Personally I prefer to trade from weekly & daily charts, which requires a bit more planning on a weekend BUT very little time actually trading during the week. However if I don’t see any potential trades then I will trade using our 1 hour strategy which requires a different plan and mindset.
Trading from weekly & Daily charts isespecially useful for those who are trying to trade around a day job.
I spend a few hours on a Sunday reading various financial & trading websites including, but not limited to http://www.reuters.com/
I don’t read many articles in too much depth or I would be there all day! I also don’t pay too much attention to the “expert, talking heads.” One will come out and give many reasons why you should short the $USA and the very next one saying why you should buy it!
I am looking at headlines and trying to get a feel for what the sentiment is in the markets, right now. I am always aware of what the previous week (s) data and information flow has been. I am now looking to see if the general consensus supports that view or not.
I also have fellow mentor, former lawyer, Judith Wakers’ research notes to fall back on, which saves me a ton of time!
Judith loves the fundamentals as it took her from being a losing rookie trader to a full time professional.
Using a combination of fundamental & technical analysis she increased her average win per trade from around 30 pips to over 300.
She shares her analysis with the team & members on a Sunday evening.
I then look at the calendar of scheduled news and data releases for the week ahead. I use Forex Factory’s Calendar which you can find here: http://www.forexfactory..../index.php?page=calendar
I pay close attention to red flag news and upcoming speeches by central bankers and or major financial politicians. Any of these people or events can cause huge fluctuations in price and traders need to learn how to tiptoe around them.
How to Make a Weekly Forex Trading Plan
I never trade the news. The major financial institutions have the best technology, best information at their fingertips and highly skilled analysts helping them to make very quick decisions. They can often be in and out of a news related profitable trade before a retail trader has time to push the button! News events historically have also been abused by stop hunting, rogue brokers. All told I think news trading is too volatile for the average home-based trader and is best left alone.
What I do is avoid the major releases like FOMC & NFP altogether. Similarly, interest rate releases and subsequent news conferences are highly volatile and I leave alone. I wait for the dust to settle and only then go back into the markets.
Remember the prime goal of a trader and especially one who is trading other people’s money, is to not lose it.
Once I have a bias, $ strength or weakness and have checked the calendar I go to the charts and do my technical analysis.
With technical analysis I am looking for the major areas where the price has reacted before and will probably do so again. There are no guaranteed outcomes when trading. You can make the best plan in the world and it doesn’t work out sometimes, what we are aiming for is to have probability on our side.
If I am looking to long (buy) a pair then I need to make sure that there is nothing above it to get in the way and reduce my chance of making at least double the amount I am going to risk.
In the weekly $/Yen chart below you can see how price at the moment is around 50 pips below a MAJOR area of resistance. Price has repeatedly bounced off this line and probably will do so again. Unless I can find a strong area to place my stop less than 25 pips away I will never take it. I rarely take trades that will give me at least 100 pips profit anyway.
The final thing to take note of this is image was taken a couple of days before NFP (USA jobs data). If price does break and close above this area on a daily candle THEN I will be interested to long. If it does not then I will ignore it or “swing trade” it to the short side.
On the other hand below is a great example of a trade set up that I recently showed members in advance.
The $USA was gaining strength versus the Canadian $ and in an up channel. The channel was over 330 pips deep from the bottom diagonal line to the top one. At point A I only needed a 40 pip stop below the trend line and dark blue ema and my target is the 200EMA at B, 280 pips away.
So a reward of 7 times the risk. THAT is the way to trade profitably.
I also use support & resistance in all its forms, to pick the target and determine where the stop needs to go. You can not calculate the risk, nor the lot size unless you have all 3 determined in advance.
In the video below I show you how we made over 200 pips in 4 days from pre-planned trades. I showed members on the previous Sunday what I was looking to trade and why based on my analysis. Then in Tuesday morning’s live training session, I went into more detail.
The net result? We made over 200 pips profit from analysis done the previous weekend. It required very little trade management and the trades were chosen by using a mixture of technical & fundamental analysis.