This post is special because it gives you the structure of our complete trading system.
In this post I will introduce important factors which we, at PipsMatter, implement in our trading daily. The post is a summary of our forex trading system, but do keep in mind, the information which is located in this post, can be applied to any type of trading including stocks and cryptocurrencies.
So, this is a basic summary of our complete trading system, if you do not understand something, or want to learn more about a specific point, then I welcome you to add a comment below or just send me a direct email on email@example.com and I will happily get back to you in the promptest time.
Now it's time to begin! So lets get at it!
"Luck is Where Opportunity Meets Preparation."
We kick of the trading system with planning, we do this because planning is an essential trait you need in any kind of business, especially forex trading.
- Plan your day with a basic “to do list” for your trading.
- Have a trading plan prepared a day in advance.
- Know what the trend is and what’s driving it.
- Know the factors that can affect price (upcoming news).
- Understand cause and effect for the day. (If A happens it should lead to B etc.)
- END OF DAY: Always analyze the markets for tomorrow before you close shop for the day.
- Locate key trading levels (support & resistance).
Questions before opening a trade
- What is the worst thing that can happen? (if you are wrong)
- What do I know about this trade setup?
- Am I missing something? - How/where can I be wrong? (ask others for their opinion of the trade idea).
Trade execution: Firstly, you need to do your charting, until you don't fully understand what happened in this and the previous trading session don’t stop charting, only once you do your complete analysis don't move to "trade execution".
- Setup trend-lines, find chart and candlestick patterns. Always start on higher time frames.
- Plan your entry in advance, anticipate an entry price level and try to enter with a pending order.
- Only resort to direct market execution if you missed the best entry price.
- Find your exit before you enter and apply the risk management tool.
- Focus on entering only high quality trade setups. (6+ on the trading scale, more on this in another post.)
- Before you enter a trade is the last time you will have objectivity. (Ask yourself the questions)
- Find areas where you could compound/add-on to your trade. Don’t be aggressive with this.
- Remember why you entered the trade.
- Your goal is to manage the trade/s successfully.
- Ride your winners, cut your losers!
- If your conviction of the trade idea diminishes close your trade and look for another setup. Do not rush to re-enter.
- If price action is approaching a strong resistance/support area consider liquidating a chunk of your position (partial close).
- Always add your trades to your monthly trading log. (if you want to receive our trading log, just let us know!)
- Write down what you did good and bad on the specific trade idea.
As you can clearly see yourself, this trading system has a lot of smart and useful information, however I did not give you a single piece of technical info you got plenty of ideas which you can add to your own trading system.
If you have any questions about the system, feel free to ask!