TRADING DISCIPLINES and ROUTINES

2022 is starting off nicely...

I am banking pips almost daily and at the same time as my FX PREMIUM subscribers will know, I am looking to reduce my RISK EXPOSURE into the end of Q1, so all in all two boxes are being ticked as we complete only week two of a new year.

It is not always possible to do this, but most feedback in Q4 2021 were requests for me to pick out a specific currency pair and share my longer-term outlook. Obviously, I can do this to a limited degree because I do NOT want to give away too much as my FX PREMIUM subscribers are paying for this information, in addition to knowing what my trades are with entries and envisaged exit levels.

However, this week for starters, I am going to share what I do for research, how I approach my (CORE) POSITION set ups, basically, how I frame up my longer-term trades and how it all comes together. This will be the feature of the SOAPBOX this week.

Moving on...

At the end of last week, THE WEEKLY FX PREMIUM 2022 current position was as follows: -

JANUARY 2022 to date:
Total net pips = +1,065 pips

YEAR TO DATE 2022:
Total net pips = +1,065 pips
2022 pip objective = +14,920pips
(7.14% of 2022 objective achieved)

If you would like to see more information on how I trade etc., check out the link below that will connect you to my video presentation, which is on my YouTube channel: -

THE WEEKLY FX PREMIUM REVIEW OF 2021 & LOOK FORWARD INTO 2022
https://bit.ly/review2021look2022

1: THE SOAPBOX

TRADING DISCIPLINES and ROUTINES

Since early December last year, I have received some really nice feedback about this blog and what I cover week by week.

There was however a theme through the responses to add more about specific trades that I am in, or looking at. In my responses to questions specifically about trades, I did say that this is why the WEEKLY FX PREMIUM exists.

However, I will share how a trade comes about, from what I do, the steps I take and what I go through first before putting a trading position together that is posted to my WEEKLY FX PREMIUM subscribers.

I am not saying this is what we should all do. This simply will not work for every type or style of trader, but it works well for me. It has NOT changed much over the years apart from when I became more focussed on longer-term trading my analysis and research went deeper.

1: RESEARCH - THE FUNDAMENTALS:

I gather as much market research and market intelligence possible from Banks, Institutions and Independent Financial advisors who talk currencies.
I read all the USD Major Central Bank Monetary Policy Statements, accompanying notes and general data on their websites. I watch all Press Conferences and make notes.This is crucial for me as a longer-term trader.
Watch / have in Background CNBC EUROPE, BLOOMBERG Surveillance and Surveillance Early Edition.
I used to subscribe to a SQUAWK service, but I found that annoying.... now gone.

2: MY DAILY ROUTINE:

I do have a routine that I follow every morning as my market refresh. I look at what I call my LEAD INDICATORS.

These give me a good “feel” for the market and its inter-market relationships and correlations. For me, I see this as a great indication as to the market’s overall direction and a check to see that inter-market relationships are in sync.

I tend to review each chart and relationship in the same order each day: -

GOLD, OIL and COPPER
USD (DXY) – This group gives me a USD overview.
Currency pairs overview checking / confirming directions and trends etc...
EUR/USD, USD/SEK, AUD/USD, and USD/CAD
Inter-market relationships ...
S&P with AUD/JPY and USD/MXN
US10YR and S&P with USD/JPY
COPPER and AUD/USD
OIL and USD/NOK, USD/CAD, and USD/MXN
Checking currency pair inverse relationships ...
EUR/USD / USD/CHF
EUR/GBP / GBP/CHF

RISK SENTIMENT has always been important to me. FX markets simply move on RISK, there is NO magic sauce here to apply. There are four pairs that stand out for me that are very sensitive to RISK: - EUR/MXN, USD/CAD, and USD/SEK. Finally, never ever underestimate the AUD/JPY. It is not a go-to currency pair that I trade on a regular basis, but it is one to always watch vis-à-vis influence.

