How to Plan your trades.


I have had lots of questions asking me how do I decide which trades to take and just as important, those to leave alone. As you will have discovered by now, it is not unheard of to get signals on 6 or more pairs all at the same time on the 4 hour charts.

Plan The trade. Trade The Plan
My method for planning my trades is the same on the daily and 4 hours charts. A point to remember; If you are only able to trade the daily charts there is a possiblity of a 4 hour trade even if there isn’t a daily one. Make sure you check the 4 hour charts as well at the close of the daily.
  1. 30 minutes before a candle is due to close go to each chart and look to see which pairs have the possibilty of a trade. Ignore those that won’t qualify due to the rules ie If there haven’t been enough red candles followed by a closing green, then no long trade is possible and vice versa for a short trade.
  2. Have a look at the size of the candles. Is the trend correct etc etc
  3. Lets say we now have 5 possible trades.
  4. Now take the possibles and see which pairs correlate (explained in the advanced rules). For example if there is a possible trade on the NZD/$ and AUD/$, these 2 pairs go in the same direction 80%+ of the time so its almost an identical bet. Similarly the chf and the euro/$ go in the opposite direction 80%+.
    Don’t take them both at the same time. Decide which one has the chance to make the biggest gain; smallish candles preceeding candles, no major psychological level near eg gbp coming up to 2.00 would be less likely to break.
  5. Now we have narrowed it down to 3 possibles from 5.
  6. Wait for the candle to close and the signal to arrive. It is very tempting to get in early before the candle closes and make some extra pips. Don’t do it. I never enter a trade just before the close of a 4 hour candle. Often a candle will race in the opposite direction in the last 5 minutes.
  7. Now we have a signal for 3 pairs. We have already decided which ones we will take (if the signal arrives). Take it. Place your stops and 1st target. Open the other 2 as quickly as possible.
  8. If by the time you have placed the 1st trade the price has moved more than a few pips on the 2nd and 3rd trades. Leave them alone. What I do is keep watching the 15 minute chart to see if price pulls back to this area. Then get in if it does. You can also place a forward order to get in at this pre determined price.
  9. Manage the trade by the rules. If the signal says 25 pips profit take 25 from the signal. If you got in 5 pips too late, only take 20.
  10. Take the rest of the day off. If you have made your minimum 20 pips target and stop is to break even on the 2nd. Chill
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