BE PREPARED!

In my experience as a currency trader over the last 4 years, one thing that I always have to be aware of is my prepartion when it comes to my plan. Of course, I have certain criteria and parameters when it comes to my trading method but if I am not prepared to engage in market action then I am asking for disappointment to say the least. When I say "be prepared" what exactly do I mean ?, you may ask. Well, in a moment I will give you an example of one instance where I did not properly prepare myself for a profitable trade. The use of tools such as computer hardware and software have become a very good aid to the trader. One tool that I use quite often is alerts to my cell phone. It goes without saying that anything is possible so therefore, we must be ready for the market at all times. Creating alerts near our pre-planned entry prices can keep us aware of the market even when distractions occur. If, however, we think that a certain price level will not be achieved by the market and do not expect it by setting an alert, we may find that we will miss out on many good opportunities to extract profits from the market. This week, I had such an instance happen to me. I was watching the USD/CAD pair rally in the face of a very bearish longer term flow. I was prepared to trade short at 1.0840. Take a look at the 1 hour chart I posted. This was the high of the week...within a few pips anyway, but I missed the trade. I stepped away from the PC and didn't set an alert. I didn't think it would reach that level that day. WRONG! You see, I let my "thinking" interfere with my plan. Don't be like me...LOL, at least in this instance. Always be prepared and if I would have set an alert, I would have taken this trade. Lesson learned!

VIDEO UPDATE 8-27

VIDEO UPDATE 8-26

2 TYPES OF TRADES

LOOK FOR SUPPLY/DEMAND... AUD/USD

Everyone who knows me realizs that Chris Lori's methodology is the standard by which I trade.

Additionally, I have looked at other views of S/R (price action) trading and learned a few tips there as well. One such tip, of which was brought to my attention by a fellow trader Rob Manheimer is the idea of supply and demand. Of course we all know that supply and demand is what makes any market place run. Without either of them and we have a one way street. From this supply (short) or demand (long) we can learn to identify such areas on charts. One thing to look for is a consolidation and a quick departure from that area. So, if we are looking to short, we want to trade it at the base of the supply area of which it fell from, better known to many as a fractal. From the contributors of this idea, the key here is how quickly it came out of that price base. Looking at the AUD/USD one hour chart, I located one such area and just put my line there earlier today for a possible short trade. To be quite honest, I didn't think this pair would reach there today as it had already traveled quite a distance when I examined the chart. Well, as we all know, the market can do anything and proved it yet again to me today. I did place a couple of other trades and wasn't focused on this pair but wanted to post it as to how clear this was. It lined up nicely with the 79% retracement of where the move intiated downward and came all the way back up to test the base area. I have found that these trades can really offer some nice profits. Greg Crisp once describe it this way... think of that base of consolidation as linebackers on a football field and price has now become a halfback running up the field. Usually, price is going to have trouble getting through the consolidation, and in this case it is just above the price base we are looking at selling into. We can have a good stop above the consolidation and with the other factors of this pair really being overextended on the day and a key fib level, this gives us a highly probable set up.

GBP/USD Trade I MISSED BY 4 PIPS :-(

Wicks or candle bodies, bodies or candle wicks? It seems there is no true answer to this question. On strong moves the price will many times come back to the wicks of resistance/support before continuing, especially on smaller time frames, but for me, I guess I would rather get a good fill and wait for it to tag the bodies of the candles. On this particular set up, we had broken the range and I was looking for a retag at 1.6125, which was kind of in between the tops of the wicks and the bodies of the candles as seen on a 15 minute chart I have posted. Steve W. in the no brainers chat was looking at this as well. I had my limit in, but missed by 4 pips. Of course, the aftermath of this trade is beautiful, but it didn't meet my criteria so I moved on. The 1 hour chart shows the range it broke out of and where I was trying to catch the trade. There's always NEXT in this market, and as a matter of fact, took a no brainer trade at 1.6304 that paid and am currently in a short at 1.6361 of which I am in profit, so no harm no foul...still it would have been nice to nail this home run. UPDATE...I closed out 80% of my position and am hoping for this to fall back in the range.

6-24-09 GBP/USD TRADE

Today with FOMC on tap and other reports coming out, it was a little sketchy trading but as the old saying goes, "trade what you see" was in the back of my mind when I took this trade. In my mind it's all about trading at the right level at the right time and managing a trade properly. As I watched this pair, I saw the flows on the day seemed to be changing. We closed below last weeks high with a bearish engulfing candle. I scaled down to a 5 minute to see the last TSR areas and found two. The minor one at 1.6529 had more confluence with the retest of a broken trend line and 50% retrace of the last move down, so I liked that area more. With this pair especially, you can get a "bleed through" to a minor level or last dealing range. The trade set up, I took it and it paid. As of this writing it was trading at 1.6508. Two trades like this per day will do nicely. :-)