On Daily and 240 Minute charts, I am looking for patterns, levels and confluences that match up with the FUNDAMENTALS that I have already based upon a trading direction from all the research undertaken. This suits my RADAR trade style set ups. I will use either a 30- or 60-minute chart to set my entry and a longer-term chart my stop loss and limit.

For long-term trading, (CORE) POSITION trades, the big picture levels from Weekly and Monthly charts are a real go-to tool. I note in my journal levels that interest me and meet with my FUNDAMENTAL thoughts and ideas gathered from the research. I then wait patiently.

3: THE TOOLS:

I use Tweet deck and have a full screen open 24 x 7.
I have multiple broker accounts and I use my 4 x trading screens to reflect directly or via pinned platforms that can be viewed instantaneously.
One of trading screens is for TRADING VIEW charts. Its sole purpose is analysis and for posting analysis to FX PREMIUM subscribers when required.
I have two desktop computers and a MacBook Air connected and used to support my charts

4: TRADING BASICS TO NOTE:

I am a longer-term POSITION TRADER.
I am not averse to holding a position for years if I still retain my conviction that I am trading in the direction that will provide a $$$ return.
I have HEDGED my positions in the past, but I have not done this in the last five years. However, I would not be averse to doing so should the conditions be right.
I trade multiple trades that combined make up my total position.
All of my trades that are (CORE) POSITION trades are generally small in size.
Trade sizes are small, stops are wide in line with the definitions that surround traditional POSITION TRADING.
I use a combination of Monthly Average True Ranges (ATR), Fibonacci Levels, Pivot points and areas of general confluences where buyers and sellers have fought for directional control in the past as my ENTRY and EXIT LEVELS.
I use the 60-minute, 240 minute (4 Hour), Daily, Weekly and Monthly charts when looking for levels.

5: TRADE SELECTED HOW DO I COMMUNICATE:

Initially, I would alert FX PREMIUM subscribers that I am looking to add a (CORE) POSITION trade.

To my website I would then post the following:

Please note: - FX PREMIUM subscribers are advised by my locked twitter feed every step of the way what is happening. -

A short-written piece outlining why I find the position that I am taking attractive. Accompanying this are excel spreadsheets to track open positions and limit orders (These are updated every weekend).
Charts are posted via my secure twitter feed and also added to the page on my website relating to the position.
The initial limit orders are advised and set in place with my broker. These are supplied well in advance. This allows for all subscribers to be ready in position regardless of their location prior to the trade triggering.

Basically, as you can see my approach to trading is based upon discipline and a routine. It is nothing more than pure repetition. It is largely boring, so when I write that I enjoy reading the Central Bank Monetary Policy Statements and peripheral accompanying notes, to most this simply exacerbates the boring aspect of trading.

For me, trading is about: -

Survival in a rigged market that is 100% set against the individual trader.
It is basically me versus the world.
I am on my own.
No-one is going to say to me don't trade that... are you crazy!
You simply rise or fall on your beliefs... your own research.
I trade with a TRADE PLAN
I plan and execute my trades according to my TRADE PLAN.

Not sure if this helps readers, however, if you want to go deeper to find what I am trading, you will need to subscribe to the WEEKLY FX PREMIUM. I will be giving nothing away in this forum. (https://wwww.weeklyfxdrivethru.com

2: THE EDGE
(This section of the blog is exclusive for WEEKLY FX PREMIUM subscribers)

2.1: AUD/USD – RADAR TRADE (RAD246):

2.2: U.S. INFLATION – NOW AT 7% with CORE INFLATION at 5.5%:

2.3: GLOBAL DEBT... WTF:

2.4: IF BORIS JOHNSON RESIGNS WHAT ABOUT CABLE:

2.5: THE CAD TO BE RANGEBOUND FOR A WHILE ... MAYBE NOT:

3: THE MACRO / FUNDAMENTAL VIEW

This short section of the blog looks forward. I share my macro / fundamental thoughts and views for the coming 3-6 months on factors to consider from my Macro, Fundamental and Geo-Political perspective.

I think at this point, it would make sense to post here what I consider to be the KEY DRIVERS in 2022. These feature on my ZOOM review of 2021 and look forward into 2022.

