Don Dawson
Online Trading Academy
Often times I will be talking with a trader and hear a familiar story among new traders. “I’m making money one day then lose for 2 or 3 days.” I usually reply, “I bet you have married a market (only trade one market).” Usually I get a very surprised look and they reply, “Yes, but how did you know?”
As a professional trader you should be looking for one trading strategy that you will learn everything there is to know about it, a core strategy. Then execute it every trade that comes along. Too many strategies or ideas will only cloud your mind and cause hesitation when it comes time to execute your order, making you late for entry and usually getting stopped out for a loss.
This is where there can be a problem for a trader who only trades one market. Having a core strategy means you will have to wait for the exact setup to occur in your one market before you trade. Most novice traders do not realize they will need patience to wait for this next setup. Instead, they feel like this one core strategy will give them a trading setup every day in this one market. And it is possible that you can get a setup every day, but is the market going to come to that level to get your order filled every day? Probably not, no wait – I seriously doubt it!
During the trading session the novice trader will become board or anxious that they are missing opportunities and begin to surf the charts looking for something that resembles a reason to place a trade. The odds are this reason will have nothing to do with their trading plan. And you know what the results are of this trading style… a winner and 2 or 3 losing trades in a row.
But, if the novice trader would pick out a few core markets to trade, they will soon find that their core strategy will have them placing trades in markets that are possibly ready to move in their favor. Think of it like fishing with multiple fishing rods. You have a better chance of catching dinner if you have several lines in different places of the river.
Free Trading WorkshopYour core markets could be constructed of say 4 to 6 Futures markets, allowing you to fully understand all of the contract specifications and trading quirks of each of these markets. Now you can have your analysis done and patiently wait for price to come back to your level using your trading plan of a core strategy to execute the trade. You will find that this will increase your odds of having the market in one of the levels you wish to trade on a much more frequent basis.
Markets move in two types of directions, Impulse Waves and Corrections. The initial “impulse” wave is the path the market has the least resistance to travel. This is the direction we want to trade in. But to enter the market using our core strategy the price needs to “correct” the recent impulse move.
During the impulse wave the single market trader can make their money. But when it takes multiple time periods (days, hours, minutes, etc.) the individual market trader loses patience waiting for the proper setup before entering the market. Having core markets to trade will increase the frequency of core strategy setups. Each day different markets are either in an impulse wave or a correction of some sort.
Start small with a number of core markets, but have more than just one market to trade. I think you will find this way of trading will help you follow your trading plan rules much easier.
“The pain you feel today is the strength you feel tomorrow. For every challenge encountered there is opportunity for growth.”
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Editors’ Picks
EUR/USD clings to small gains near 1.1750
Following a short-lasting correction in the early European session, EUR/USD regains its traction and clings to moderate gains at around 1.1750 on Monday. Nevertheless, the pair's volatility remains low, with investors awaiting this weeks key data releases from the US and the ECB policy announcements.
GBP/USD edges higher toward 1.3400 ahead of US data and BoE
GBP/USD reverses its direction and advances toward 1.3400 following a drop to the 1.3350 area earlier in the day. The US Dollar struggles to gather recovery momentum as markets await Tuesday's Nonfarm Payrolls data, while the Pound Sterling holds steady ahead of the BoE policy announcements later in the week.
Japanese Yen adds to strong gains and drags USD/JPY to 155.00 amid hawkish BoJ bets
The Japanese Yen extends its steady intraday ascent through the Asian session on Monday, dragging the USD/JPY pair to the 155.00 psychological mark in the last hour. Against the backdrop of the recent shift in rhetoric from Bank of Japan Governor Kazuo Ueda, an improvement in business confidence reaffirms market bets for an imminent rate hike this week.
Editors’ Picks
EUR/USD clings to small gains near 1.1750
Following a short-lasting correction in the early European session, EUR/USD regains its traction and clings to moderate gains at around 1.1750 on Monday. Nevertheless, the pair's volatility remains low, with investors awaiting this weeks key data releases from the US and the ECB policy announcements.
GBP/USD edges higher toward 1.3400 ahead of US data and BoE
GBP/USD reverses its direction and advances toward 1.3400 following a drop to the 1.3350 area earlier in the day. The US Dollar struggles to gather recovery momentum as markets await Tuesday's Nonfarm Payrolls data, while the Pound Sterling holds steady ahead of the BoE policy announcements later in the week.
Gold stuck around $4,300 as markets turn cautious
Gold loses its bullish momentum and retreats below $4,350 after testing this level earlier on Monday. XAU/USD, however, stays in positive territory as the US Dollar remains on the back foot on growing expectations for a dovish Fed policy outlook next year.
Solana consolidates as spot ETF inflows near $1 billion signal institutional dip-buying
Solana price hovers above $131 at the time of writing on Monday, nearing the upper boundary of a falling wedge pattern, awaiting a decisive breakout. On the institutional side, demand for spot Solana Exchange-Traded Funds remained firm, pushing total assets under management to nearly $1 billion since launch.
Big week ends with big doubts
The S&P 500 continued to push higher yesterday as the US 2-year yield wavered around the 3.50% mark following a Federal Reserve (Fed) rate cut earlier this week that was ultimately perceived as not that hawkish after all. The cut is especially boosting the non-tech pockets of the market.
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