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Success leaves clues, and over the years as an educator and coach, I can confidently say that there are several things that traders who achieve positive trading outcomes appear to do, that less successful traders are not doing. One of these is to have a daily agenda or habits that go alongside direct trading activities with the aims of getting and staying in the optimum “state” to trade and to facilitate consistency in action. Here are 5 observations to consider… #1 – Check in on your potential “trading state” before you look at the market We have discussed in previous articles the advantages of making decisions when you are in an optimum state to do this.

I highly recommend you read my 10 Ways to Manage Your Trading Psychology – a Blueprint for Development post if you haven't already. If one constantly interacts with the market, consistent and constructive action may be more difficult. Therefore, logically "checking in" where you are before you start your trading day becomes even more necessary.

It may be there are things going on in your non-trading world that are significant enough to be a justifiable distraction and require attention, or you are not in the best of health. However, it's important to realise that the markets WILL always be there. There are times when it is good to trade and times when you should give yourself permission not to. #2 – Re-align with trading purpose and plan at the start of your trading day Your trading purpose, or your reason for trading, is your start point for developing strategies that are consistent with your trading objectives.

Your trading plan is your “guiding light” in making this purpose happen. Every trading decision should relate to these, and without it, traders have a lower chance of creating the trading outcomes they desire. In the “heat of the market”, it is easy to get “sucked in” to the price action of open trades as you see your trading capital moving up and down.

Without the explicit instruction of a pre-prepared plan, it becomes more difficult to maintain the consistency and clarity that it is already characteristic of experienced traders. Touching base, or re-aligning with these at the start of your trading day offers a reminder as to the why and how you will think, decide and act in the hours to come. #3 – Make a judgment on what to expect Every day the market throws up different challenges, different price movements, volatility, and new economic information, influencing overall market sentiment. Advanced traders take the time to make an overview judgment on what is happening and adjust decisions on time-frames traded, risk level or chosen strategies, accordingly.

For example, one of the possibilities we have discussed in a previous article and in Inner Circle sessions is the concept of adjusting risk level according to the strength of the signal or underlying market conditions. What we mean by this is that if our normal tolerable risk level is 2% of our trading account capital on each trade as a standard and we note increased market uncertainty indicated by higher price volatility, but identify a potential opportunity for entry, we may adjust that risk level to 1% in light of this observation. Having a system to make a judgment prior to trading allows this sort of approach to be taken, making it an unquestionable attribute of an experienced trader. #4 – Check in with yourself at key points during your trading day Your emotional state can, and often will change throughout your trading day, primarily dependent on either the results you are getting or your judgment on performance.

We are all familiar with the concept of ‘revenge trading’ if a trade, or series of trades move against you. This is at the extreme end of capital damaging emotional state. Equally and more insidiously dangerous is a succession of wins or losses where your consistency may waver, either originating from a belief that you can perhaps “feel the market” or begin to doubt yourself as a trader.

A potential solution is to have it written in your plan that if either of these scenarios is the case, then you could move away from the market for a period of time, enabling you to reset, re-align and revisit the market later on with a refreshed sense of purpose and plan. #5 – Review your day including completion of journaling tasks Formal review of performance is a critical part of on-going trading development. We have discussed many times the benefits of keeping a journal record of your trades, within not only measure outcomes, but the decisions that were taken to create these. Completing your journal daily may identify common threads of both things that went well (and you can mirror going forward) as well as potential areas for development.

Experienced traders who do this give themselves that important chance of sustainable growth which appears to be a key factor in long term trading outcomes. To summarise, you always have a choice as to whether you integrate what you read into your trading. In this case, it is the choice of having a daily agenda that can contribute positively to your long term trading strategy.

Every week I run education webinars offering innovative and comprehensive learning across all aspects of trading knowledge and practice. If you would like to expand your knowledge and build your confidence as a trader while also connecting with other Forex and CFD traders, register here.

One of the most common questions we are asked on some of the webinar sessions we run is “What timeframe might be best for me to trade?”. This slightly longer article than we would usually write, seemed merited to provide some detailed “food for thought” as it appears to be an important issue for many. This is not something we can answer for you as an individual, as which timeframe(s) you choose to trade is a personal choice, but the purpose of this article is to put forward some of the considerations that you should contemplate as you make this decision for yourself.

