In the final chapter I want to talk about my trading day, explaining how I set my charts up each day and what I do on an ongoing basis and how I have my lifestyle control my trading and not the other way around.
The charts open for the new trading week on a Sunday at 5pm EST New York time. For me living in New Zealand that ranges between 9am and 11am on a Monday morning. Just before the new week start, I’ll go and look at the charts and I place the weekly charts on my platform and I go through each currency pair on the weekly chart time frame and I look at where I see likely strength or likely weakness for the upcoming week based on the completion of last week’s weekly charts.
I may also decide to take a number of trades based on the weekly chart trades. If I don’t take trades based off the weekly charts, then what I’m doing is getting an idea for the likely direction for the week. This doesn’t always mean that I’m only going to trade in that direction but it’s giving me the basis, if the candle pattern is strong enough and it’s in the right part of chart, to give me an idea as to where the upcoming week may head. If I do take trades based off the weekly charts I’m generally placing them as pending limit orders so I’m buying below the current price or I’m selling above the current price. When the market opens up I place those trades on my charts.
The great thing with the weekly chart trades is it means you can take about ten minutes once a week to scan through the weekly charts and if there are any setups showing I can simply place the trade, walk away and leave them. Again it comes back to having controlled risk. You’ll notice with the weekly chart trades I’m not talking about how many pips I make. It’s all to do with the percentage risked as opposed to the percentage gained, exactly like any other time frame chart. By having a low risk money management approach, what that does is it allows me to take trades on the weekly charts just as easily as I could take a trade on a five minute chart. I know the risk associated with the trade and it’s X percent of my account and in my case that’s usually no more than 0.5%.
After placing any weekly chart trades, I then scan through the daily charts looking for potential trade setups. Depending upon the setups I might take 2 or 3 trades if they’re strong enough. If the setups are not strong enough to justify a new trade they can still give me the likely strength and weakness for the upcoming day for a particular currency pair.
The great thing with that is when I’m then looking at taking trades on the shorter time frame charts, which for me are generally the 4-hour charts and the 1-hour charts, they are giving me a bias and an indication of the likely direction that I’m preferring to take trades in on the shorter timeframe charts for the upcoming day and for the next 24 hours within the market.
What I also do before the market opens is I’ll scan through a news site and the two sites which I use are Forex Factory and Forex Peace Army. I’ll look at their news events calendars to see what is being scheduled during the next week and what I also do is I print out a copy of their calendar and I highlight the high impact news announcements that could affect the market for the upcoming week. I also highlight any public holidays that could affect the main Forex pairs.
For example, if there was a public holiday in Japan today I would be very careful and cautious if taking any trades on the Japanese Yen. Most likely I won’t take trades on a pair that would be affected by a public holiday. What that does is that it helps keep you out of trades that may show good setups but just don’t work. There are plenty of other days to be trading within the year, you don’t need to be trading those public holiday days if there’s a likelihood that it could affect the way the market behaves. So once I’ve done that I then wait for the market to open to up I place my trades for the day the first day of the week.
Now generally on that first day of the week which is during my day time the market is usually pretty quiet so I don’t really don’t look at the charts too much on a Monday, not until at least the European session on the first day of the week, which for me is Monday evening.
For the rest of the week I then look on the 4-hourly charts as and when I can and during the European session, I try to look at the 1-hour charts when I can. When trading on the 1 hour charts, I only need to look at the charts at the completion of the candle. I don’t stress about having to be there all the time especially on the 1-hour charts but I do try to trade the 4-hourly charts as much as I can in my day time. This does not mean to say I’m getting up in the middle of the night every 4 hours; I don’t do that at all.
This means for me based on this side of the world I don’t generally trade too much in the US session but of course if you can trade those times then by all means look at your charts at that time as the US session does have a lot of activity during most days of the week.
The following day which is a Tuesday morning for me, my day to day routine is to get up, look at the charts, see what has happened overnight which is in to the late European session and the US session. I’ll look as to how my trades are progressing if I still have daily chart trades open or 4-hourly chart trades open and really then it’s just a case of normal family life - get the kids up, get them fed, get them off to school and then between 9am and 11am depending on the time of the year, I’ll then go and look at the daily charts for Tuesday and again I’ll take the best trade setups if there are any showing. It might take me 10 minutes to scan through all 26-pairs that my broker currently offers looking for setups. Some days I have no good setups and other days I might have 5 or 6 good setups it just depends purely on what’s happening in the market.
