The 5-Step Blueprint for Navigating the Forex Market Successfully

The Blueprint for Success workshop is an educational service for traders offered by the Van Tharp Institute (VTI), a leader in trading education. VTI offers workshops, books, newsletters, home study options, audio-visual material, trader simulations and other products/services to help traders improve their performance as investors.

Caution needs to be taken when designing a strategy around economic news releases, considering its extreme volatile nature. It is usually designed to provide series of alerts, which generates buy or sell decisions.

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However, for the MetaTrader 4 MT4 users out there, the steps below should help. Luckily, MT4 makes it easy to get the same look that I use. This combination is what works best for me but feel free to play around with these colors to fit your taste. This can be annoying especially when trying to analyze past market activity. I prefer chart shift because it adds additional white space to the hard right edge of your screen making it easier to analyze the price action. This time you should see your saved template on the list.

Scanning for trades is something I know some of you struggle with because I constantly get emails on the topic. The very first thing you need to know is that the time frames from which you trade will make all of the difference here.

For example, someone who uses a 5-minute chart needs to be in front of their charting platform all day or at least a good portion of it.

This is due to the frequency and speed in which a setup can materialize. On the flip side, someone who trades from the daily time frame such as myself only needs to check in periodically. Having a quote machine is like having a slot machine on your desk—you end up feeding it all day long.

I get my price data after the close each day. While quote machines are outdated in the trading world, the message above is timeless. I have my watch list for the week which usually consists of three to five pairs that look promising. This structured approach keeps me disciplined and prevents me from straying too far between Monday and Friday.

Trading is a waiting game pure and simple. Those who manage to wait the longest before pulling the trigger stand a much greater chance of coming out on top at the end of the month. While it might be a bit cliché or even played out, it remains one of the best pieces of advice ever given.

The first exists when you have no open positions, also called being flat. The second is when you have at least one open position. This way you can make decisions without being influenced by the risk that comes with an open position. First and foremost, this does not need to be complex. Also, note that I want traders to define their risk using a percentage as well as a monetary value. Remember that you should always construct this plan before entering the market.

Because once you have risk on the table, your state of mind quickly turns from neutral to biased, which can influence your decisions. There is a logical side to defining risk, and then there is an emotional side.

They tend to forget that humans have an inherent emotional attachment to money. Unsurprisingly, most Forex traders forget about this aspect. Either that or they believe that a logical risk control strategy is enough. If you want to move past the barriers that are holding you back, you need both. The logical side of risk control deals with percentages.

You must also define a dollar amount. We have no idea based on that statement alone. Because until you write it and fully accept it as money you can lose, it will continue to exist as a single point of failure during a trade. You should always define both a percentage risk and dollar risk for every position you take. The fear of missing out is perhaps one of the strongest emotional disrupters in the Forex market.

One thing I mentioned to my members a few days ago was the notion that patience as a trader extends beyond waiting for the right setup. It also involves waiting for a proper entry. This is because a poor entry can ruin a great setup. Becoming a successful Forex trader is about waiting for the right setup to come along, waiting for a proper entry and then waiting some more for it to play out. Being a successful trader is about knowing when not to trade.

Perhaps the most overlooked aspect of trading is good record keeping. Whether you do this in an Excel spreadsheet or even a notepad is up to you.

Do you have data to back it up? Or maybe you think your risk to reward is holding you back, but how can you be sure? A simple notebook or spreadsheet can do wonders and is a heck of a lot better than nothing. In the case of Daily Price Action members, they get access to the Trade Tracker , which is an online system I put together. Forex trading involves substantial risk of loss and is not suitable for all investors. Please do not trade with borrowed money or money you cannot afford to lose.

Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice.

We will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. Please remember that the past performance of any trading system or methodology is not necessarily indicative of future results. Recent Popular Comments Nial Fuller. Price Action Trading Patterns: Can Forex Trading Be Taught?

God bless you Nail Thanks Nial for providing these charts now I under Dear Nial, I am a novice forex trader from India I will say a big WOW to this. Thanks so much Nial Im also intrested to You don't need to make 10R in a month. Great read as usual.

One big big ques Hi Nial, Thank you for this lesson.