Generally speaking, and to offer up some sort of definition for the purposes of this article, traders choose to trade: Shorter (fast) timeframes intraday (1-15 mins) Medium timeframes intraday (30mins-4 hourly) Longer (slow timeframes) daily (4-hourly-daily) There are usually two common motivations that may lead the trader to consider a change in the timeframes they are currently trading: a. Having difficulties “fitting” trading around other life activities. b. Believe that changing timeframes may produce improved results (or same results with less impact on lifestyle).

Before moving on further, and particularly if in the “b” group ask yourself this key question: Should I be considering a timeframe change at all or are there other priorities I should have? Before considering a timeframe change, we assume that you have the following in place: You have a written trading plan/system that specifies entry, exit and position sizing criteria AND the timeframe(s) you are currently trading. You look at the market before making any decision related to entry (including pending orders), initial risk minimising exit (stop loss), profit targets, and any trailing of your initial stop.

You consider economic data/announcements as part of your decision-making processes and understand the different impact that different types of “news” can create. You have a method through which you can determine the success or otherwise of the decisions you make including that of timeframes traded (e.g. a trading journal). If you do not have ALL the above in place, then perhaps your priority may NOT be deciding whether to change timeframes.

So, with a tick placed by the above, if it is right to consider a change in time-frame, there are commonly three overview factors to consider. 1. Your access to the market (screen-time – how much and when). 2. Flexibility (how frequently you can touch base with the live market). 3.

Competence and understanding relating to the practical trading implications of any timeframe including trading set ups and risk management including position sizing. Let’s explore these in a little more detail with FOUR key considerations: 1. Technical considerations Here is the good news…The following are relevant in ANY and MULTIPLE timeframes: Chart patterns Candle information Indicator usage in entry and exit systems If you are moving to a longer time-frame consider: Differences in key chart values (e.g. volatility).

You need to adjust your thinking in terms of what is the norm for the timeframe you are looking at. So, for example a 40 pip move in a 4-hourly chart may be the normal value whereas on a 15-minute chart this would be a massive move. Key data times.

There are critical points in the day where there may be several economic data releases in a relatively short time-span. These usually coincide with the opening of relevant equity market open. So, for example most of the significant data out of the US will be released within a two-hour window straddling the US stock market open (8.30-10.30 US EST).

Hence price action seen on charts, will usually be at its most active during these times. Get to know these if you are trading longer term timeframes. 2. Risk and position size considerations: With faster timeframes, traders generally: • Open larger positions with the trading idea of a smaller Pip move. • Have a tighter Pip stop loss as even smaller movements impact significantly on dollar outcome. • Are aware the even “less significant data” can create more relative market “noise” and need to have this factored into trading entry and exits decisions.

With slower timeframes, traders generally: • Open smaller positions with the aim of a larger Pip move. Tighter Pip stop loss as even smaller movements impact significantly on dollar outcome. • Have a wider stop-loss as smaller movements irrelevant and so there is less chance of being taken out by price movement “noise” within a longer price move. • Are aware that relative major movements are from major data points (and therefore need to learn what these are). 3. Practical considerations Firstly, look at the time you have to invest in your trading (and this may be subject to negotiation with partners etc., and of course with what else is going on in your life).

If you are planning ring-fencing screen time, for example a couple of hours per day, then giving the attention to trading shorter timeframes may be more viable. If it difficult to access larger amount of “block” time but short frequent touch base with the market is possible, then longer timeframes may be more suitable. Generally speaking, to give an example of how the latter may work in practical terms, you may have a trail stop strategy that you wish to adjust at the close of each candle/bar.

If this is the case, then if you can check in hourly, an hourly timeframe may work for you. Four other things to consider: Even if trading longer timeframes some trader choose to use a shorter timeframe to ‘refine’ entry, if trading a daily chart. After entry, as stated previously you should subsequently stick to the longer timeframe for decisions.

If trading shorter timeframes, many traders use a daily chart for the “big picture” to identify long term trends (to avoid trading against these) or to identify longer term key price points (e.g. well-established support and resistance). There are some trading approaches that are promoted as being daily approaches e.g. Inside bar.

