I have to emphasize the four rudimentary requirements to implement this Dashboard system (or any system) implementation. If I want to be professional Forex trader, I have to make ‘Financial goals’ to conquer by following a systematic planned approach.
The four pillars of Forex trading !
- Trading Goals: Create clear, appropriate, thorough goals and split them into immediate, medium and long term categories.
- Trading System: A strict asset selection strategy, suitable for my portfolios objective. The selection should be built upon reasonable expectations for risk and returns, and should use diversified trades to avoid risks.
- Trade Management: Trade S.E.T. ups (aka stop loss, Entry and target profit), profitability rations, risk management, Live Journal, money management..
- Discipline: Because trading can provoke strong emotions so maintain perspective and long-term discipline help us remain committed to a long-term trading program through period of market uncertainty.
My Goals and Motivations : Defining SMART goals and being realistic about achieving them is the first step to the journey to be a professional trader. Motivation(intensified desire) is a ‘fuel’ keeps me going, when going gets tough!
My Business Plan – ‘Why’ I want to trade Forex?
The name of my Forex business: ‘Jazz Forex‘
- I want to quit my job in 2 years and must provide enough replacement income through trading.
- Make enough money to provide additional travel support my family.
- Have freedom to set my own schedule.
- Contribute to charities.
- I want F.I.R.E (Financial independence and early retirement).
- Defining my “enough income”: How much is enough? Well, answer depends who asked the Question! I have calculated that I need $54000 per year, after I retire in Canada. See my calculation page called F.I.R.E. here –Financial Independence and Retirement Earning.
My personal Strengths and Weaknesses
- Organized: Have spent the last 10 years managing a business. Trading requires proper organization of plans and logging of trades for evaluation. Proper organization will enable me to remain focused, intent, confident, and efficient (will help with measuring your results)
- Determination: Determination is second nature in the business I have created. How it will help me? As trading is a game of persistence; it is a long-term journey. I must be intent to accomplish my goal.
- How it will hurt me? ( I Don’t know yet)
- “I am afraid of losing money” :Inability or Potential Pitfall : Indecision or doubt when triggering a trade or executing, over-trading, heart attack, jumping in too early, triggering a trade without a Supply and Demand level, jumping out too early (taking profits too early).
Possible Solution :
- Set it and forget it executions on my all trades.
- Another solution: Trade a micro account for several months and just follow my trade plan to gain confidence.
- Set specific ratings from 0 to 10, something odds enhancers sheet to qualify screened trades. Only take trades that rank 8 or better in my screening.
- Lack of Focus: Inability to develop plan, panic because not present for the current trade, may miss trades or opportunities.
- Dedicate a very specific 2 hours to trade and only trade those hours.
- Turn off my digital distractions! ‘YouTube’, ‘Netflix’ ..
- Organize workplace for optimal focus
- Power of now!
- Set a Routine
My Daily Routine:
- Be at computer 30 minutes before market opens at 5:30 PST.
- Review my organizer to see if there are any important duties or even special goals that I want to accomplish.
- Check my emotional state, Check Internet Service.
- Check for Fundamental Risk on economic Calendar:
Today’s news and economic calendars to find fundamentals and sentiment 6:20am (forexfactory , finviz, fxstreet, traders dashboard, marketwatch, dailypfennig)
- Meditate: Relax and visualize myself trading by my defined plans. Review my trading goals and my journal from previous day (Goals-trade skillfully and not make the same mistakes made the previous day)
- Plan all set usually by 7 am
- Check my Trading Account Balance and positions as following:
- Check my Closed Positions (I save a snap-shot image to the folders called WINNERS and LOSERS)
- Check Open Positions (Existing, New, Some Trades May need immediate managing on Intermediate Time Frame)
- Pending or Waiting Orders
- Go to my primary Tradingview charts:
- Start a Top-down approach Monthly to 4 hours time frame.
