FX TRADING METHOD
My trades are ag a in mana ged on the pr inciple s of
fundamental ana lysis and
s entiment. This helps me to hold my trades through drawdown; because even if the pr ice moves ag a ins t me, I have a st rong reason to rema in conf ident in my or ig ina l pos ition unle ss
the
fundamenta ls or sentiment that caused me to enter change .
For example, if the bias is shor t, but a st r ing of pos itive economic
data
el se enti rely, which then causes traders to ins tead sel l the currenc y.
These types of moves are not
problematic to long-
term trader s. They can however ser ious ly impact the prof itabi l ity of shor t-term t rader s, if the individua l s involved are not paying at tention to them.
Technical ity mat ters too
When looking to enter a new pos ition in the ma rket ,
I do
conduct limited technica l ana lysi s. This is des igned to give me the best possible ent ry point into the ma rket to ensure l imited drawdown.
When ana lysing a pr ice cha r t , a ll I am looking for is previous
Placing my trades Once
I have the t rading bia s
- either long or short - from the cur rent ma rket sentiment , I then place my trades and monitor the va r ious technica l levels for possible ent r ies .
68 FX TRADER MAGAZINE October - December 2013
buying or sel l ing zones that t raders have recent ly used to enter or ex it the ma rket from. These levels are al so known as ‘suppor t’ and ‘res i stance’ area s .
I do not use any other type of technical ana lysi s, such as ‘indicator s’ or mechanica l ‘systems’. In my opinion, t raders that depend on these methods
a lone wi l l rea l ly
s t rugg le to make a cons i s tent prof it from t rading the currenc y ma rket s .
i s is a good chance
dur ing the trading se ssion, there
released that
the sentiment can rever s e and change the bias to long . Wi th this in mind. it is ver y impor tant for traders to cons t ant ly moni tor the news feeds and rema in abreast of what is mov ing the ma rket s whi l s t t rading .
Exiting trades I
usua l ly ex i t t rade s ba sed
on the avera ge da i ly range of the cur rency I am working wi th. Put simply, if the pr ice of a cur rency reaches what recent data would sugge st is c lose to its optimum pr ice , there’s a good chance that the cur rency wi l l s top moving in that di rection for the re s t of a se ssion. I cons ider it wor thwhi le ta king prof i ts at this point .
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