Holding costs are associated with daily chart trading and of course you can touch base with your account manager for further clarity). 4. Mindset Considerations: Any article on just about anything to do with trading would not be complete without some reference to the psychological and subsequent behavioural aspects of the topic. Here are some of the common mindset issues to consider: With shorter timeframes: • It is easier to get sucked in to watching price movements (i.e. ‘staring’ at the P/L column continuously) that may evoke emotional decision making rather than be based on your trading system and CHART price action. • Short term trading is perceived as being more “exciting”.

If you find this resonates ask yourself are you really trading for excitement or for profit? • Your business is “done for the day” when you are finished trading which means you are not “distracted” by the market when other life things should have your focus. With longer timeframes: • Not generally “peddled” as an advantage of FX trading by the “gurus” out there. Therefore, it may feel that to trade daily charts is going ‘against the norm’ and may feel uncomfortably strange at first. • If you have traded shorter timeframes previously, it is a habit you may have to work at breaking and resist the temptation to take a “sneak peek” at shorter timeframe charts, and alter your decision-making. • There are many “experts” you will see wheeled on to give an opinion on CNBC, Bloomberg etc that have a prediction about what may happen in the future to any currency (or index/commodity if trading CFDs).

Remember: a. These “experts” are not your ticket to riches but are there to make interesting TV as well as provide some insight. Indeed, you will often find contrary experts brought on at different times in the day.

Their opinions should be viewed as you would with any “hot tip” i.e. thank you ‘Mr Expert’, but does it fit my trading plan? b. There is a greater temptation to move away from one of the golden rules of system trading i.e. “Trading what you see rather than what you think” (or what the experts think)”. • May occupy thinking throughout the day and so may be more difficult to “let go” and give the focus to the rest of your world outside trading. And to finish….

What happens next is down to you! If you haven’t tried to trade longer/shorter timeframes why don’t you test it out (but see point re, should it be your priority). Trade as you do now LIVE and trade different timeframe on demo.

Compare not only the results but the impact on the rest of your life activities. Journaling may help. You may make the choice to trade multiple timeframes.

If you do then you should make sure this is reflected in your trading plan/system and what market circumstances would lead you to trade which timeframes. We trust that this has been useful, even if the outcome is that you make the decision to continue to trade your current chosen timeframes and of course please feel free to share this article if you think it would benefit others (it’s easy just click on one of the social media links to make it happen). Finally, if you are not part of the growing GO Markets ‘Inner Circle’ community, where you can access weekly education sessions, you are invited to join our Facebook group "Time For a Change?

Considering Longer or Shorter Timeframe FX and CFD Trading " is written by Mike Smith - an external Analyst and is based on his independent analysis. He remains fully responsible for the views expressed as well as any remaining error or omissions. Trading Forex and Derivatives carries a high level of risk.

For more information on trading, check out our forex trading webinar.

Using profits targets in trading, irrespective of trading vehicle chosen (e.g. Forex, Index/commodity CFDs, Share CFDs), is commonly discussed as potential exit strategy. The reality however is that these are often executed with a lack of consistency with ambiguity in trading plan statements.

This article revisits profit targets and outlines some key issues to consider in your trading plan. The terms “take profit” (or T/P on your trading platform) and “profit target” are interchangeable. What do we mean a profit target?

Like a stop loss, (though obviously related to taken a profit rather than a loss), a profit target is a pre-set price point (decided on entry) at which you have chosen to exit. The main two considerations as a trader are: When do I use a profit target? Where do a place it?

When do I use a profit target? Essentially there are three choices namely never, always or intermittently. These invariably tend to match three distinct trading styles of the individual trader.

Those who NEVER use a profit target tend to be shorter term traders (less than 30 mins time-frame) who are “in the market” for a set period of time during the day and will close all positions at the end of their ring-fenced time. Ideally there with associated use of a trail stop system. Those who ALWAYS use a profit target go across multiple time-frames, still using an initial and trail stop but often either use: Key price points i.e. placed above the next support if in a short trade or below the next resistance if in a long trade.

