Thursday, September 24, 2009

BE PREPARED!


In my experience as a currency trader over the last 4 years, one thing that I always have to be aware of is my preparation when it comes to my plan. Of course, I have certain criteria and parameters when it comes to my trading method but if I am not prepared to engage in market action then I am asking for disappointment to say the least. When I say "be prepared" what exactly do I mean ?, you may ask. Well, in a moment I will give you an example of one instance where I did not properly prepare myself for a profitable trade. The use of tools such as computer hardware and software have become a very good aid to the trader. One tool that I use quite often is alerts to my cell phone. It goes without saying that anything is possible so therefore, we must be ready for the market at all times. Creating alerts near our pre-planned entry prices can keep us aware of the market even when distractions occur. If, however, we think that a certain price level will not be achieved by the market and do not expect it by setting an alert, we may find that we will miss out on many good opportunities to extract profits from the market. This week, I had such an instance happen to me. I was watching the USD/CAD pair rally in the face of a very bearish longer term flow. I was prepared to trade short at 1.0840. Take a look at the 1 hour chart I posted. This was the high of the week...within a few pips anyway, but I missed the trade. I stepped away from the PC and didn't set an alert. I didn't think it would reach that level that day. WRONG! You see, I let my "thinking" interfere with my plan. Don't be like me...LOL, at least in this instance. Always be prepared and if I would have set an alert, I would have taken this trade. Lesson learned!