When I sent out the survey last month, along with short term trading being a focus, a number of you mentioned trade direction as a key thing to improve on and letting profits run. There were of course many more things mentioned which I will address over the year, but I'll just say a few things about these two.
In terms of direction, whether long or short term, I always recommend starting with higher time frames.
Higher time frames are king.
Levels on these time frames take longer to form so they are stronger. Given that they are stronger, price travels much further from them. Big trends start and end at higher time frames levels so it makes sense to use them to get an idea of direction. Whether you like it or not, you are all trading the higher time frames. You are either trading with them or against them and personally I would rather trade with them.
You don't have to conduct all your analysis including entries on the large time frames but they offer significant clues as to where price might be headed. Let's look at some trades from last week.
If you haven't read last weeks post then you can find it here. In short I said to watch for a potential rally on AC and price rallied from daily demand. I said to watch for a rally on GJ and price rallied. I didn't take trades on all the others pairs as I like to pick and choose the best ones. I'll run through a couple to give you a better idea.
GBPJPY - Long
This should be familiar to most of you by now but here goes. Daily demand and profit potential identified so look for longs. (This was also demand on the weekly which was very important)
Daily momo seems to confirm direction
After a slight retrace, the 15m gave us demand to trade from. If I'm not at my laptop, I use my phone.
Trail the stop to hold for the trades potential
When you see something different, get out.
EURJPY - Long
This one was from weekly demand.
Then we saw the direction confirmed.
An engulf on the lower time frames added confluence
After a little stop out, I re-entered in time for this:
CADJPY - Long
I think you get the picture so I won't comment on this one.
I hope you found this useful.
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