1. Are your plots related to the present value?
Alright, look.
If the present market value is right here:
There’s no level in plotting each single assist & resistance and trend line you see.
Why?
As a result of by the point you get out of your commerce, there’s a low likelihood that value is more likely to attain these ranges anyway!
Additionally, having an excessive amount of “info” in your chart provides you too many pointless choices when deciding when to enter a commerce, due to this fact degrading the end result of your buying and selling selections.
As a substitute…
Maintain your charts clear and know why your strains are there.
So clear, so good, am I proper?
2. Is your buying and selling setup easy and related to the present market situation?
After you’ve plotted related strains in your chart, what’s subsequent?
Know whether or not it’s in an uptrend, downtrend, or vary.
GBPJPY on the each day timeframe:
You may see that the value has damaged out of its vary.
Now, wanting on the present value, what’s the “present” state of this foreign exchange pair?
Properly?
It’s about to be in an uptrend, so if you wish to hop onto the pattern, then having a breakout setup might be your superpower:
Need yet one more instance?
Positive.
Right here’s EURCHF on the 4-hour timeframe:
Now that’s one uneven market.
However what’s the very first thing you must do?
Right, plot out related strains!
Subsequent, what buying and selling setups are applicable for this type of market situation?
That’s proper, getting into on pullbacks (shopping for at assist, and promoting at resistance):
There you go!
3. Are there barely any conflicting details about your commerce?
To be sincere…
You’re all set with the primary two.
Nevertheless, not solely you could know when to enter trades, but in addition ignore them.
Sure, in each single chart that you will note, you could have the “walk-away” energy.
What does that imply?
It implies that whenever you’re unsure, you received’t hesitate to remain out and skip the commerce (even when it’d go in your favor).
Let me share with you an instance…
As you may see on USDZAR on the each day timeframe:
You could have noticed a pleasant breakout sign.
Nevertheless, the value is at the moment approaching an space of resistance (a spot the place potential sellers would possibly are available in) whereas the overall route of this market is in a downtrend.
So proper now, you may see that there are a number of components “towards” your buying and selling concept.
What do you do?
Right. Ignore the commerce and keep out!
Good trades occur when selections are made swiftly with out hesitation.
Keep in mind that!
So with that mentioned…
What’s subsequent?
How do you “check” this?
One phrase…
Repetition.
Sure, I’ve shared with you a number of charts at present.
However in the true world of buying and selling, each chart you see will significantly differ from one another.
It’s why I’ve shared with you a 3-step framework to make selections higher as a value motion dealer.
So, as you at the moment are taking a look at previous costs (backtesting) right here’s what it’s essential do subsequent.
Screenshot your trades and evaluate your thought-process
Taking a screenshot as you enter your commerce is useful because it encapsulates your thought course of when deciding on trades (and in addition it helps you check the framework that I’ve proven you).
Every screenshot doesn’t must be difficult for every commerce, it may be so simple as this:
Easy and clear!
Now as a basic guideline, I extremely recommend you at the very least:
- Produce greater than 100 historic trades with screenshots of your thought course of
- A most of 10 trades per market (so that you simply’re capable of be uncovered to various kinds of the market)
- Have a buying and selling software program or platform that hides costs by default (to keep away from being biased)
There you go!
However earlier than I finish…
Let me share with you a few buying and selling instruments that you should use to manually follow the 3-step framework that I’ve shared with you.