- Higher time frame (monthly) : look for major supply and demand zones and trend
- Intermediate time frame (weekly charts): look for minor supply and demand zones and trend.
- Screening : Record potential opportunities on a work-space on Trading-view or my Dashboard. Once opportunities are found with my screen, work out SETUPS, (execution criteria Entry, Stop-Loss , Profit-Targets, etc.) Open up charts and start my Multi-Time Frame Analysis Look at previous created Demand and Supply Zone (Buy, Sell or wait)
- Note down any new fresh demand zone or supply zone created since yesterday.
- Start with my own Demand and Supply zone, then
- Pro Pick zones, master mind Levels and market scanner
- ‘Heat Map’ Pairing Strong vs. Weak
- Check EMA’s for Intersecting in Demand Zone Supply Zone on Larger and Intermediate Time and Frames. Is it a Buy, Sell, or Wait?
- If it’s a Buy or Sell go to the Smallest Time Frame (Daily)
- Create an Entry Order
- Double check your Entry order, Stop and Target (s)
- More Trade Management using Intermediate Time Frame.
How I Execute my trades? (Answer-by running my screened-list to select Qualified trades with 0-to-10 score card)
What are the rules for entering/ exiting a trade I will follow?
- Non-discretionary methods:
- Central bank reports of Interest hikes.
- EMA crossover (slow ema50 with fast ema 20) Use for scoring
- Stochastic cross above 80 ( I will not follow)
- Discretionary methods
- I don’t enter trades before major economic releases.
- I will not use intuition or gut feeling before entering any trade.
- Definition of methods :
- If you trade certain candlestick types, how do you define them? give examples if possible. ( I don’t trade candle patterns )
My Strategy: Trend following
- Context : Trend is up or down as defined on a 240-min chart
- Where are Supply and Demand Zones: What is market timing and Trends with respect to market direction i.e.(context)
- Step one: Establish major trend on my High Time Zone (monthly Time Frame)
- Step 2: Establish major supply and demand zones, but I usually do not take a trade into these zones.
- Step 3: Go to my Lower Time Frame, i.e. Daily Time Frame chart to perform following:
- Find ‘minor trend’
- Find ‘minor supply and demand zones’
- Detail the major supply and demand zones
- If the ‘major trend is up’ and ‘minor is down’, look for a demand zone to engage a long
- If the ‘major trend is down’ and the’ minor trend is up’, look to short at supply levels
- If the ‘major trend is up’ and ‘minor is up’, look to short at extreme (usually Higher Time Frame) supply levels
- If the major trend is down and minor is down, look to go long at extreme (usually 240-min) demand levels
- Choose targets at opposing zones
System aka ‘the Dashboard’
Developing a strict asset selection rules for my strategy:
A sound trading strategy starts with an asset selection suitable for our portfolios objective. The selection should be built upon reasonable expectations for risk and returns, and should use diversified trades to avoid exposure to unnecessary risk.
All of my trades are Set and forget executions with following entry types:
Only if a screened trade is qualified above 7.5 to 10 score, then I go for ‘set and forget’ type of entry to trade. With a 7.5 score, I can do a zone entry or full confirmation. But I will resist to undertake trades will lower than 7.5 score.
What risk management methods I will use?
- I use Percentile based risk system, risking 1% capital per trade.
- I don’t use a risk system that actively varies depending on draw-down like martingale system because it is a gamble. But, if I loose 3 trades in a row, I call it a day, No more trading for today!
- I will never use a flat risk system that scales based upon my available capital or margin.
- I will trade maximum of 5 day trades and up to 3 swing trades, that I can have open simultaneously.
- I future, will acquire more skills to hedge my long and short positions. I will get training for Scott Phillips and Online trading Academy.
- I will not have multiple positions on the same or correlated currency pairs. This is not diversification.
Depending upon, market dynamics like ATR change, impending High Impact News /event and market performance; I will scale in and out of my positions.