#261: Knowing when NOT to take a new trade

Podcast: Knowing when NOT to take a new trade In this weekly video: 00:25 – Learning to reject a trade 00:53 - Less is more 01:14 – Live 2 hour webinar and examples shown in real time 01:50 – I took 1 trade and rejected others 02:51 – The AUD/NZD H6 trade 04:32 – The trade hit the full profit for a 2:1 reward:risk ratio, or a 1% account gain As part of being a good Forex trader, it's important to understand when not to take a new trade. Let's talk about that and more right now. Hi, Forex traders. It's Andrew Mitchem here, The Forex Trading Coach with video and podcast number 261. Learning to reject a trade An important part of being a very good Forex trader is having the ability to reject trades, to see good, technical setups, but you may also see a reason why not to take that trade. You see, as a Forex trader, I'm sure that you want to take new trades. It's the excitement, it's the buzz of identifying new setups of taking new trades because that's what we do. We're looking for trade set ups all of the time. Less is more Part of being a good Forex trader is also using the less is more philosophy. You don't need to keep taking trades in order to do well. You need to have the higher quality trades in order to do well, not the volume of trades. It is important to understand what to look for when not to take a new trade. Live 2 hour webinar and examples shown in real time As an example, just last night I held a live two hour session with my clients, so traders from all over the world on this session for two hours in the European session, and we were looking at trade setups that I'd taken over the previous week, looking at some really good technical setups. Most those trades worked. A few didn't. That's just part of trading, but in real time, I was finding that yesterday, which was Thursday, the 15th of February, the market in the European session was just a little bit quiet and there wasn't a lot there. Then towards the end of the session, there was some very nice technical setups showing. I took 1 trade and rejected others But I only took one trade. What I was finding was there were good technical setups, but I was also finding a reason not to take the trade, and it could be, as an example, as a buy trade, it means that we're buying into a round number. We may be just a few pips below a round number, like a 00 or a 50 level. We don't want to be doing that. You don't want to be buying directly into a middle Bollinger band or a pivot point or as a buy trade, you don't want to be buying and knowing that you need to get your profit target through a previous resistance level or previous high. Those type of things. That's what you want to avoid doing. I was looking at a number of good technical setups, and I was saying to clients, "Look, I really like this. It's got a great candle pattern. It's in the right part of the chart. It's got a trend line break, all the things we're looking for. Oh, but this trade's against today's ideal strength or weakness, or this trade's buying directly into a round number of 00. There's reasons why not to take those trades." The AUD/NZD H6 trade Then towards the end of the session, I found a great technical trade on the Australian dollar, New Zealand dollar on the six hour chart, and I took the trade. Had everything I was looking for. It had the great candle pattern, it was in the right part of the chart. Yesterday, you can go and look on my free analysis for Thursday, the 15th of February. I was suggesting looking for sell trades on the Aussie Kiwi Cross, and that's exactly what I was doing on the six hour charts. I had a round number in the pivot point to protect my trade, as in protecting the stop loss.