want to get into the habit of chasing the market.
As we have a set of very clear trading rules, the number of trades we take is limited and it can range from 1-10 trades a month. The problems that can arise from the low volume of trades taken per month, can be the inability to enter trades when they form. It’s like your killer instinct for spotting the best trades fades but the best way to keep your mind sharp and ready for those killer setups is to basically print out every trade you take and either make a trade album or stick them up on a wall somewhere, so you can see them every day to refresh your mind what a good setup looks like. It’s all too easy to forget exactly what killer trades look like and this is a simple way to get around this problem.
So this article was designed to get the point across that we need to have a set routine. We need to come to the markets at the same time each day and look at the charts like clockwork. We have to stick to our trading rules and only enter trades that meet all of our criteria.
If we can do this, we will be acting in a professional manner and have the key attribute of discipline on our side. Becoming the hunters rather than the hunted is where we can begin to really master trading the Forex.