After months of putting and sharing generic tips that I apply in this blog, I plan to be more specific in sharing my methods starting this month onwards. The intention as usual, apart from sharing, is to ensure that I will remember every single thing that I do so that it will become a second nature while executing my trades.
Reason is, just like driving a car, I strongly believe that something that you do repetitive enough in a systematic way will be stored permanently under your subconcious mind, and hence will indirectly turn you into a discipline trader who trades base on informed and analytical decision, not gamble.
As a start, perhaps the best topic to start with is Psychology preparation prior to putting in any trade. This is what I do daily:
1. I always ask this first: Am I fit to trade today? Yes or No. If the answer is YES, then...
2. What time can I trade today and for how many hours? Normally I trade the US Session onwards until London close, that is 8pm till 12am local time here, around 4 to 5 hours daily since I am mainly a scalper.
3. Later I decide upfront on how much am I willing to risk in case all my trades go bad, and where to locate my stop loss on each pair that I plan to trade. Normally the best place is always around the pivot, resistance or support area. Another way is to place it on the previous high or low of the daily and hourly price movement.
4. I check the upcoming news for the day from FX Street. Trust me, this is a MUST. You don't want to be caught up in a sudden jerks of price due to your unawareness of the news release. At the same time, always check the bloomberg breaking news from time to time as there are news that are not in the calendar that could cause a major breakouts or spike in the price movement. Easy said, just watch out on what's going on around the world.
5. I decide on which pair to concentrate today. Normally I only trade EUR/USD, GBP/USD and USD/JPY. I do not plan to trade any other pair at the moment yet. Later I will concentrate on a pair that has the highest possibility to move according to my analysis.
6. I read various analysis' from Action Forex, FX Street as well as the one provided by FXCM (Trade Signals, Technical Analyser and SSI). Just don't read too much since you may get mix up in generating your own trading idea. I read their analysis just to get the general idea since later I will trade logically using my own analysis and believe.
7. Final preparation; no matter what I did or read above, I look at the current price movement and analyse the strength base on the daily range. This is vital too since though you may clearly seen that the trend is bullish (for example), it is worth to wait and be a little bit more patience in getting in at the best possible price. The best way to do this is to enter at the 1 hour interval since I realize that major continuation or reversal always happen during the hourly interval. The way to do this will be shared further in my upcoming posts.
8. After doing all the above and feel satisfied with my own analysis, all I do next is just wait and do nothing until the market calls me to come in. Sometimes, when I am 50/50, I just place my trades on my demo account and see how it goes. Trust me, after doing this fx trading for some times now, I develop certain feel for the market in which though inexplicable, you just know whether your open position is good or otherwise. One more thing, I just realize that trading for the sake of trading will not do any good to my account so the ability to hold oneself from trading proves to be more important than anything else.
Well, I guess that's all for now. One more thing, I just spent almost USD500 shopping some of the so-called top notch EA's or robots available in the market (to name a few - FapTurbo, EA Sharks Ultimate 5.0 & Megadroid).
I ran these robots for 3 weeks already on my various demo accounts and you know what, I am not saying they are not good, but I still prefer to trade manually since trading manually will give me maximum control and satisfaction, provided I can control myself... hehe.
Next Topic : My Own Money Management System
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