Much of my trade planning actually comes from chilling on the couch on the weekend, looking at charts and catching up on the analysis I like to follow on my iPad. I keep a note pad beside me and write down my trade ideas or themes for the next week. I then keep those on my trading desk throughout the following week.
During the week I am quite busy with FX Renew, FXWW and monitoring the markets, so it’s important that I am prepared. As the saying used to be when I was in the army:
“Prior preparation prevents **** poor performance”
The time I spend in the weekend puts me in very good stead.
What I do
Here is what I do in the weekends.
- First, I check the market type on weekly charts for the major currency pairs and cross-rates, indices and some stocks.
- I then look for weekly reversal chart patterns on the same instruments, as well as on an expanded list. For any that look interesting, I will note them down on my pad. This is important as it lets me catch changes in market type early.
- For my stocks, I run a couple of screens that help me find “super-performance stocks” (just in case you were wondering why I have stocks on my list below).
- I then scan ForexLive to get a feel for the markets fundamentals on my iPad using feedly.
- I check FXWW in-case I have missed anything.
- I read Marc Chandler and Kiron Sarker (who posts on the Big Picture blog).
- I also subscribe to John Mauldin’s Over the Shoulder service which I find very useful, so I read that along with his free articles.
- I will read Van Tharp’s weekly update.
By the end of it I have something that looks like this:
Crude I know, but effective!
Weekends are for planning, and week days are for stalking
When I come up with a trade idea (normally something like “buy NZD/JPY”) I then switch into stalking mode.
I’m not placing the trade straight away. Often my weekly view won’t play out, so I need to wait for an entry that lines up with my plan from the weekend.
I go to a lower time to stalk the entry. On the odd occasion I will place a longer-term trade straight away, but I find it’s generally better to wait for a low risk/high reward trading opportunity.
This is where I perhaps have an advantage over people that are not full-time in the market, as I can check the market pretty often to see if one of my entry set-ups is occurring.
You can still make changes to your plans during the week if the opportunity presents itself. For example I was talking to Sean about the NZD reversal and he mentioned that he was looking to express this trade against the EUR. So I started to look for a short EUR/NZD trade, which I managed to find from CitiBank.
Also, don’t beat yourself up if your idea plays out and you missed the entry. It happens all the time, and if you get two good trades out of ten, then it should all be hunky dory.
About the Author
Sam Eder is a currency trader and author of the Definitive Guide to Developing a Winning Forex Trading System and the Advanced Forex Course for Smart Traders (https://fxrenew.com/forex-course/). He is a key team member at premium FX services provider www.fxww.com and part owner of Forex Signal Provider www.fxrenew.com (You can get a free trial). If you like Sam’s writing you can subscribe to his newsletter for free (https://fxrenew.com/newsletter-sign-up).
This post was first published here.