Month 5, Day 91 & 92 - 36-month forex trading challenge - high-probability trade set-up.
It's cold, it's wet and my discipline has not been good this week. It's amazing how a good habit can quickly be eroded if you're not careful. Flexibility creeps in and before you know it the structure and discipline you have in life is a thing of the past.
Since yesterday (Monday), I've failed to get up at 5:45am to do the morning market analysis. As a result, for two days now I've missed the 6am candle close and not finished my analysis until just before 10am.
Has this cost me financially? Have I missed out on opportunities? The answer to both questions is probably not. It's however the erosion of discipline that's the real, but often hidden cost. Let a lack of discipline creep into any area of your life and it starts to take over and spread into other areas. You see, as far as I'm concerned you're either disciplined or you're not – there is no middle ground!
Perhaps a timely message I needed to hear? A link to a podcast interview with retired Navy Seal Jocko Willink popped up in my inbox. Near the end of the interview he talks about discipline and how it's the most important thing that determines success. It's a long interview, but if you have time it's well worth a listen.
Today I want to focus on a very interesting trade set-up. The type of opportunity I'm always looking for, but one that doesn't crop up every day.
I'm long in AUDNZD (T23L) and on the 240 chart have just hit my initial target (T). I've made money on this trade and now am holding a risk-free position, where I'm looking for a signal to add.
What makes this trade interesting is that the monthly, weekly and daily charts all supported my initial entry on the 240 chart, and here's how.
AUDNZD (T23L) MONTHLY >
For the past two months price has held above the 50 SMA. Last month price tested and rejected the 50 SMA to close above.
AUDNZD (T23L) WEEKLY >
For the past seven weeks price has held (despite a number of tests) above the 200 SMA. It also looks like price has closed above and beyond the weekly trend line (turquoise). In addition, price made a higher high and closed beyond the most recent high.
AUDNZD (T23L) DAILY >
It's a similar story on the daily chart. For the past eight days price has closed (despite a number of tests) above the 50 SMA.
AUDNZD (T23L) 240 >
On the balance of probabilities traders on the higher time frames appear to be backing further bullish action. On the 240 chart (and lower) without the bigger picture it could be very easy to get suckered into a short selling opportunity at the top of the range (yellow box).
Of course this could be a viable trade, but I suspect any short-term push down will simply be an opportunity for the bigger players to add to their positions, with a short squeeze to follow fuelling a further move up.
This is the thing many beginner traders miss and was something I struggled to get my head around for a while. What really moves the market is traders being forced to exit their positions for a loss. It's actually fear (of bigger losses) and stop runs that drive the majority of moves in the market. The news often is the catalyst for this stop running. While I don't trade the news, I'm acutely aware of where the stops of other traders are likely to be. Find the loser (usually on the smaller time frames) and take the opposite of his or her position.
As always I may be wrong on my above viewpoint (and my opinion should never be considered trading advice), as in trading there is no such thing as certainty. All we have is probability, and coming back to Jocko's point earlier, our discipline!
Finally, the first instalment of week 16 is now out to view on the STG FOREX TV YouTube channel. I'm in Dubai and once again trading on the move.
I hope you enjoy the video and I'd be very grateful for a like or share please.
Is it really possible to turn £50K into £1M? Over the next 36 months I'm going to find out by trading my personal account with full transparency.
Follow my 36-month challenge to turn £50K into £1M.
Read my blog here: https://stgforextvforexchallenge.blogspot.com
Subscribe on YouTube here: https://www.youtube.com/channel/UCyGySJ5IeDjq-DIJPU7nYvw
[Please note, the information presented is general educational material and does not constitute trading advice.
Trading foreign exchange (forex) on margin carries a high level of risk and may not be suitable for you or your circumstances.
Before trading forex you should investigate all of the risks, including the possibility that you could lose more than your initial investment.
It’s important to consider your investment objectives, level of experience and risk appetite. If in doubt seek advice from an independent financial advisor.]
Since yesterday (Monday), I've failed to get up at 5:45am to do the morning market analysis. As a result, for two days now I've missed the 6am candle close and not finished my analysis until just before 10am.
Has this cost me financially? Have I missed out on opportunities? The answer to both questions is probably not. It's however the erosion of discipline that's the real, but often hidden cost. Let a lack of discipline creep into any area of your life and it starts to take over and spread into other areas. You see, as far as I'm concerned you're either disciplined or you're not – there is no middle ground!
Perhaps a timely message I needed to hear? A link to a podcast interview with retired Navy Seal Jocko Willink popped up in my inbox. Near the end of the interview he talks about discipline and how it's the most important thing that determines success. It's a long interview, but if you have time it's well worth a listen.
Today I want to focus on a very interesting trade set-up. The type of opportunity I'm always looking for, but one that doesn't crop up every day.
I'm long in AUDNZD (T23L) and on the 240 chart have just hit my initial target (T). I've made money on this trade and now am holding a risk-free position, where I'm looking for a signal to add.
What makes this trade interesting is that the monthly, weekly and daily charts all supported my initial entry on the 240 chart, and here's how.
AUDNZD (T23L) MONTHLY >
AUDNZD (T23L) WEEKLY >
AUDNZD (T23L) DAILY >
AUDNZD (T23L) 240 >
Of course this could be a viable trade, but I suspect any short-term push down will simply be an opportunity for the bigger players to add to their positions, with a short squeeze to follow fuelling a further move up.
This is the thing many beginner traders miss and was something I struggled to get my head around for a while. What really moves the market is traders being forced to exit their positions for a loss. It's actually fear (of bigger losses) and stop runs that drive the majority of moves in the market. The news often is the catalyst for this stop running. While I don't trade the news, I'm acutely aware of where the stops of other traders are likely to be. Find the loser (usually on the smaller time frames) and take the opposite of his or her position.
As always I may be wrong on my above viewpoint (and my opinion should never be considered trading advice), as in trading there is no such thing as certainty. All we have is probability, and coming back to Jocko's point earlier, our discipline!
Finally, the first instalment of week 16 is now out to view on the STG FOREX TV YouTube channel. I'm in Dubai and once again trading on the move.
*********
Is it really possible to turn £50K into £1M? Over the next 36 months I'm going to find out by trading my personal account with full transparency.
Follow my 36-month challenge to turn £50K into £1M.
Read my blog here: https://stgforextvforexchallenge.blogspot.com
Subscribe on YouTube here: https://www.youtube.com/channel/UCyGySJ5IeDjq-DIJPU7nYvw
[Please note, the information presented is general educational material and does not constitute trading advice.
Trading foreign exchange (forex) on margin carries a high level of risk and may not be suitable for you or your circumstances.
Before trading forex you should investigate all of the risks, including the possibility that you could lose more than your initial investment.
It’s important to consider your investment objectives, level of experience and risk appetite. If in doubt seek advice from an independent financial advisor.]
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