Hello traders! This week I’d like to discuss a common misconception that new traders have – that professional traders sit and stare at their computer all day, making dozens of trades during their trading day. In addition, I’ll suggest a progression of trades you can add to your trading plan to help keep you from over trading.
During many of the Online Trading Academy classes that I teach, the question often comes up as to how many trades I take during a day or a week. Many new students are surprised when I give my answer of “between zero and three trades a day.” Their surprise is especially evident when discussing the forex market because it is open 24 hours a day, from Sunday afternoon to Friday afternoon! With all that time to find trades, why don’t we trade dozens of times every day? My answer is always, “We don’t get paid on the quantity of our trades, but on the quality.”
In this GBPUSD 60 minute chart, there are a couple of supply and demand levels drawn in, with several blue arrows indicating potential trade entries from those levels. (Trade exits have been discussed several times before, and I’m sure will be discussed again in the future!) Seeing these high quality supply and demand zones would lead us to take only about five trades in this period of time-about 10 days. Why only five? Aren’t their several other support and resistance areas, plus maybe a trend following trade or two in there? Of course! But the professional trader and the Online Trading Academy student knows to take the high quality levels, those which offer them the highest probability of being correct in a trade. Each one of the numbered trades would have potentially earned the… Continue Reading
