An Example: European Session 28 December 2015 Pre-Market Preparation
Pre-Market Checklist
Myself
Pre-Market Checklist
Myself
- Am I sufficiently hydrated?
- Yes.
- Am I fatigued from the night before?
- No. Had more than 7 hours of rest in total.
- How should I respond if I am?
- Breathing.
- Check previous day journal. What are my trading goals for today? For this month?
- Monthly goal: To react positively and constructively to conditions leading up to tilt.
- Daily goal: Do proper pre-market preparation and post-trading review.
News
- Check Twitter & EUR/USD news alerts.
- No news on the horizon.
- Asia markets are doing well -> EUR/USD slight bearish tone.
- Check FF for recent news and upcoming news.
- No news on the horizon.
- Form fundamental hypotheses/bias.
- Maybe a 1-2% bias towards downside.
- What are some upcoming news and do I want to trade them?
- N/A
Technical Big Picture
- Check technicals. What is the 4H trend? What is the 1H trend? What is the 15 min trend?
- 4H Trend is up. 1H trend is up. 15 min trend is up (?)
- What are the levels that I should pay attention to?
- 1.09646(S) -> Key 4H level/ point of inflection.
- VWAP: 1.097(S)
- Last week's high: 1.0984(R)
- Today's high: 1.09788(R)
- 1.10304(R) -> Next 4H key level/point of inflection
- 1.09329(S) -> Key 4H level of support
- 1.094(S) -> Asia Open/Low
- 1.1(R) -> Whole number
- Are there any specific technical patterns or facets that are appearing?
- No.
- Form technical hypothesis/bias.
- Given the trend-trend-trend-level prognosis, this at least adds 40% to the base rate.
- Giving back/trading below VWAP would hugely erode this to maybe about 15-20%
- Check base rate: What is the range of the pair during these hours in the past 60 days?
- Assume base rate is 40%.
- Synthesize different point of views into primary trading hypothesis.
- There's a 78% chance price will hit 1.1010 in the next 4 hours of trading.
- Mark out position initiating levels.
- Daily VWAP
- Session VWAP
- 1.09646
- 1.09593
- Form secondary hypotheses about these levels.
- There is a 85% chance price will hit 1.09646 before hitting 1.1010.
- There's a 65% chance price will hit 1.09593 before hitting 1.1010.
- Mark out intermediate levels. Form tertiary hypotheses about these levels.
- 1.09788: There's a 50% chance price will either consolidate or reverse at/below this level before hitting the next level at 1.0845.
- 1.09845: There's a 90% chance price will either consolidate or reverse at/below this level before hitting the next level at 1.100
- Determine how to make adjustments at various levels.
- Exit 30% above 1.09788 on supply appearing.
- Exit 50% at 1.09845 and above.
- Determine how to adjust for time decay and price movements.
- Not really relevant here because price is in a very tight range. If it breaks below the key levels and if the trend changes then many things are nullified.
- But generally, rough adjustments can and should be made. i.e. 30 minutes + adverse price movements -> 3%, 5%, 5%, 8%, etc.
Trade Ideas
- Determine lot sizing for the various trade scenarios.
- The main trade thesis is a trend-trend-trend-level trade. This is a A+ sort of set-up and deserves at least Tier 4+ sizing. Therefore size of 0.07 lot is appropriate on a 50SGD account.
- Finalise trade ideas.
- Long at support above VWAP on 1 minute.
- LONG ONLY until 15 minute trend changes.
- Long at 1.09646. (Hit out half as level breaks, get back to full on recovery above VWAP and holding.)
- Long at 1.09593. (Hit out half as level breaks, get back to full on recovery above VWAP and holding.)
- When long, look to cover risk at 1.09788 and 1.09845 and add back risk on ~40% retraces or when appropriate consolidation pattern appears.
- If 15 minute trend changes, and price holds below daily VWAP. It becomes a tier 1 scalp environment with downside bias. Look to capture 7-10 pip swings in the market.
- Visualise trade ideas.
- Check.
- Review goal.
- To react positively to conditions leading up to tilt.
- To do proper pre-market preparation and post-trading review.
- Review entry methods and remind myself of fundamental demand and supply rules in the market.
- retraceddss
- vanilla
- falsebreakout
- Add on tight consolidations and breakouts with minimal risk.
- demand: support + emotional sellers.
- supply: resistance + emotional buyers.
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