At the end traders, it all comes to take calculated risks.
But what exactly does that mean?
Its simple, to take trades when likelihood of the market of moving in one direction is higher than moving over the other direction.
That’s what we call probability.
And there is also another factor…
Do you believe in luck?
Sometimes I do… and some other times I dont…
There are moments in life where we might get lucky… but when it comes to trading, I think luck is defined differently.
To me, luck in trading is: trading the right instrument at the right time.
Hey Traders, how is it going?
How did you do yesterday?
Finally the markets started to move this summer, just when I was thinking about taking a week off… And I’m glad I didnt…
Anyway, I have a confession to make…
Two weeks ago I wrote about what I thought was the easiest trade ever… I took 140 pips on a EURNZD trade.
Or maybe at that time it was the easiest trade ever…
But take a look at this other trade…
As you already know, one of our main jobs as traders is to scan the markets and try to find the instruments that have two things:
Clear S&R levels, this way we know what the market is doing and most important, what it is likely to do, and
Good profit potential, well, this one is self explanatory.
If you keep trading those instruments, you’ll get results.
Of course, sometimes the market will move against you, but it doesn’t matter, because above all, you’ll be focusing in your trading as a whole, a group of trades, not individual trades.
So you only need to make sure to win more when the market goes on your favor… and that’s it!
Forget about the accuracy of the system.
Most profesional traders will tell you that 80% of their profits, come from 20% of their trades.
That’s true!
Do you agree with me?
Here is the signal.
Today I want to talk about something very important, something that we have to deal with as profesional traders.
I think that most of us have one goal in common: get consistent results.
Getting there is one of the hardest things to do… and you know why?
Because even when you are doing everything right, the market could still move against you. That’s something that very few traders get to understand.
Lets put this into perspective.
How is your trading going lately?
You know what is what I like most about the Forex market?
Diversity.
There are plenty of currency pairs and most of the time, you’ll find a few good opportunities.
And if you have been following me for a while, you know that the key to get good results on any market is how you choose the instruments to trade.
You could be using the best entry system in the world, but you are trading the wrong currency pairs, the market will move against you.
On the other hand, if you have an average entry system, if you are trading the right currency pairs, sooner or later, the market will move on your favor.
That’s the reason I think you should spend at least 80% of your time analyzing and choosing the best currency pairs to trade and only 20% actually looking for your signals.
Remember that: 80% analyzing, and 20% actually trading.
You already know about the importance to choose the right currency pairs to trade each day.
Look, even if you have the best system in the world, if you choose the wrong currency to trade you wont get too far.
On the other hand, if you are using an average system, but you trade the right currency pairs each day, you’ll be fine in the long run.
What’s your take about this?
How do you choose which currency pairs to trade each day?
Now, these are a few of the currency pairs that I believe are trading in a very clear market condition.
The GBPUSD is trading in a very clear bearish condition, let me show you why I think its bearish:
Hey trader, how did you do last week with the FOMC Statement and the NFP report?
And you thought everything was over? I dont think so…
Later this week we’ve got a few important announcements we need to be careful about:
Among others…
This is why you should take in consideration the fundamental releases in your trading strategy…
How do you deal with them?
Anyways… This is how I’m going to trade the USDCAD
Hey traders, how is your trading going so far?
As most of you already know, tomorrow we’ve got the most important announcement of them all: The non-farm payrolls report.
And let me ask you one question: How do you deal with it? Do you still try to take advantage of it?
Those days, where the market moved 200 pips in one direction in just a few minutes are long gone.
Now it’s different. The market moves up, and down, and then again up… and most of the time it ends up where it all started.
Traders that used to place two orders (a buy above the market and a sell below the market) end up with two opened trades, a buy and a sell, and both of them in a loss.
So this is no longer a feasible strategy. Sorry.
But still, we need to learn to live with the NFP announcement and other important ones as: interest rates, GDP, trade balance, and others.
Over the years I’ve seen that most of the time, the market takes these announcements as an excuse to move in the direction of the market condition.
This is my second delivery, please let me know what you think.
Disclaimer: There are just the pairs I’m going to trade (or looking for trades), this should not be taken as trade recommendations. If you doth agree with this, please stop reading and close this window.
First of all, I’d like to remind you that we’ve got plenty of important fundamental announcements later this week:
Tuesday:
NZD Unemployment report
Thursday:
GBP Interest rate
EUR Interest rate
CAD Ivey PMI
Friday:
USD Non-farm payrolls report
CAD Unemployment report
Of course there are more than these, but these are the ones I consider have the potential to move the market.
Ok, now lets get to some charts