My KEY DRIVERS for 2022 are: -

CENTRAL BANK POLICIES:
Monetary Policy
Divergence (The Central Bank Divergence Trade)
INFLATION / DEBT ISSUES / CREDIT DEFAULTS:
Inflation is a game changer versus the past
Debt Management
Bankruptcies
COVID-19:
Emergence of new Variants
Market Reaction re RISK ON / RISK OFF
Learning how to live with the Pandemic.
SUPPLY CHAIN ISSUES:
COMMODITIES:
Copper
Oil

If you resonate with my long-term MACRO THOUGHTS and want to get into the trades with me as I develop positions, you will need to subscribe to the WEEKLY FX PREMIUM at https://www.weeklyfxdrivethru.com

4: TRADING PSYCHOLOGY

For me, TRADING PSYCHOLOGY is a very important key aspect of trading that is often misunderstood or just ignored. How we use our conscious and unconscious minds when trading is crucial to our longer-term trading successes.

Over the coming weeks, it is my intention to cover areas and aspects of trading that may be new to many readers. Sometimes things can be right in front of us, and we cannot see it.

HEAD MANAGEMENT and HEAD MANAGEMENT strategies for consistent success in trading is crucial to long-term success.

TRADING PSYCHOLOGY
SOME TIPS TO KNOW

Continuing with some tips you should have, the previously posted ones being: -

DON’T TRADE WITH MONEY THAT YOU CANNOT AFFORD TO LOSE:
(28.11.2021)
AVERAGE GAINS ARE WHAT MATTERS:
(05.12.2021)
TAKE A BREAK IF YOU ARE HAVING A RUN OF POOR TRADES:
(12.12.2021)
DON’T SHARE THE MARKET’S SENTIMENT:
(09.01.2022)

It’s very hard when discussing this subject not to be in abstract. To a large extent it is the nature of the beast, when dealing with emotions and irrationality.

However, no knowledge, no matter how abstract, is worth diddly-squat unless it can be broken down into actionable tips.

So, here I go....

5. REMEMBER... THE MARKETS ARE RANDOM:

It took a great deal of restraint on my part just to use the word random. I could have easily used words such as: - mad, crazy, mental, unhinged, irrational, unpredictable or just complex.

This flies in the face of one my core phrases when describing trading in the forex market (see below).

Having posted the above, look; we know a huge amount about how the market functions and how institutional investors and banks sell their books either positively or negatively to fool the newbie traders. We know how the markets overreact spurred on by overzealous algorithms to certain market events and changes BUT none of this is foolproof.

Dare I say it the market only truly reflects MASS PSYCHOLOGY... the sentiment of millions of traders and investors institutional and individual alike.

Plus, just to place a cherry on the top of the cake, as I have mentioned already, most traders are unfortunately irrational. It is therefore very hard to trade in a market that is chaotic and sometimes difficult to predict. I am not going to have a swing at algorithm’s here BUT with instantaneous communication worldwide algorithm’s only fuel chaos with their Ai ingredients which simply serve to push prices which in turn can have a domino effect creating dramatic changes to the market.

FYi, therefore I no longer look to trade around FED meetings, Non-Farm Payrolls etc., the knee-jerk reactions are fueled by algorithms.

Ex U.S. President TRUMP and the effect of his twitter feed on markets was why I turned into a longer-term POSITION TRADER.

I digress...

I may digress BUT, to me, the TRUMP tweet storms only fueled how random the market is capable of being. No chart, no metric, or trading strategy could predict the timing of a TRUMP tweet. Algorithms went bananas’, and traders with expert advisors (EA) either made a killing or lost packets of $$$. To date, I have yet to communicate with a trader who has made a consistent return via EA. But that is for another day.

I digressed again...

In practice all of this means that even the most rational and well-thought-out strategies sometimes fail. There is no such thing as the “Silver Bullet” ... sometimes you can do everything right and still end up losing $$$.

Look... do NOT forget this. It’s easy to get demoralized when you spend weeks analyzing fundamentals and chart metrics with a huge time spent on chart analysis and making a strategy only for it to fail due to some completely unforeseen and random factor.

