Trading for visual price patterns is a bit like hunting for fish. Sometimes the small fish come close to the beach – and at other times, you need to go out a bit deeper into the waters to find bigger ones.
If you consider the whole ocean as your hunting ground, then you don’t really need to fear that you will not find any fish. You might be unaware of the fish right now, you know that they are out there for you to capitalize on. Once you understand that the ocean is your friend and is abundant, then the fear of missing out on potential opportunities fades away completely.
What if you were to view your Trading Universe as a vast ocean that is abundant and full of opportunities? It’s nice to know that there are, and always will be, more than enough fish out there. You just need to go hunting and take action when the risk-to-reward is attractive enough.
Just as some fish are really easy to catch, you can get quick, small R winners out of many trades. At other times, fish are more difficult to catch. But once you find them, they might provide you a big prey — meaning a big R multiple, even a double-digit result. You might do really well feeding on lots of small or medium-sized fish, but once in a while, a big one is nice too.
Choose Your Hunting Ground
When my Masters’ Class of traders trade the market, they keep their eyes open to all different sizes of fish. The big advantage of trading visual price patterns is that you can be very flexible with the timeframes. You get the small fish in the second charts, 1min or 5min timeframe while we can also find bigger ones eg on the 240min, Daily, or Weekly charts. Looking at a multitude of different timeframes determines the borders for our hunting territory in the ocean. We can choose how many symbols (with currency pairs or futures contracts) we want to trade according to what fits best. Some traders focus on the 30 most liquid symbols while others are open to a wider range of 50, 100, or even more (in case of currency pairs). Together, hunting across multiple Timeframes and Symbols opens up a vast ocean of Trade Universe opportunities (or our fishing grounds).
You can think of the Trade Universe as a Matrix where every intersection offers a potential trade opportunity at any given time:
Trade Universe Matrix
Focus on Specific Price Pattern
The 3 systems use individual visual price patterns which represent different species of fish specific to the FX and Futures markets. The systems specialize on 3 species of juicy fish — which come in sizes from small to huge depending on their age. Each species has its own particular personality, characteristics and behaviors. Once you get to know them really well, you can sense them from a far distance just as a shark can sniff prey from far away.
Because price patterns are fractal, focusing on a price pattern (or the fish species) makes much more sense than specializing on an individual timeframe and/or symbol. Remember, scanning more timeframes and more symbols means you will be hunting a much bigger hunting territory and you will find many more opportunities. A shark has a big territory, too, so he can wander around far and wide looking for the juiciest prey. Isn’t that what we are looking for?
Every hunt, however, does not guarantee you a fish. Sharks understand this easily, but traders often need to learn this lesson first. However, you will always find a fish to evaluate, measure up, and then eventually hunt. The patterns are everywhere at any time — same as the fish in the ocean. Sometimes you might just see a few opportunities while some time later you find a big swarm.
The Hunting Process
Do you need to hunt for every fish (respectively trade every price move)? No, not at all. As a trader you want to be really selective — as selective as the shark is on a hunt. Do you remember how a shark approaches his prey while seizing it up real close before he even thinks about starting an attack? This is the phase of trade evaluation during which you want to determine the quality of your trade pattern. As a clever hunter, you only want to put a measured amount of risk on the line when you have a really nice, high-quality pattern in front of your eyes. Only go after the juiciest fish — we call these No-Regret Trades. Everything else risks your money on a mediocre or poor bet. Sharks do not do this, so why should you?
If your hunt was successful and you have eaten a lot of fish already (i.e. you have reached your weekly R goal), then you can settle down and call it a day. On other days, you may not be in the right mood or you may have other things to do – so just do not hunt on these days. You can rest knowing that there are always fish out there growing and reproducing every day in the big ocean. If you pay attention and keep your eyes open, then you can trust to always get an opportunity out there to satisfy your needs.
When trading the markets, think, feel and act in the same way as a shark would do! To succeed in the market, I coach my trader students to become part of that “Group of Big Fish” who feed on the smaller fish. My Masters’ Class Traders are part of that group already. So can you, too, if you take the decision to move up the path of your Trader Development. Learning the systems I trade & teach at my Forex & Futures Trading Systems Workshops might be the first step in that direction.
See some recent Testimonials from some Masters’ Class Traders who are all sharks in their own very special way!
And see as well my previous article Become the Hunter Yourself.