Directional bias in trade planning | Forex Factory

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Directional bias in trade planning

  • #1
  • First Post: Apr 25, 2021 2:25am Apr 25, 2021 2:25am
One of the things that hurts most people with being able to have consistent 60-85%+ trading results is people tend to have a directional bias when they trade.

You have to be able to enter into a trade and be completely objective.

If you presuppose that a given pair is going to go one way, you are already setting yourself for a limiting directional bias.


Don't trade what you think the market is going to do, trade what it does.

Remember that many indicators are lagging, and take this into consideration when you plan out your trades. This is why I trade naked charts, or nearly naked, with minimal overlays.


As a contrarian intraday price action swing trader, I really just need to be looking at the charts at the various timeframes I study to evaluate where my entry/exit points will be.

Cheers! And happy trading.
Love to talk on Discord: DividendGamer#1324
  • #2
  • Apr 25, 2021 9:39am Apr 25, 2021 9:39am
Quoting Varkeer
...Don't trade what you think the market is going to do, trade what it does. ...
You cannot get away from directional bias when trading, otherwise just flip a coin.
  • #3
  • Apr 25, 2021 9:45am Apr 25, 2021 9:45am
Yeah I think I have to disagree with OP. Having a directional bias is part of a good trading strategy, it can provide an edge.

For example if you have a long term bias based on macroeconomic data and you know that based on certain factors you believe that overtime a certain currency will go down , this can help to weed out potential bad trades.

With that being said, you can be wrong so it is important to keep up to date with news and events as your directional bias should also have some flexibility to change.

All the big players have directional bias when they trade but they also hedge/use some type of good money management to ensure they aren't overly invested on one side.
  • #4
  • Apr 25, 2021 10:54am Apr 25, 2021 10:54am
Quoting viptrading
Yeah I think I have to disagree with OP. Having a directional bias is part of a good trading strategy, it can provide an edge. For example if you have a long term bias based on macroeconomic data and you know that based on certain factors you believe that overtime a certain currency will go down , this can help to weed out potential bad trades. With that being said, you can be wrong so it is important to keep up to date with news and events as your directional bias should also have some flexibility to change. All the big players have directional...

Don't misunderstand my point. Recognizing a trend and allowing the market to confirm it is a good thing.

But you don't want to force the trend to bend to only your ideas/lines. Why I trade naked charts.

Most people don't know how to understand how the big macroeconomic plays affect the markets. They think too small.
Love to talk on Discord: DividendGamer#1324
  • #5
  • Apr 25, 2021 10:57am Apr 25, 2021 10:57am
Quoting DojiSan
{quote} You cannot get away from directional bias when trading, otherwise just flip a coin.

Of course you can. It's all about probability and what the market is doing.

This is why I can get such high win rates, like right now I am at 90%+ since March 19th.

I let the market dictate where I enter and what direction I trade.
Love to talk on Discord: DividendGamer#1324
  • #6
  • Apr 25, 2021 1:47pm Apr 25, 2021 1:47pm
Quoting Varkeer
{quote} Don't misunderstand my point. Recognizing a trend and allowing the market to confirm it is a good thing. But you don't want to force the trend to bend to only your ideas/lines. Why I trade naked charts. Most people don't know how to understand how the big macroeconomic plays affect the markets. They think too small.
Where I get my directional bias is not from charts alone.
If you trade only charts you are at a disadvantage. You may be able to profit from it but personally I like to use fundamentals to confirm my bias, and then look at charts last...

But, to each is own.
  • #7
  • Apr 25, 2021 7:31pm Apr 25, 2021 7:31pm
Quoting viptrading
{quote} Where I get my directional bias is not from charts alone. If you trade only charts you are at a disadvantage. You may be able to profit from it but personally I like to use fundamentals to confirm my bias, and then look at charts last... But, to each is own.
Yep, cheers, lots of different ways to trade
Love to talk on Discord: DividendGamer#1324
  • #8
  • Apr 29, 2021 4:47am Apr 29, 2021 4:47am
Not enough time has passed,
but since I have no "directional bias" and am very flexible to change operation side,
everything has been smooth
no indicators, just a few statistical facts to guide
much more MM than TA

regards
Newbie trader
  • #9
  • May 8, 2021 6:14am May 8, 2021 6:14am
That's great, just keep the mental side strong.

Consistent trading is 70% mental, 20% position sizing and 10% trade setup.
Love to talk on Discord: DividendGamer#1324
  • #10
  • May 11, 2021 6:15am May 11, 2021 6:15am
You can choose to trade with or without a bias, and obviously, there will be pros and cons to both sides.

Without bias:
Trade what the market is telling you,
Be objective,
Quick ins and outs.
Without a bias, you might be able to avoid some losses,
** You are looking to have fewer losses and bank singles and doubles **

With a bias:
When possible create a forecast for a probable scenario,
Trade what the market is telling you,
Be objective,
Greater ability to hold trades for longer,
When your bias is wrong and your not flexible to change your opinion, you can get hurt,
** You don't mind have a couple of losses before getting it right and have a great trade**

See it like this, if you want to trade quick ins and outs then you don't need a bias but if you want to be a great trader you must cultivate the ability to form a directional bias, at least sometimes.
All great traders have opinions about the market and trade their opinions.
  • #11
  • Jun 18, 2021 8:11pm Jun 18, 2021 8:11pm
Quoting crashcar
See it like this, if you want to trade quick ins and outs then you don't need a bias but if you want to be a great trader you must cultivate the ability to form a directional bias, at least sometimes. All great traders have opinions about the market and trade their opinions.
But what is wrong with quick ins and outs? A great trader in my eyes doesn’t needs to have cultivated anything instead of ending up with a greater bankroll after he started with trading the moment he stopped/retired from it but thats it. If all these „great“ traders with all their directional biases and forecasts would do as good as they sound everywhere, then I really wonder about the 80-90% figure of people losing according to brokers statistics
  • #12
  • Jun 19, 2021 11:43am Jun 19, 2021 11:43am
Quoting Varkeer
That's great, just keep the mental side strong. Consistent trading is 70% mental, 20% position sizing and 10% trade setup.
100% false, completely wrong!

ANY trade you take ITS NOT GOING TO IMPROVE with a better "mental" approach !! once its running, thats it: you either placed yourself in the market in the right place at the right time or you didn't.. period; no amount of mental "powers" are going to change this, ever!!

Price reading skills and the right math skills to manage a trade once its running its all that is needed, plain and simple
  • #13
  • Jun 20, 2021 10:22am Jun 20, 2021 10:22am
Quoting havo
{quote} 100% false, completely wrong! ANY trade you take ITS NOT GOING TO IMPROVE with a better "mental" approach !! once its running, thats it: you either placed yourself in the market in the right place at the right time or you didn't.. period; no amount of mental "powers" are going to change this, ever!! Price reading skills and the right math skills to manage a trade once its running its all that is needed, plain and simple
I guess he meant having the right mental strength with view to long term success. For sure that doesn't change the outcome of any particular trade.
  • #14
  • Last Post: Jun 21, 2021 1:10pm Jun 21, 2021 1:10pm
Quoting DojiSan
{quote} You cannot get away from directional bias when trading, otherwise just flip a coin.
I've got one of those

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