Flawless Execution - GBPUSD Trade Review

Flawless Execution is a word we use at Trade with Precision allot. Simply put, flawless execution is executing your strategy perfectly according to all of your trading strategy rules without making any errors along the way. If you can flawlessly execute each and every single trade that sets up according to your rules then you should come out ahead after a given number of trades. Using an example from a trade which setup this week on GBPUSD, we will take a deeper look into how we can achieve flawless execution in our own trading.

Firstly to be able to flawlessly execute a trade we need a well defined trading strategy that has an edge in the markets. Without a well defined strategy we won't know if the trade that we took was actually a trade that we should have been in or not. We also need to make sure we are executing the trade according to the strategy rules. You will get better and better at this overtime with experience when you start to learn what type of trading conditions the strategy works better in and what trading conditions you should avoid. Generally when a trader starts trading a new strategy, they won't be executing it the same way an experienced trader would, so there's certainly a learning curve to every strategy even when the rules are well defined.

Another aspect of flawless execution is actually taking each trade that sets up according to your strategy. Once you have gained experience trading certain strategies you should have a pretty good feeling of knowing when a trade meets your strategies criteria. The next key is to act on this feeling and actually put on the trade without hesitation. Once you place that trade you should be happy with it regardless of whether it goes to stop or target.

This week one of the strategies we trade here at TWP setup on GBPUSD. The setup is shown below on the 4hr chart. Price is in a solid downtrend on not just on the 4hr chart but also across multiple timeframes. It has pulled back into the area between the 10 and 20 period moving averages which we call the sell zone and the latest candle has closed as a bearish candle, signalling that price may be ready to sell off again. Our entry and stop levels are based off a break below the bearish candle with a stop above the swing high outlined by the blue lines. Everything about this setup met our trading strategy criteria so all we needed to do next was put on the trade without hesitation. There was no need to umm and arh about this trade and wonder if it would win or lose because it met all our rules so quite frankly, it's worth taking.

Once a trade is triggered it's left for the market to decide the outcome with either the stop or target being hit, whichever comes first. The stop and target levels are predefined and in this case the target was just over 2:1 Risk:Reward which would have us out well before the previous 4hr low. As you can see in the post trade screenshot below, the trade worked out well and went on to hit our target after taking a bit of heat early on. That illustrates a flawlessly executed trade from start to finish which has got to be the goal for all trades you take. Not every trade is going to be a winner however if you are able to flawlessly execute a strategy over and over again in the market then you should come out ahead.

If you're interested to learn more about the strategy used in this trading example then make sure you join our webinars next week as they take you through the strategy. Register for next week's webinars titled "Learn a 6 Step Trading Strategy" here: http://www.tradewithprecision.com/freewebinars

Happy Trading!

Regards,
The TWP Team