MY PROCESS (OF TRADING)
- INTRODUCTION:
At the outset of last week, I wrote to subscribers basically saying that new trades would be minimal because of the fact there was such a larger number of high beta economic data releases on the calendar. I saw last week as a week in which to take RISK off the table and bank both pips and $$$.
I held back on adding numerous trades and in fact I added 4 new LIMIT ORDERS based on some USD weakness, which I thought would be the “play” ahead of and into the release of the NFP data. None of these new limit orders triggered and they are still lying there, but I did throughout the week reduce RISK and remove a few trades. It was a slow week for me regarding activity but the PREMIUM SERVICE banked a positive +358 pips in the first week of April 2017. Therefore, I am of course very happy.
The week was plagued by geopolitical news, the dreadful nerve gas attack in Syria, the missile launch by “THE DONALD”, the knock-on effect of this action on the North Korean situation and the on-going relationship between the US and Russia.
Moving on…
The US job numbers always dominate the news for the week in which they are released. ADP were great numbers; the prior month’s data was re-calculated by about 50,000 jobs but the numbers came in strong. The government NFP data missed by about 80,000 jobs but the unemployment rate lowered to 4.5%.
A big miss, the USD sold off and then strengthened. The trades that I covered ahead of NFP and banked pips and $$$ on, all USD long trades, would have generated 100% more pips 10 minutes after poor job numbers… go figure. As the day progressed, the USD strengthened moving about 60 points on the day. 60 DXY points is a big move.
I am coming around more and more each month to the viewpoint of the majority of my “peer group” of traders, which is, ignore NFP day, do not add trades and let the day play out. There is a lot to be said for this approach. The chop fest of NFP can be very painful.
The FOMC minutes were hawkish and the USD sold off… go figure? We have a situation I think where the markets DO NOT believe the FED rhetoric.
Other news last week…
The UK missed on Manufacturing and Construction PMI but beat the Services PMi. At the end of the week, cable is still weaker. All these traders trying to pick bottoms, only have smelly fingers. I still maintain that with the uncertainty ahead with BREXIT it is foolish to say downside moves have been baked into the GBP/USD price structure.
Smell the coffee… BREXIT will take years to negotiate and the negotiations have NOT yet started. For God’s sake, this desire to say I picked the bottom is childish. There will be many twists and turns ahead with the odd spike and sell-off. GBP/USD is moving lower.
Draghi spelled it out in no uncertain terms for the markets eager once again to believe the bottom is in for the EUR/USD.
The market makers have the attention span of a one year old child, long may this continue, this inability to remember what they were told gives us buying the dips and selling the rips opportunities.
The RBA has not confirmed the target level of 0.6500 for fair value AUD/USD, I think it was the level muted by the NAB, but the bottom line is that the AUD is moving lower whether it be on AUD data or Chinese data.
We have some great opportunities lining up, my only caveat is that the heightened geopolitical event risk many skew things a little. Nevertheless, there is light at the end of the tunnel.
Moving on…
THE WEEKLY FX DRIVE THRU – LIVE webinars.
#9 this Monday 10th April at 5:30PM.
- To attend live – you need Google Chrome as a browser.
- You cannot view on smart phones or tablets, only Laptops and Desktops.
The “LIVE WEBINAR” link is below: –
If you cannot listen live you can check out my You Tube channel,
Scott Pickering Weekly FX Drive Thru for a freshly posted copy of the webinar, usually, within a couple of hours of its completion.
Here is the link for my you tube channel, when I get to 100 subscribers (if I get there) I can have my own personalized shortened link. If you like the style of my webinar, please subscribe. The benefits are that as soon as a new webinar is posted you are emailed.: –
https://www.youtube.com/channel/UCV-9VDnNkHjTPBzKqLqCGJw/videos
Almost there…
Congratulations to mike*******@***.com
Mike is this month’s winner of a FREE PREMIUM SERVICE subscription. I should have done the draw last week… my bad. By the time this blog is posted mike should be all set up.
If you would like to be in the monthly draw to win a “FREE 10-WEEK SUBSCRIPTION” to the PREMIUM SERVICE, valued at CAD$1,000.00, all you have to do is subscribe to receive this FREE NEWSLETTER on my website www.weeklyfxdrivethru.com On my welcome page just below my cube logo is where you complete your subscription.
