Trading ideas - Your Go-To Guide

18 March 2020

    Is finding new ideas as complex as it may seem? Turns out, as often in trading, it all comes down to structure and discipline.


    First of all, what is an idea in trading?


    Generally speaking, coming up with trading ideas is about knowing the markets enough to play out possible scenarios in your head before you execute them on the market. In other words, it’s the ability to forecast not only how high or low an asset will go, but also in what time frame. All it takes is attentiveness and practice - the more times you see something, the more likely you are to recognize upcoming patterns before they occur, and profit on them.


    Now, how do you get ideas flowing? Just a few ground rules to get you started:


    1. Be exposed to the markets - always. The closer attention you pay to what goes on around you, the quicker you’ll get the hang of generating new ideas


    2. Study charts. So called “screen time” is essential to learn pattern spotting. Observe charts on different timeframes and different markets, and study the relationships between them on a daily basis


    3. Listen to people talk about the markets. This isn’t to say take their advice, but why not pick out a few interesting thoughts via news articles, interviews or trading guru sharings, and blend them to create something of your own?


    4. Note and sketch. Note down relationships between highs, lows and closes you discover, or sketch patterns you would like to trade. Adding this element of structure to your thoughts ends up going a long way


    5. Understand the nature of patterns. Patterns form trading strategies, so it’s vital to keep in mind that if you find something profitable, it likely won’t last forever. Strategies tend to fall in and out of favour over different timeframes, and changes will need to be made to accommodate the ever-changing market conditions. Recognize, test, use, review, then keep your findings in store for when the time is right again.


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