Podcast:
In this video:
00:26 Huge gaps when the market opened on Monday
01:23 Taken less trades on the daily charts and the shorter time frames
02:27 Aiming for a two or three to one risk to reward
02:52 Took three trades on the hourly charts and two on the four hourly charts during the live webinar
03:25 Lot of strength in the later part of the week in the NZD
Hi it’s Andrew Mitchem here the Forex Trading Coach.
Today is Friday, the 22nd of March. Welcome along to another weekly video.
Cyprus Issue Causes Gaps and Difficult Trading Conditions
Well it's been such a slow week. It’s been one of the most awkward weeks that I’ve known in many years.
We started off with the whole Cyprus debt issue and that caused some scares within the market and that was at the beginning of the week.
When the market opened on Monday there was some huge gaps down or gaps up depending on which way the pair was to trading. But just massive, massive gaps and it made Monday in particularly a really difficult day to trade.
The reason I found it difficult is because where I’m usually looking at my maximum highs and lows for the day, the opens with the gaps were in many instances had burst right through that.
And then the problem came as what are we actually going to do in the market heading into the week. Are we going to see the big gap continue?
Let’s say there’s a gap down. Are we going to see that continue down further? Or are we going to see that retrace?
In the end, most the currency pairs actually retraced and filled the gap. So where the Friday was and where the Monday open was – the price generally came back and filled the gap down in that case.
But it made trading just a really difficult thing to do this week.
Taken Less Trades This Week Due To The Market Conditions
And I’ve taken less trades this week on the daily charts and the shorter time frames than I’ve taken in a long time. The lesson from that is – you don’t have to trade as the set ups aren’t there. I found that when I was looking at my daily strengths and weaknesses analysis, a lot of those went wrong as well today. But it just meant that the set ups weren’t there because my predictions weren’t correct all the time that’s not great but it also means that the set ups aren’t there. If the set ups aren’t there you can’t take the trades.
So overall as a result I’m slightly down for the week but nothing too drastic about 1%.
So you know all that bad week, I can cope with that. Lessons really for people there:
If the trades aren’t there – don’t take them
If the market is choppy like it has been – don’t go searching for trades.
Ensure that you keep your risk low on all trades and ensure that you have a very high risk to reward when you’re taking your trade because it does mean then that a couple successful trades can more than make up for a string of losing trades.
And I’m aiming for a two or three to one risk to reward depending on the set up and the currency pair and the time frame. But what it means with a three to one is that I can have three losing trades in a row and one successful trade makes up the losses and gets us back to break even. So that’s what I mean by having a high risk to reward.
Live Trading Room Webinar for 2 Hours
Last night my time I held a live two hour trading room webinar for my clients. It was a really good webinar. I took three trades on the hourly charts and two on the four hourly charts. We also had a couple daily chart trades opened yesterday as well.
But also there’s some fantastic questions asked and people just get some really high level information during those live webinars because we’re trading live from the right hand side of the chart,
