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The Art of Stalking

The Art of Stalking

From Craig Cobb at Trade with Precision:

The key to a successful trade in my opinion is when all the relevant technical factors come together to give the strategy setup. Often it’s just a matter of turning your computer on, doing a scan and it just appears and other times it’s about planning out what your ideal scenario is then waiting for it. This is what I call stalking a trade and I want to share with you how I do it.

As we all know in trading it’s not just about getting market direction right. It comes down to direction and then timing and this is what our strategies are meant to help us with; the timing aspect. When I look at a chart that is trending well but doesn’t have a trade setup I start planning out what the best scenario would be.

Take the German 30 daily chart for example (below). It’s in an uptrend currently but there is no trade setup that satisfies my rules yet. I look at this chart and plan out that I would like to see a small bullish candle within the 10 and 20 MA and around 10,300 to 10,000. I will now add this to a watch list and watch each day to see if this unfolds.

20150129 twp1

Next is OJ (below). It’s currently in a down trend after a strong break of 140.00 but with no trade yet I start to plan. I want to see a pull back into 140.00 with a small bearish candle in the 10 and 20 MA. If I get this then it’s likely I will trade but for now it too gets added to my watch list for stalking.

20150129 twp2

USDCAD (below) has been in a strong uptrend and as of yet I have not had an opportunity to trade it. I don’t get frustrated at all but I do get ready. I am waiting for a pull back into the 10 and 20 MA around 1.2200 with a small bullish candle then I will be ready to strike.

20150129 twp3

Finally EURGBP (below) is on my radar for a different reason. There is a strong down trend on the daily but it’s the 4 hour I am stalking currently. I am looking for a flat support level with 3 precise touches for a possible break lower. Since I do not have this yet I draw in the level, add it to my watch list and keep a close eye on it over the next 12 to 24 hours.

20150129 twp4

I have only chosen a couple of charts and markets that I am stalking at the moment. There is also merit in looking to the lower time frames within the strongest trends to see if a setup occurs. The main thing I want to share with you is that even when there isn’t a trade setup right now there is still work going on in the background for full time traders. We are patiently planning our next move in the markets and with this planning comes confidence and control which in turns helps to keep emotions neutral. It keeps a clear, focused and precise head which can lead to better results because it stops one from jumping into anything that moves.

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