One of the hardest issues for any trader is to determine which market to trade. However, following our trade analysis procedure it is actually a lot simpler. Why? Because we determine which markets have a directional bias and then we determine the profit potential to decide which ones to trade. Here’s an example from this morning.
Which Market to Trade?
Here’s the overview for this morning (between now and 11am). A “0” indicates no bias (meaning the market is not tradeable until after a new analysis is performed at 11am or the 60 and 15 minute charts need to be utilized for short directional trades). The letter “L” means long bias, and the letter “S” means short bias.
Notice my asterisks are on the EURUSD and GBPUSD because they have both touch brackets and binaries available during my trading period. The GBPJPY, USDCAD and USDCHF do not have two hour binaries available until after 8am.
Knowing which market to trade (EURUSD and GBPUSD), allows me to focus on the entry mechanism. In this case, an entry came in on both symbols.
The risk on the EURUSD binary option was $33 with a profit target set at $75. The risk on the EURUSD touch bracket was $57. The risk on the GBPUSD binary option was $34 with a profit target set at $75 and the risk on the GBPUSD touch bracket was $48.
The targets were hit on both binary options. The EURUSD touch bracket was exited with $24 in profit for each contract (both 60 and 15 minute indicated overbought and a retracement was likely, which is likely to also produce another rentry). The GBPUSD touch bracket only made $10 per contract as price was struggling at the 60 minute ATR. However, another entry may be generated as price is at the ATR again.
While you may wonder why I did the touch brackets this morning, the answer is relatively simple. The initial profit potential was shown on the overview. However, the profit potential from the higher time frames indicated a higher potential.
The trade analysis takes me about an hour each morning to do (total of 12 markets are included in the trade analysis) and is invaluable because it allows me to determine which markets I want to trade and what the profit potential is on each.
In the Live Market Analysis and Coaching Sessions I teach you how to utilize the trade analysis worksheet each day to determine which markets to trade, as well as how to manage your trade once you are in.