Graeme Kennerley

Support and Resistance levels can be used as a key element to any trading strategy. They give us a precise area to look for trading opportunities around and visually they are easy to locate.  

Here at Trade With Precision (TWP) we teach a small range of trading strategies that, if applied correctly and over a large enough sample set of trades, will stack the probability of success on the trader’s side. These simple strategies are always in the direction of the overall market trend and have a “check list” of essential criteria to be met before placing an order in the market.  We call this ‘technical trading’ and it brings order and consistency to an otherwise random and chaotic market. 

Getting what we want from the markets often seems to come at a great cost and it is this struggle that confuses and confounds many of those who start out on their trading journey.  It is often the cause of the majority of would-be hopefuls who give up in their quest for trading success.

A road map shows us where we are at any one time and how we can get to where we want to go, whereas a weather map shows us the weather at present and also the weather we can expect over the next few days.

But neither the road map nor the weather map is much use to us if we do not know how to read them.

We always recommend that traders only ever risk 1% of their trading capital on any one trade; this protects their trading capital as well as their emotional capital.  This means that, in a losing streak of, say four or five trades, they still have capital to trade another day and their trader mindset is not knocked around by the experience.  We have analysed the charts, placed our order, defined and accepted the amount of the risk, then allowed the markets to determine the outcome;  stop or target - whichever comes first.

They are Huge, really Huge and a trader only needs the most minuscule slither of that market to make a substantial income.

Let me put it like this; an average three bedroom house with one bathroom costs about $200,000 to build and that is not including the land, just the basic build price. It takes about 12 weeks to build that house. 

Many of us will be taking vacations during the July and August period now that the northern hemisphere summer is upon us. The question is what do we do about our trading? Do we take a complete break? Do we leave one or two trades on, but not open the charts till we return? Do we plan to carry on trading whilst we are on holiday with family and friends?

If there was one thing, and one thing alone, that freed me from the market and allowed me to interact on my terms, on my conditions, to enter and leave the market at will and not be battered by the vagrancies of sudden and unexpected market outcomes, it was understanding and then applying this Paradox of Trading.  

A lot of people say to me that trading must be a terribly risky business and why would I want to enter such an arena when there must be other far safer ways to make a living.

My answer is always; “Yes, there are safer ways to make a living but there is no other business where I feel safer than in trading!”  

In this week's free market outlook Graeme Kennerley takes a look at the JPY pairs and explains a potential trade that he is stalking which is now setting up on one of the majors.

NB: For the highest quality viewing click on the wheel in the bottom right hand corner of the video and select 720p.  This will dramatically increase the video image from the default setting.