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EP116: How to Predict Forex Market Direction
What’s the best predictors of who wins the superbowl?
In this episode of Truth About FX, Walter digs into predicting the market direction — or is it really possible? He talks about managing your trades rather than trying to “anticipate” the market. So, how do you know what is going on with the markets while you’re at the game? Walter also talks about moving to breakeven, starting with the right mindset, defending your trade, and a bit about trailing exits. More of these in this episode…
Download (Duration: 05:56 / 6.80MB)
In This Episode:
00:39 – follow the cockroach
01:28 – court case
02:40 – defense
04:22 – pick and choose
Tweetables:
Do you know how to manage your trades? [Click To Tweet].
Trading is a court case and you are the judge [Click To Tweet].
You don’t have to predict everything [Click To Tweet].
Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.
Hugh: Hi, Walter. Somebody asked, “How do I know which direction the market is likely to go?”
Walter: Well, I think it turns out one of the best predictors of who wins the superbowl, right?
Hugh: I feel like a fissure or something, right?
Walter: Yeah. You can just follow the cockroaches on the wall and see which way they’re going. No, all jokes aside, we don’t know. Obviously, we don’t know and the best traders in the world, they don’t know and they don’t care.
They just wait for the market to go so probably the more important thing to look at is how do you know how to manage your trades once you’re in one because there’s a couple of questions here.
One is predicting in the market which is kind of like a loser’s game, in my opinion. But, the second thing is how do I know what’s going on when I’m in a trade? Now, if you don’t have a hard and fast trailing exit or targets or rules around there, then you’re going to be kind of at the wimps of emotion.
Which is probably not the best place to be but one thing, one simple trick that you can adopt and everyone can adopt listening to this is when you’re in a trade, what you might do is before you’re in a trade, you need to have the mindset that everything, it’s like a court case and you’re the judge.
Everything is to line up. You have enough evidence to say, “Okay, yes. You’re guilty.” “Buy or sell.” Once you get that, that’s great but then as soon as you’re in a trade, your mindset shifts to how quickly do I defend this position.
In other words, when it goes in my favor, how quickly do I move to breakeven? I do it really quickly because I like to have trades that ends up as breakeven. I’ve considered a lot of those could have been losers and I save myself.
Now, some of them… Like in fact this week, I had one where — well it was last week but basically it was managed this weekend — what happened was the trade was stopped out at breakeven for me but a lot of pe...
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By Walter Peters (FXJake) and Hugh Kimura (Trading Heroes)What’s the best predictors of who wins the superbowl?
In this episode of Truth About FX, Walter digs into predicting the market direction — or is it really possible? He talks about managing your trades rather than trying to “anticipate” the market. So, how do you know what is going on with the markets while you’re at the game? Walter also talks about moving to breakeven, starting with the right mindset, defending your trade, and a bit about trailing exits. More of these in this episode…
Download (Duration: 05:56 / 6.80MB)
In This Episode:
00:39 – follow the cockroach
01:28 – court case
02:40 – defense
04:22 – pick and choose
Tweetables:
Do you know how to manage your trades? [Click To Tweet].
Trading is a court case and you are the judge [Click To Tweet].
You don’t have to predict everything [Click To Tweet].
Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.
Hugh: Hi, Walter. Somebody asked, “How do I know which direction the market is likely to go?”
Walter: Well, I think it turns out one of the best predictors of who wins the superbowl, right?
Hugh: I feel like a fissure or something, right?
Walter: Yeah. You can just follow the cockroaches on the wall and see which way they’re going. No, all jokes aside, we don’t know. Obviously, we don’t know and the best traders in the world, they don’t know and they don’t care.
They just wait for the market to go so probably the more important thing to look at is how do you know how to manage your trades once you’re in one because there’s a couple of questions here.
One is predicting in the market which is kind of like a loser’s game, in my opinion. But, the second thing is how do I know what’s going on when I’m in a trade? Now, if you don’t have a hard and fast trailing exit or targets or rules around there, then you’re going to be kind of at the wimps of emotion.
Which is probably not the best place to be but one thing, one simple trick that you can adopt and everyone can adopt listening to this is when you’re in a trade, what you might do is before you’re in a trade, you need to have the mindset that everything, it’s like a court case and you’re the judge.
Everything is to line up. You have enough evidence to say, “Okay, yes. You’re guilty.” “Buy or sell.” Once you get that, that’s great but then as soon as you’re in a trade, your mindset shifts to how quickly do I defend this position.
In other words, when it goes in my favor, how quickly do I move to breakeven? I do it really quickly because I like to have trades that ends up as breakeven. I’ve considered a lot of those could have been losers and I save myself.
Now, some of them… Like in fact this week, I had one where — well it was last week but basically it was managed this weekend — what happened was the trade was stopped out at breakeven for me but a lot of pe...