The proof of the pudding is in the long-term performance of your strategies. Just because you did everything right and still failed doesn’t have to mean that your strategy isn’t good. Losing trades should always cause you to reconsider what you are doing, but don’t assume that they automatically mean that you should switch things up.

I always approach losses on a trade-by-trade basis. No strategy can account for sudden news or actions of others, so when your trade fails, ask yourself if you failed because your strategy wasn’t up to par, or in spite of the fact that your strategy was good.

5: CLOSING THOUGHTS

5.1: THE WEEKLY FX PREMIUM – SUBSCRIPTION INFORMATION:

If you like my approach to the market and are wondering what my trades are like from, a live perspective and what is the WEEKLY FX PREMIUM all about, check out my website https://wwww.weeklyfxdrivethru.com

The WEEKLY FX PREMIUM is my subscriber-based FX support option, which offers, subscribers’ full access to my suggested trade set-ups and my market commentaries via Twitter, TwitLonger and ZOOM.

5.2: THE WEEKLY FX PREMIUM - 2021 PERFORMANCE:

Below is the excel spreadsheet outlining the final numbers for 2021 based upon pips and $$$.

It shows you the potential that was available last year based upon single lot trades. I have used the single “Mini Lot” column to highlight the potential income possible. Obviously, you can use this as a base case to factor up your trading opportunity based upon the size of your broker account and your position sizing based upon your RISK TOLERANCE.

5.3: THE WEEKLY FX PREMIUM – 2022 PIP & INCOME PROJECTION:

Below is the excel spreadsheet outlining my income and pip projection for 2022.

It shows you the potential available this year based upon single lot trades. I have used the single “Mini Lot” column to highlight the potential income possible. Obviously, you can use this as a base case to factor up your trading opportunity based upon the size of your broker account and your position sizing based upon your RISK TOLERANCE.

5.4: THE WEEKLY FX PREMIUM - NEW SUBSCRIBER PROMOTION:

To start off 2022 with a bang, I have launched a new subscriber promotion called “DOUBLE UP”. The details are below and can also be found on my website together with lots of other information about me and how I trade. If you want to trade with my thoughts and ideas for the entire year, this will be best the best opportunity to get your FX Trading all set for 2022.

Further information about how to subscribe to the WEEKLY FX PREMIUM is also located at the top of my welcome page at https://www.weeklyfxdrivethru.com under the “SUBSCRIBE” tab.

5.5: THE WEEKLY FX DRIVE THRU BLOG – DISTRIBUTION and TIMINGS:

Over the past few weeks the number of questions asked about timing and distribution of this blog have increased, so I thought it prudent to clarify.

DISTRIBUTION and TIMINGS:

WEEKLY FX PREMIUM (Full Version) subscribers:
Saturday before 5PM New York Time
FREE NEWSLETTER (Restricted Version) subscribers:
Sunday before Noon PM New York Time
SOCIAL MEDIA and COFFEE SHOP
FREE NEWSLETTER (Restricted Versions):
Sunday before 3PM New York Time

Finally, putting this blog together prior to distribution takes many hours each week. There may be occasions that news jumps ahead of some of the content, so please excuse my commentary should that situation occur.

Below are the dates for the DRIVE THRU blog in 2022.

5.6: THE FINAL CUT:

Always remember longevity in Forex trading can only be achieved through trading with a good MINDSET, RISK, TRADE and HEAD MANAGEMENT, and above all set your position sizes in accordance with the size of your account and allow for some flexibility. Trade with a TRADE PLAN, basically, plan your trades and Trade your Plan.

Finally, be GRATEFUL for your wins and COUNT THEM. Keep a POSITIVE MINDSET in play at all times, regardless of the market conditions.

Scott Pickering
The Pip Accumulator
Twitter: @pipaccumulator
https://weeklyfxdrivethru.com/disclaimer/

BLOG VERSION: #438 FREE NEWSLETTER
DATE: 16th January 2022