Before the Trade

Before the Trade

Relax. Breath in as deeply as you can and exhale slowly. Close your

eyes; see and feel the air as it flows into your lungs and out of your lungs.

Repeat this a few times; a relaxed mind and body is key to achieving

<>peak trading performance. Getting “pumped up” to trade is wrong; avoid it.

Visualize. Go over in your mind what a good trade feels like from start to

finish… A trade signal flashes on the screen. A smile comes across your

face. The game is on and the fun begins. You know the worse thing that

can happen is a tiny loss. You know taking tiny losses is inevitable and a

necessary component of your successful trading strategy that is

consistently making you money. You confidently enter the stop loss

entry, if done stop loss and if done take profit as one trade entry on your

broker platform. You don’t enter the stop loss entry first and then enter

the if done orders because that will cause you stress and take you out of

your game. You know staying relaxed and confident means avoiding

anything uncertainty. By entering all three components as one trade limits

your risk immediately and therefore you can remain “cool as a

cucumber”. You have been practicing entering orders and know you can

do it quickly and correctly. Your not thinking about winning or losing on

the trade, your not thinking what could happen if you enter the trade

wrong, your only focusing on the task at hand – entering the complete

order accurately and in a timely fashion.

Once you have entered the complete trade and double-checked it you’re

your thinking about when it is likely the next message flashed on the

screen will come and what action will be required of you. The trade has

gone 20 points your way and you know it’s coming – take half profit. It

flashes on your screen “take half profit”. You’re smiling. You’re smart.

You knew it was coming. You confidently enter a market order to reduce

your position by half. You don’t care about the rate. It’s like using a hand

grenade or playing horseshoes, close is good, gets the job done. You

reduced your position by half and locked in some profit. You checked

your remaining existing order to make sure it now reflects the trade you

did correctly. It does. You’re order is now for half of what it was before

you closed half. All good.

You know it’s coming if it’s not there already. There it is on your screen.

Move stop on remaining half to breakeven. This feels good. You know

you don’t need to rush or get stressed adjusting your stop to your original

entry level; market is about 20 points below that anyway. You glance at

the current rate and see it’s still about 20 points below your entry level.

Calmly you adjust your stop. No worries, no rush. Life is good. You

double check to make sure you adjusted the stop correctly. You did.

Your anticipating Jimmy’s next message. If the market starts going back

up Jimmy is going to flash “close position”. You’re ready. You know the

fill will be relatively ugly. Doesn’t matter. You got 20 points on half the

position and worse case on the remaining half is breakeven. You got your

stop in at breakeven. There is nothing to stress about.

Market stops to drop and it’s 35 points from your entry level. You’re

watching the screen. You know jimmy’s going to take profit and close

the position or move the stop to protect profits. There it is, “move stop to

85”. That’s still 20 points above the current market. Easy peasy. You

effortlessly adjust the stop with two mouse clicks. The market is still

falling, now 50 points profit. You click on market order and close your

position. You look up at the screen and there it is. A message from

Jimmy “close trade”. You feel good about yourself. You took action

before the fact. Worse case was you locked in 50 points profit. You’re in

the zone. Acting independently but smartly, not emotionally. You double

check to see you have no position and your profit looks correct. It is.

Mission accomplished. You think about making a cup of herbal tea as a

reward for your fine performance.

Market continues to drop. The idea you could have made another 20

points never crosses your mind. You have better things to do with you’re

time than thinking about what could have been. You not anticipating

Jimmy doing anything right now. You know he will wait until the market

stabilizes, goes up somewhat and generates a fresh sell signal. You ask

yourself, “what did Jimmy see that caused him to sell?”. You know he

looks at 1 minute, 5 minute, and 30 minute charts to pinpoint entry levels.

You go back to the charts and see what they looked like when Jimmy

sent the stop loss entry order. What was he anticipating? What was the

trigger level? Why there?. Ok. New low for the day. That’s cool, makes

sense. But what else. Where was Swiss at the time. Oh, I see, Swiss was

already a lot higher. And Sterling was already above short-term trend

line. Look at USDCAD it had already spiked higher. How about

USDJPY. How about not, that currency is totally out of wack due to

intervention. How about EURJPY. Hmmm. Breaking trendline to

downside. Cool. Will help EURUSD go lower and that suits our short

EURUSD trade. How about EURGBP. Also breaking lower. Also

supports a lower EURUSD trade. EURCHF is a lot higher that’s not

good. Or is it. Could be the reason it’s higher is because traders are

buying USD and reaching to higher levels to buy USDCHF.

That would suits our short EUR long USD short position. Now I get it.

All the ducks were lined up in favor of EURO lower and USD higher.

That’s why Jimmy sold EURUSD when it too made a new low,

confirming it was ready to join the others and gain ground against the

USD.

http://www.lovemyprofits.com/pages/20/index.htm