A multiple of risk e.g. if using a 2:1 ratio then x2 the risk level. Using this ratio as an example if your initial stop is placed 10 pips below entry in a long trade then the profit target is placed 20 pips above entry. Even if one is using key price points as your norm, this may be useful in those situations where no previous technical landmark exists e.g. when a price hits a new price high.

Those who PARTIALLY use a profit are commonly those who will trade without one whilst watching the market but when they move away will put one in place e.g. when holding a position overnight. So, your first choice is simple, which of these three is a ‘fit’ for you. Where do I place it?

We have spoken previously about the need to be specific in your plan to facilitate consistency and measurement. As with any other component part of your trading plan, your profit target is no different. Here are some suggestions: If you are choosing a key price point as your guide to placing your profit the be specific regarding how far away.

Please note: to use ‘Pips”/Cents/Points may not translate across time-frames e.g. in technical terms 10 Pips above a support in a 5 minute time-frame is very different relatively speaking to 10 Pips on an hourly chart. Therefore, it may be worth considering something like an ATR (or fraction of) which takes into account the standard movement in a particular time-frame e.g. 0.5 ATR above an identified support level. If you are choosing to use the concept of risk/reward ratio as previous discussed, then your placement of profit target is dependent on the initial stop level you set.

Then this becomes a simple maths calculation. So, absolutely clarity about how you are placing this initial stop e.g. technical landmark is the specificity that you need to work on. And finally… Bear in mind of course that: Other exit strategies that are part of your plan for open trades such as your initial and trail stop or your approach when there is an imminent economic announcement are still part of your decision-making, even if you have a profit target in place.

These need equal unambiguity when articulated in your trading plan as with your profit target. Once you have ‘planted your flag’ and of course traded your specific plan with a critical mass of trades, you are then in a position to test different parameters e.g. alternative distances away from a key price point. Your mission from here is to decide whether and how you are going to use profit targets and subsequent to write placement details in your plan...and then of course follow through with the discipline to trade it.

Mike Smith Educator and course facilitator GO Markets Disclaimer The article from GO Markets analysts is based on their independent analysis. Views expressed are of their own and of a ‘general’ nature. Advice (if any) are not based on the reader’s personal objectives, financial situation or needs.

Readers should, therefore, consider how appropriate the advice (if any) is to their objectives, financial situation and needs, before acting on the advice.

When we first start to trade, or subsequently (as a more experienced trader) when we trade a new symbol or system we are often “excited” as we see a “hope” for better results. We often forget that the development of expertise in other areas we have in life (think about what you do in work now for example), you must invest time, effort, learning and making mistakes (providing you acknowledge and learn from them) to develop. This is not an overnight transformation, rather it may take several weeks if not months before you feel confident in your knowledge and skills.

It is bizarre therefore that we should expect anything different with trading development. To be clear, we respect and commend those who take the leap and move from demo to live account. After all, a demo platform ( you can trial a MetaTrader 4 or MT 5 demo account here ) will serve you in learning how the platform works, how to add indicators and get used to how markets move.

However, it is only when you start to have some “skin in the game” and are trading YOUR money, albeit with tiny positions to start with that you learn the most important lessons in trading and develop the appropriate mindset to begin to think about trading larger positions. All that been said, we see time and time again new traders or those trading a new system exhibiting three cardinal sins of the developmental trader, and decide to trade: a. With positions that are too big b.

Short cutting learning and system development c. Strategy skipping (i.e. moving from new system to new system) without meaningful measurement as to what works for you (and what doesn’t) or indeed whether the problem is YOU failing to trade a system religiously. These are all symptoms of impatience, of wanting to get massive returns quickly and without putting the hard yards in at the front end.

Remember this… The purpose of your trading when you start trading a live account should not be huge profit, rather it is to develop the confidence in your system, consistency in action and the measure whether what you are doing could be improved. Although it may seem strange to suggest, it is this and not, in the early stage of trading, the money (and level of profit) is most relevant in your potential lifelong career as a trader. It is through patience, and adhering to that initial purpose that you can gain sufficient confidence and competence to trade larger positions (after all it is just moving a decimal point to go from 1 mini-lot to a standard lot) and put the right foundations in to move forward.

