There is a difference between making 800 pips (or 50 pips or whatever amount of pips) with a methodology than without one.
When you use a well defined methodology you feel well, because you know you can replicate those results in the future, you know exactly what you need to do to make another 800 pips.
It just feels good, you feel confident and comfortable.
And what about when you dont use a well defined methodology?
It’s impossible to replicate those results and you know that, and it doesn’t feel well.
At the beginning you might feel good, but when you start thing about your next trades and how to make more pips, you get that feeling that you are not doing things right…
Then you start feeling uncomfortable, stressed, etc.
Some traders change, and sadly others never do it. The ones that do change are the ones who have a real possibility to become successful traders.
Now, I believe that most of us at some point on our trading careers traded without a system (I did), but what you need to be aware of is that there is just no way to get consistent results without a well defined methodology.
What about you? Do you have a well defined methodology?
Ok, now to the point…
A 800+ pip opportunity
Last Tuesday I wrote about the GBPAUD, it was trading at an important level and was waiting for the market to break through The SF Box.
The SF Box is a concept that helps you find the currency pairs with the most profit potential, like the one we are talking about (you can learn more about The SF Box in this Free eBook).
Anyway, the GBPAUD broke through the SF Box this morning triggering a bullish market condition, but what is most important is that the next LT resistance level is more than 800 pips from where the market is currently trading at.
Take a look at the weekly chart:
Looks great doesn’t it?
Here is my trading plan
Take a look at the hourly chart:
Right now I’m thinking about a possible retracement to the ST support level around 1.6631.
Now, the fact that the GBPAUD is trading more than 800 pips away from its next LT resistance level doesnt mean that you need to hold your trade for weeks or even months.
If you are a short term trader, this type of analysis helps you realize that it makes sense to look for long opportunities, so you can open and close long trades in the next weeks/months, as long as the GBPAUD trades in a bullish market condition (above 1.6631).
If you are a swing trader instead, well, you can start looking for your long opportunity, and hold it all the way to the next resistance level.
Do you trade using a well defined methodology?
What do you think about this opportunity in the GBPAUD? Are you going to trade it?
As always, I appreciate your comments.