I generally find Wednesday, Thursday and Friday would be the days that I find the most setups on the daily charts as the new week is by then well and truly under way and you generally find that by that time we’re getting some good price action heading into the midweek and the end of the week.
When I’m taking the daily chart trades, I generally place one half of my position at the market, entering straight away at the market price and the other half of my position at a retracement area using a limit order. So I do that every day of the trading week and then throughout the rest of the week I look at the 4-hourly charts throughout the day and the 1-hourly charts during the European session.
To ensure I don’t miss any 4-hourly chart trades I simply set my mobile phone to send me an alert 5 minutes before the completion of the 4-hour chart. The great thing with that is that it means you can go often do other things. I can do plenty of things with my family and enjoy a good lifestyle while making my trading fit in with it. It’s really important I believe not to make your trading control your lifestyle, it needs to be the other way around because trading has to be enjoyable. Yes, I’m making good money from my trading but it needs to be enjoyable and it doesn’t need to tie me to the computer charts all day and night.
This style of trading is what suits me because I do prefer to trade the longer timeframe charts, I like to trade less, I like to take high probability trades with low risks and high reward to risk on each trade. It’s not that you can’t trade 15-minute charts, 5-minute charts, 1-minute charts. I only trade those shorter time frame charts every two weeks when I’m holding my live trading room webinars for my clients but during the rest of the week I really don’t trade those shorter time frame charts hardly at all.
This is what suits me. What suits you may be completely different. I’m not saying that the shorter time frame charts are not good to trade as they really are good for some people. It’s what suits your trading personality that’s the important aspect here to establish, finding out what suits you and what works for you, what time of day works for you. It’s really important as a trader to get that this correct and to establish what suits you.
If I travel then generally I’ll just trade the weekly charts and the daily charts. I don’t stress about trading the shorter time frame charts if I have other things to do. If I’m at an event with my children and I can’t trade during the European session one day, it doesn’t matter because more than likely I’ll already have trades open that day from the daily charts and maybe from the 4-hourly charts.
You don’t have to be there all of the time. Don’t stress if you can’t make it to the charts every single hour or every four hours or even every day as it really doesn’t matter. There’s a phrase that I use and its this “There are no prizes for trading more” and it’s really important to understand that comment. You don’t need to be taking trades all the time to be doing extremely well from your trading.
As far as trading results go, my aim is to look to make somewhere between a 1% to 2% gain on average return per week. Sometimes I’ve had way more than that sometimes I’ve had less than that but if I can consistently make somewhere between 1% and 2% by taking a quarter to a half of one percent risk per trade then I’m more than happy with that. Take those figures you expand on them over the course of a year and that results in somewhere between a 50% to 100% percent return on my account per year and I haven’t even taken into account the power of compounding yet. I’m just talking about an average weekly gain. When you then add compounding onto that return you can see how very easily your account can soon start to grow and that becomes again the beauty of trading Forex.
I’m not glued to the computer screen all day long; I have controlled risk; I can control when I trade; I know any upcoming news announcement that may affect my trading. I’m not trading those news announcements but I’m aware of them. The news announcements create an interest for me as to what is happening around the world more than anything. I know if I’m trading on a 1 hour chart not to take a setup if there’s a news announcement coming up soon that could affect that currency. So I don’t trade news, I don’t scalp the market and I’m just aware of the news as an interest to give me an overall perspective of what’s happening around the world. As I’ve mentioned, I believe it’s important to try and get into routine with your trading. It does help but again don’t stress if you have to travel or if you’ve got other things to do which means you might miss trades.
So I hope that by reading this book it really helps you with your trading. I hope it gives you an understanding of how you need to have your own plan within your trading and find out what works for you the best. Now on that note I’ve just seen a good trade setup develop on my charts so I’m finishing now and I’m off to take that trade.
Thank you for reading this book. I hope you’ve really enjoyed it. Please have fun with your Forex trading, it’s a fantastic business.