If asked to describe financial markets to someone who's never heard of them, you'd use terms like chaotic, random, volatile, unpredictable, wild, and never constant.
As a serious trader, your first step is to chunk down until you have a framework that brings order to your trading. Think of it like a playing field in sports. Within the field of play is when you can trade, and out-of-bounds is when you don't trade. But it's not only about being in the field of play. In team sports, players have unique roles and only engage in certain cases. Trading is no different.
A trading playbook refers to a catalogue of strategies deployed in certain cases. And as a result, they produce positive results over the long-term. It means they make money over x number of trades despite in trading where nothing is 100%. Traders refer to this as edge. When the market presents an opportunity to combine several playbook trades simultaneously, it can be satisfying and rewarding.
We're in the odds business, but confidence plays a role in everything we do, including trading. Has your trading confidence taken a hit? How would you feel knowing you are stacking known positive expectancy trades on top of each other? You'd feel full of confidence and not hesitate to act on your trade. Right? Hence why, the best traders swear by a trading playbook.
Your only tasks when live trading are:
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Recognise when the market behaviour matches a playbook trade.
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Execute the trade.
You're going to see a recent short and long trade. But before that, it's important to understand why there are always reports of high failure percentage of traders outside of professional trading. It's because these traders don't have an edge. i.e. no catalogue of trades that produce positive results over the long term. It takes years of knowledge and forward testing to evolve a trading playbook. If you go it alone, you'll likely never get there.
But the good scoop is you have a choice. You can learn playbook trades when you trade at a professional trading firm or work with a mentor who can teach you their extensive playbook. It's a legitimate shortcut to developing profitable trading. If you love trading, but poor results and little progress are painful, either option will get you past this.
Now, the examples are shared to show you:
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Order and form can exist in what is an otherwise chaotic and random environment.
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You can play the game on your terms, building your trust and confidence in trading.
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It's how serious traders can operate a trading business that has long-term positive performance.
The short trade is taken when four playbook trades occur at the same time.
The long trade is taken when three playbook trades occur at the same time.
Forex and derivatives trading is a highly competitive and often extremely fast-paced environment. It only rewards individuals who attain the required level of skill and expertise to compete. Past performance is not indicative of future results. There is a substantial risk of loss to unskilled and inexperienced players. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an independent
Editors’ Picks
EUR/USD struggles for direction amid USD gains
EUR/USD is trimming part of its earlier gains, coming under some mild downside pressure near 1.1730 as the US Dollar edges higher. Markets are still digesting the Fed’s latest rate decision, while also looking ahead to more commentary from Fed officials in the sessions ahead.
GBP/USD drops to daily lows near 1.3360
Disappointing UK data weighed on the Sterling towards the end of the week, triggering a pullback in GBP/USD to fresh daily lows near 1.3360. Looking ahead, the next key event across the Channel is the BoE meeting on December 18.
Japanese Yen bulls have the upper hand as hawkish BoJ outlook offsets risk-on mood
The Japanese Yen remains on the back foot through the early European session on Friday, though it lacks bearish conviction amid hawkish Bank of Japan expectations. Traders have been pricing in the possibility that the BoJ will hike interest rates as early as next week.
Editors’ Picks
EUR/USD struggles for direction amid USD gains
EUR/USD is trimming part of its earlier gains, coming under some mild downside pressure near 1.1730 as the US Dollar edges higher. Markets are still digesting the Fed’s latest rate decision, while also looking ahead to more commentary from Fed officials in the sessions ahead.
GBP/USD drops to daily lows near 1.3360
Disappointing UK data weighed on the Sterling towards the end of the week, triggering a pullback in GBP/USD to fresh daily lows near 1.3360. Looking ahead, the next key event across the Channel is the BoE meeting on December 18.
Gold losses momentum, challenges $4,300
Gold now gives away some gains and disputes the key $4,300 zone per troy ounce following earlier multi-week highs. The move is being driven by expectations that the Fed will deliver further rate cuts next year, with the yellow metal climbing despite a firmer Greenback and rising US Treasury yields across the board.
Litecoin Price Forecast: LTC struggles to extend gains, bullish bets at risk
Litecoin (LTC) price steadies above $80 at press time on Friday, following a reversal from the $87 resistance level on Wednesday. Derivatives data suggests a bullish positional buildup while the LTC futures Open Interest declines, flashing a long squeeze risk.
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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