Are you missing big trades and leaving money on the table?

Are you not consistent with your trading?

Are you frustrated with your trading?

 

I see a lot of traders imposing their opinions on the markets, guessing where the market is going to go next based on no evidence whatsoever, just their own gut feeling. If you have an opinion about the markets then you open yourself up to be wrong and to be disappointed, so the best thing to do is trade what you see and not what you think.

For example, below is the chart of the USDCAD. In the circle at the bottom of the chart is the storyteller indicator that we use for momentum trading. It is light green and in four days of momentum. Note the candlestick is green – that’s the fifth day the candlestick has been green. That is a fact. The trend is up. It’s making higher highs. That is a fact. Pro-Trading System gave a signal five days ago. That is a fact. But I know traders that I had spoken to were expecting the market to go down today.

Today there was a big economic announcement out concerning the Canadian, which was a Bank of Canada rate statement at 3:00 PM today. Below was the 3.00pm rate decision in the calendar.

Now, if you do trade from the news expecting the market to go down you are completely on the wrong side of this trend and trade. The trend is up. No matter what happened today, what rate decision was decided at 3:00 PM, the fact was that the trend is up. The rate decision had already been priced in. The only reason we want to look for a short trade is if the trend changes, then you will see the candlesticks turning red and the trend starting to shift below the moving averages and the momentum being lost to the upside.

No matter what happened with the rate statement at 3:00 PM today from Canada, the fact was that the trend is still up and until that changes I’m staying long. That’s what you see in front of you today, a trend that’s higher with a rate decision coming out. Trade what you see and not what the rate decision is going to be.

There is bigger money than us trading the currency markets, and if they want to move the markets then we will see that in a chart. Our job is to follow the big money. If we follow the big money, then this will show in our Pro-Trading System and Storyteller.

As you can see on this chart, we have a profit target up at 1.3563. I have no idea whether the price is going to hit that profit target or not. I have no opinion. The only thing I can control is my risk on the trade and how I manage this long trade. Managing a position means how I use my trailing stop order.  We decide where we put our trailing stop order from the strategy we are using. This all happens from the chart.

Say tomorrow there is huge news out of Canada, and let’s say the economy has now taken a big downturn. Ok, we’ve seen that news announcement come out, but I need to see more on a chart before I want to start shorting this market. I need to see a big shift from this up trend into a downtrend to want to get short. Just shorting the USDCAD in this uptrend is going to be very painful. Unless the chart changes, I’m staying long the market, and I am managing my trade.

Very often when I take on a new mentorship student I’m spending the first few sessions on getting them to trade what’s happening right in front of them on the chart. Turning off the Bloomberg and any other variable that is going to give them an opinion that does not reflect the price action on a chart. If you want to make trading harder for yourself, then you need to bring in more variables. Want to make it easier then take away everything that isn’t right in front of you in a chart.

Have you ever talked yourself out of a trade and seen it explode in the direction you wanted to trade, but you’re not in the trade? What talked you out of it? Did you read something about the trade? Did you speak to someone about the trade? Or did you listen to your inner voice saying not to trade this trade because you got stopped out on the previous trade? If this is the case, then you’re trading your thoughts and feelings and not what you see.

Get rid of the news channels. Get rid of outside influence. As human being we can only concentrate and focus on 5 things maximum. Research has shown that people who are highly trained in a specific task can only focus on a maximum of 6 things at once. If you’re an un-trained trader and you have 6 things you’re using to make trading decisions, then you’re going to struggle with your trading and its going to become even more frustrating for you.

 

Trade what you see and not what you think. I teach my students to relax and adapt to the current market condition. If you do that, trade from the chart, and be flexible with your trading and don’t have an opinion, then you trade much more relaxed, you seem to make much more profits, and you trade what’s right in front of you from the chart and not what is external.

Trade what you see and not what you think, and you’ll do really well.

Hope it helps, and I’ll speak to you soon.

Lee

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