How to Trade

Don’t chase the market.

One of the biggest problems we have is missing trades that would have been profitable.

In other words, you have the right ideas but you failed to pull the trigger on the trade at the right time. Often to add injury to insult, the market then moves in the direction you correctly predicted. Being human you suffer a chromic FOMO moment.

So you pull the trigger and enter too late, when many are now taking their profits to the bank. The outcome is usually a bad entry, with an over leveraged position that gets stopped out as a loss.

This is a mind game we need to conquer to be a successful trader.

Chasing the market is understandable, but rarely does it pay off. It is far better to wait for a correction or retracement. This takes strength of character and patience.

One of the reasons I use point & figure charts is because it shows us who is controlling the market, the buyers or sellers. If we can determine where the areas of supply and demand are found. We can find ideal entry points.

There is a technique in P&F that is a guideline, not a rule.

So it is not perfect but it is extremely helpful with finding entry points. In Point & Figure it is called the 50% guideline.

1.This is how it works. You simply count the boxes in the columns.

2.The Entry and Payout.

3. If the correction goes beyond 50% it’s a reversal signal

From the analysis above, your trade sequence should be as follows

  • Enter buying at 1.2120.
  • Reversal Signal at 1.2160 to Sell (take profit on long, if not already done so)
  • Enter Selling at 1.2180
  • Reversal Signal at 1.2140 to Buy (take profit on short, if not already done so)

The price tells us who is in control, not a time, nothing is more powerful than the laws of supply and demand.

To learn how to use Point & Figure charts to maximise your profits and minimise your risk, contact

Published by Neil Callard

Forex Trader and Educator. 30 years trading experience, of which 20 years was market making in major currencies in large international financial institutions.

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