My checklist that gets me set to trade
By Tom Hougaard.
Before I sign out, I want to go through with you the checklist that I use daily. It has become an essential part of my proprietary trading, especially because I trade both currencies and indices, and both intraday and over several days.
What is Asia doing? Every morning I go to Yahoo Finance and see what the Asian indices are doing. If they are all up, I expect a bullish Europe.
I go through the major currencies (dollar, sterling, yen and Swiss franc) and their crosses on the weekly, daily, four-hour and 60-minute chart. I look for patterns, double tops, trendline breaks, and anything else that I can use to gauge for direction for the day. I also look for Fibonacci ratios and expansion of range bars. In total, it amounts to 40 charts, and it takes me about 30 minutes. I make notes next to each pair where I see something of interest. It means I am ready for the trading day.
I trade indices off a tick chart, but I still need to know what the daily and weekly trend is in indices.
Once the trading day is over, the hard bit starts. Trading in itself is fairly mechanical, although controlling the emotions is something I have to be vigilant about every day. I easily get over-confi dent and trade way too big. After the day is over, it is time to ask the three Ws:
• Why did I do that?
• What could I have done instead?
• What did I miss today?
As I said before, there is no better practice than doing, either with a live trading account or a demo. Keep a log of your individual trades, and make a level-headed review of each day’s trading, and you will learn more than any course or book can ever tell you.
CFD trading and spread betting carries a high level of risk to your capital with the possibility of losing more than your initial investment and may not be suitable for all investors. Ensure you fully understand the risks involved and seek independent advice if necessary. These products are only intended for people who are over 18.