- THE FX MARKET PLACE – LOOKING FORWARD:
ECONOMIC DATA RELEASES:
MY THOUGHTS ON THE WEEK AHEAD:
A busy week coming up but I think that geopolitical news will dominate proceedings: –
- CAD: The BOC meets on Wednesday and holds a press conference after the 10:00AM rate announcement at 11:15AM EST.I am not expecting anything new from this rate decision. Yes, there are housing bubbles in Vancouver and Toronto, but I think that rate cuts now will fuel these bubbles and that is the last thing that Stephen Poloz, BOC Governor would want.
The commentary however, should be interesting.
- USD: We have Consumer Sentiment data on Thursday, and that is the pick of the US data releases for me.
Obviously, the BREXIT news will be on the wires at ad-hoc times. I am however, expecting this to calm down as the 27 members of the EU do not meet to formally discuss BREXIT until the end of April and negotiations do not start until the end of May. Nevertheless, we still should be on our toes.
USD MAJORS – “IMMEDIATE” SUPPORT & RESISTANCE:
The charts below contain commentary (my thoughts and views), these are the USD major charts that are reflected in the spreadsheet above.
EUR/USD:
GBP/USD:
AUD/USD:
NZD/USD:
USD/CAD:
USD/CHF:
USD/JPY:
- THE PREMIUM SERVICE:
WHAT IS THE PREMIUM SERVICE?
The PREMIUM SERVICE is a subscriber based Forex support service offering not just trade set-ups, but a bunch of different support services that differentiates the PREMIUM SERVICE from other providers, my competitors, that operate in the same space.
Full details of the PREMIUM SERVICE and costs to subscribe plus the various trade styles and how suggested trade set-ups are communicated can be found on my website landing page at www.weeklyfxdrivethru.com by selecting THE PREMIUM SERVICE tab.
Further information can be found by clicking TESTIMONIALS, PART-TIME TRADERS and FX PROMOTIONS tabs. To subscribe to THE PREMIUM SERVICE, you will require a valid credit card.
PREMIUM SERVICE PERFORMANCE YEAR TO DATE:
MONTH TO DATE: +358 pips
YEAR TO DATE: +1,851 pips
I am still a little way behind my target. But trading is gathering momentum once again and I am still very confident of achieving my year-end target of 10,000 net profitable pips.
PREMIUM SERVICE – SUBSCRIBER PROMOTION:
“DOUBLE IT UP”
I usually run a PREMIUM SERVICE subscriber promotion at the end of the old year /start of a new year.
Because I knew that this year I would be moving home and traveling in Q2, I deliberately decided to wait, to launch a promotion around that time.
This is the biggest and I believe the best subscriber promotion that I have ever offered.
What is “DOUBLE IT UP” all about…
Basically, from now until June 30th, 2017 anyone who subscribes to the PREMIUM SERVICE through my “SUBSCRIBE HERE” tab at the top of my welcome page will have their subscription period doubled at no extra cost.
In addition, all subscriptions regardless of the date of subscribing will not start until June 30th 2017.
This means that from the day of joining the PREMIUM SERVICE you will have 100% access. This could give you up to an additional 12 weeks of membership to the PREMIUM SERVICE depending upon the date you subscribe.
This 12-week period covers the period that I am moving home and traveling, and therefore there may be days at a time with zero activity, and there will be some because I will be out of coverage and simply on vacation, but it’s all “FREE” in any case, so whatever happens, it is all a bonus anyhow as your subscription period will officially commence June 30th 2017.
Confirmation of the “DOUBLE IT UP” will be contained in the “welcome on board documents” the accompanies your subscription confirmation.
This is the best and most generous promotion that I have ever offered since starting the PREMIUM SERVICE and I hope that many of you take advantage.
IMPORTANT TO NOTE: Joining the PREMIUM SERVICE now on a 10-week subscription gives you a 20-week subscription period with THE DOUBLE IT UP promotion. This basically covers 2017 in total when you allow for the summer break and the delayed promotional start of your subscription period. At CAD$1,000 this is a great opportunity and fantastic value.
I add below my “DRIVE THRU blog / TRADING date charts for 2017, 2018 and 2019.
PLUS:
If you would like to know a little more about THE PREMIUM SERVICE please feel free to watch the following 40-minute video via the link below:
PLEASE NOTE: the above video is best viewed using a Google Chrome browser.
- PREMIUM SERVICE – SUBSCRIBER CONTENT AREA:
- THE SOAPBOX:
MY PROCESS (OF TRADING)
Where to start.
