I am honored to share my thoughts on our methodologies, focusing on the current technical movements and conditions of the FOREX Markets, i.e. USD traded against the major world currencies such as the EUR, JPY, GBP. Let me ask this question. In your opinion, what drives the markets first ... Fundamental conditions or technical movements?
I am sure you all have an opinion. Perhaps you have never even though about it. My belief is and what I have found that what works for me is the reliability of the technicals out performs the reliability of the fundamentals. Even though I strongly recommend, every trader must be aware of fundamental announcements, i.e. Governmental reports, Central bank decisions, interest rate changes etc. as best they can before they trade. My methodologies and rules for trading as well as risk management are based off of the technical movements (technical analysis) in the market.
If a trader wants to play this game and find long-term success, the best thing they could do for themselves is create a trading plan with a checklist of criteria for entry, and exiting positions. Creating a trading plan before entry plays a large part in avoiding emotional decisions and staying structured in your trading. After all, the worst time to check your fuel as a pilot is after the plane has taken off. The reason there are less accidents in the air, verses the ground, is due to well thought out flight plans by pilots, who create several alternative scenarios should things go wrong. I have come to the realization that, not only does Murphy's Law apply to trading in the markets, Murphy's primary residence is found in the trading charts. If any thing can and will go wrong, It will go wrong.
Trading is not a game of chance or luck. It is a solid means of creating income. It can be like playing a game of chess. At all times, there are several scenarios that can take place. The expected move of the market is usually not in the direction we thought and the out come is like playing chess with an expert. They have a habit of blindsiding you as you play with the out come of the game ending unfavorable and a lot earlier than you anticipated. Income comes to those who approach the market with knowledge and a serious level of disciplines. Safety and longevity in trading comes from properly educating yourself on how the markets work first and then knowing how to manage your risk.
Having said that let me get started with our approach in trading on the FOREX.
I don't care how you look at the market. It can only move up, down and sideways. The question is, on what time frame?
Every day the market is filled with traders who have different opinions of which way the market is moving. I have learned that one of the reasons they think and feel so differently is based on the charts and time frame they are looking at. A trader who looks at daily charts may think the market is trending up, while a trader who looks at a 60 minute chart may think the market is trending down. The fact is, they may both be right.
The question is, how are they both right? What were the signs or analysis that made them both right? It comes down to understanding technical analysis and whether your trading style is that of a day trader / scalper or long-term position trader. We have created a trading methodology that includes 4 major aspects of Technical Decision making:
- Candlestick Formations
- Fibonacci Corrections / Retracements and Extensions
- Financial Breakouts
- Trading in the direction of the trend using Trend lines
Posts
0 comments:
Post a Comment