Exercising patience to have the right things in place will serve you well for a potential lifetime of trading, to be impatient may mean your trading lasts but a few weeks or months. It is really that simple. Mike Smith Educator GO Markets Disclaimer The article from GO Markets analysts is based on their independent analysis.

Views expressed are of their own and of a ‘general’ nature. Advice (if any) are not based on the reader’s personal objectives, financial situation or needs. Readers should, therefore, consider how appropriate the advice (if any) is to their objectives, financial situation and needs, before acting on the advice.

Obviously, one of the major differences between trading shares or share market derivatives (e.g. Share CFDs and Options) compared to other instruments such as Forex and Index or Commodity CFDs, is the daily set market hours and the risk of potentially significant differences in price between the close of one trading session and the opening of the next. GO Markets offer the opportunity to trade both Share CFDs on the Australian and US equity markets on your MT5 platform.

For reference, those of you that are new to this as a trading vehicle, the ASX opens from 10am to 4pm Australian Eastern time, whereas the US equity markets open from 9.30am through to 4.00pm US EST. Why gapping occurs Focusing on the ASX as an example, there are many events and economic announcements than can occur in the 18 hour “gap” between close on one day and open the next, as well as often the Australian markets responding to what has happened in the US “overnight”. This additional information is what creates the “gap”.

You will already have in your plan the need to be especially cautious prior to earnings release (or similar) for any companies due to report. Such releases commonly occur outside of market trading hours. This, more than any other situation, can create major ‘gapping’.

Recognising this is the case, many traders avoid entering trades in companies where this is imminent. Hence the inclusion of finding this out prior to entering any trade as part of your plan seems logical as part of your risk management. So, what can you do?

Although we cannot predict what will happen there are potentially “clues” that can be tested and may help in decision making relating to the market risk, (and so potential for major gapping). Remember these are “clues” only particularly relevant to short-term share CFD trading (and may be less of an issue for those intending to hold for the long-term). Such “clues” may help you make decisions on: Which direction to trade (e.g. long or short entry opportunities) Position-sizing approaches (e.g. if there are major announcements one may choose to enter smaller sized trades For efficiency in terms of your time, it could be argued that this “daily ritual” should be performed prior to looking at specific stock charts at the start of any trading day.

Here are five clues that you may choose to consider: 1. ASX trend including closing candle (daily chart) Experienced traders generally support the concept of trading with the trend as a common approach. Also, the closing price of the day is also thought to be the most important in terms of the buyer/seller “battle”.

Bear in mind also, that by its nature, a movement in the overall index reflects the sentiment towards the shares that comprise it If you accept that this is an approach that you wish to employ in your trading, then logically you should only consider a “long trade” when the overall market is in uptrend and short trades when in downtrend. Additionally, it is generally accepted that a close in the top third of a candle is more likely to see follow through than if towards the bottom of the candle. 2. US trend and futures direction and degree of potential movement (Daily chart US500) If one subscribes to the idea that the ASX will commonly reflect the performance of US markets, then there are already “clues” as to what may happen through looking at the US futures.

Although these can and usually do change as more information is released, again logically, you need to ask the question as to whether trading against what the futures are telling you could happen is worth integrating into your trading plan. For example, this could look like “If I am looking at a long trade on the ASX, I will position size half of the level which I would normally do, if US futures are down in excess of 0.3%”. 3. The VIX index trend The VIX index (sometimes termed the “fear index”) reflects implied volatility of options (so is forward looking).

It is commonly recognised that there is an inverse relationship between movement in the VIX and the S&P500. Hence, a movement up in the VIX could be interpreted as an indication the market is getting “anxious” and so there may be a sell off (and visa versa ). Some have also suggested that on some occasions you may see a movement in the VIX prior to the market move.

Whether this is the case or not in reality is up to your judgement. Again, you need to make a choice as to whether to integrate this into your risk assessment of the market as a whole and articulate in your trading plan accordingly. 4. Economic data As with other trading instruments you will already be familiar with the fact that short term market sentiment may change with the new information, or expectations, from major economic data.