Several weeks ago, I mentioned in the blog that I had received a few questions about my process in trade selection. I stated that I would come back to this sometime in the future. That future time is now.
There is no better time in my opinion than when geopolitical events risks are high to review your trade selection process.
My PROCESS: This is NOT analysis paralysis. This is RISK MANAGEMENT in action.
If you attend or watch on You Tube the WEEKLY FX DRIVE THRU – LIVE webinar, you will know that I have a core selection of LEAD INDICATORS that I will always look at first. However, as I have stated on so many occasions, in the FX market CORRELATIONS DO MATTER and I believe these should be looked at for verification and trade confidence.
One further parameter I look at that is not on these charts is a currency pairs overall trend / direction. Are the Daily, Weekly and Monthly charts all moving in the same direction? It is often said that “the trend is your friend”. I look at trend as well.
This week, I am not writing much; all my comments will be on the charts. I know that this can sometimes be painful opening chart after chart, but this is the clearest way to give my thoughts.
I am always writing be calm, be patient, take smaller positions and place wider stops but at the same time position size accordingly to manage risk. Never are these words as important as they are right now in my opinion.
As you know correlations in all markets matter a great deal to me. They give assurance and confidence placing trades.
I really hope that you find this chart by chart approach a good insight into my thoughts on how I approach the market and a demonstration of the care that goes into my thought process prior to posting a trade set up for my PREMIUM SERVICE subscribers.
Below, I list out what I call my LEAD INDICATOR charts. They include commodities, indexes, currencies and bonds. These combined and their inter-market relationships, give me confidence when placing trades. If they correlate correctly I have additional confidence placing a trade set up or live trade. In addition, do not forget when looking at an individual currency pair to trade I also check directional trends as well.
Bear in mind the PROCESS also helps you manage RISK. RISK MANAGEMENT leads to better trading consistency and enhances your bottom line.
Below, I am looking at the current position chart by chart to give me my overview of the market. From this I have my macro fundamentals based on now versus my longer-term fundamentals.
This therefore gives me my background to the trading charts when looking for high probability set ups and Technicals to match these fundamentals. I just call it MY PROCESS.
USD INDEX (DXY):
XAU/USD (GOLD):
USOIL (WTi):
XCU/USD (COPPER):
SPX (S&P 500):
US10Y (US 10 YEAR NOTE):
USD/SEK:
USD/CAD:
AUD/USD:
AUD/JPY:
My PROCESS in a nutshell is research. It’s your money. Your broker only wants you to keep feeding your account with funds to replace poor trading.
PROCESS… DISCIPLINE… TRADE PLAN… RISK MANAGEMENT… POSITION SIZING…
All of the above blur together for me. The PROCESS helped me stopping feeding my broker accounts. It was too easy not to think properly and just be reactive with trading. It was tantamount to gambling. It is lazy not to manage your trades based upon your RISK and its lazy not to get the best possible entry price.
My PROCESS eliminates RISK. It gives me red, amber and green lights.
There is a great deal of information and data to digest from the above charts. I know that some of you will think that this is analysis paralysis. Let me write it again this is RISK MANAGEMENT.
This is MY PROCESS. This process has generated over 40,000 pips in the past four years in net profits and it works for me.
- Yes, I openly admit it is time consuming and cautious.
- Yes, I let many trades (100’s a year) pass by that I could have traded.
- Yes, it is a “steady Eddie” approach.
- Yes, it requires discipline.
- Yes, it requires a TRADE PLAN.
- Yes, this helps you with MANAGING RISK and POSITION SIZING.
- Yes, you can argue that process is slow.
- But it works.
In my opinion to trade you must have a PLAN, a PROCESS to achieve trading longevity. This PROCESS works for me and although I can still get caught out at times, my PROCESS has saved me more times than I would like to mention.
I am a serious longer-term trader that wants to be about in 10 years’ time and maybe even beyond that horizon. Without a PLAN / PROCESS I cannot see how you would achieve trading longevity.
- CLOSING THOUGHTS:
Nothing more to add here, I have said enough except,
As usual…
Always remember longevity in Forex trading can only be achieved through trading with good RISK and MONEY MANAGEMENT, and above all set your position sizes in accordance with the size of your account and allow for some flexibility.
Take care, have a great trading week.
Scott Pickering
The Pip Accumulator
Twitter: @pipaccumulator
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