What is this all about?

This blog is my attempt at explaining my thinking process when trading the markets (Forex and equities) and improving it as a result. I intend to write articles in a few categories (initially at least):

• Stuff about mindset, psychology and motivation as it is heavily underrated with most traders
• Risk management – as it is the main reason you will actually make money at some point
• Trade recaps / reviews – to showcase how I implement the above. To make it a bit more manageable I will focus on only one pair initially: EUR/USD.

I trade what people call supply & demand as, in my humble opinion, it is the core principle that drives all markets. I will not go into the basics of suppl&demand trading in general, there are already sufficient guides and tutorials on the Internet. If you are totally new to trading and it’s all black magic to you, have a look at resources like babypips, this will give you an idea. Go through their basic training course, just keep in mind that many techniques they describe are in reality not profitable. You should understand the logic behind them nevertheless. I intend to describe my process and my routine(s) so that you can re-use them in your trading, maybe even saving some time which I had to spend, to get them developed.

The strategy that I will follow in my recaps is mainly lower time-frame entries (scalping-like), based on higher time-frame narrative. People call it multi-time-frame analysis. I nominally look at weekly charts to get a rough idea where we are and build my narrative based on daily, 4-hour and 15-minute charts. During the week, I look at what is happening on 4-hour in the morning, I include daily only if we had some significant moves past day, and during each day I mainly focus on 15-minute for direction and 1-minute charts for execution. I execute my trades on 1-minute to get my foot in the door with a small stop-loss (usually below 5 pips). This works well for me but might not work well for you – trading is very individual. You will need to find an approach that you are comfortable with.

Benefit of the 1-minute entries is obviously the very tight stop-loss and potentially high risk-to-reward if the price goes in your direction. You can also take more trades, every day if you like, and have the opportunity to catch bigger moves early. The downside is that your hit-rate (how many trades actually go to your target) will be fairly low and that you need to be at your charts during the day, at least from time to time. Fairly low hit-rate means for me between 30-50%. To say it in a different way: you will lose most of the trades you take. And here is the beauty of proper risk management – even if you lose 7 out of 10 trades you take, you can still be profitable. More on that later on.