Remember equity markets may respond differently in terms of both relevance and volatility to other instruments e.g., a perceived increased likelihood of an interest rate cut for example following a stronger than expected employment report will be bullish for equity markets but negative for the relevant currency. Also, there may be economic data normally of low impact to Forex but may impact on specific sector shares significantly e.g. New home sales figures may create little disturbance to currencies in comparison to other data points but may have a significant impact on home building companies. 5.

Specific sector information An obvious example of this would be that every Wednesday morning in the US the EIA release oil inventory figures showing either a draw-down or increase in supply. If this moves from that which was expected, then there may be a noticeable move in oil price. So, logically it makes sense to exercise more caution if considering an energy stock CFD on a Wednesday in trading on the ASX.

In summary… As is the case always, effective risk management is a critical cornerstone to achieving positive trading outcomes. Risk management interventions may be either to consider whether not only to enter a position (or exit an open one), but also the size of the position you choose to enter. Although, we are not aiming to be prescriptive, after all it is you who make the choices in ALL your trading decisions.

We have discussed some things for your consideration in managing the “gap” with share CFDs. It is now over to you, to make decisions as to what is right for you, and of course to articulate this within your own trading plan. Please drop an email with any questions or comments related to the session to [email protected] Mike Smith Educator GO Markets Disclaimer The article from GO Markets analysts is based on their independent analysis.

Views expressed are of their own and of a ‘general’ nature. Advice (if any) are not based on the reader’s personal objectives, financial situation or needs. Readers should, therefore, consider how appropriate the advice (if any) is to their objectives, financial situation and needs, before acting on the advice.

Market sentiment towards a currency pair, and hence price, changes when new information comes into the market. The most common situation that creates such a change is the release of economic data. These are planned in terms of timing to theoretically offer no market participant an advantage over another market participant.

Economic data revised For those of you who are less experienced traders it is worth pointing out three important points: a. Some economic data releases have the potential to make a greater impact on market sentiment than others. It is beyond the scope of this article to explore this in detail, however major data points include for example GDP, jobs data, CPI (inflation measure), and interest rate decisions. b.

It is not the number per se but rather the comparison against what is expected. There is a market consensus “baked into the price” already, a projection in other words, as to what is likely to happen to major data points. So, it is the closeness or otherwise to this expected figure that is the key factor.

A big miss in either direction is likely to have a far more significant impact on market sentiment than a figure that is at, or close to, expectations. c. Also, the importance of a data point is to some degree relative to the timeframe you are trading. For example, in a shorter-term position where you position higher but are aiming for a smaller Pip move to take profit, economic data is more important, than perhaps when trading a daily chart.

As a Forex trader, you have one key fact in your favour is that the time of these announcements is entirely predictable. What this means to you is that you can make a choice and “programme” into your trading plan potential action(s) when faced with the prospect of significant imminent data release. Your trading choices Assuming you already have a defined exit general strategy in place for open positions that includes having a trailing “stop” should a trade move in your desired direction, you have THREE potential choices to make.

Accepted good general trading practice would be that you “plant your flag” in one of these as your standard. Once you have planned and implanted this, then you can prospectively test the other two, to determine which is the optimum individual “fit” for you as a trader. Your three choices are: A.

To close any open positions that are likely to be impacted by the data release to remove the risk of loss from your existing dollar result in the position. Although reducing downside risk you are also risking losing fast upside potential, should price move quickly in the direction of your trade. B.

To do nothing new i.e. adhere to your normal trail stop strategy. In this case you have retained the opportunity of upside potential whilst increasing the dollar risk associated with your wider stop (compared to the next option) being triggered. It is worth bearing in mind with this, and the subsequent choice we will discuss, there is always chance of some slippage i.e. not been filled at expected order price.

The risk of this is that it’s highest with the often-higher volatility situation following data release. C. To tighten your normal approach to trailing a stop e.g., if your norm is to trail your stop to within 20 Pips you could choose to tighten to within 10 Pips of current price pre data release as part of your system.

What this means to you is that if a trend does reverse and trigger your stop it will be at a better level, whilst still giving you any upside potential. What these all mean to you: A. Articulate within your trading plan what is your primary approach and clear any unambiguous situations where you may vary this.

B. As stated before, choose to trade the approach that you prefer right now, and then compare potential results against the other two.