What Are the 3 W’s of Trading?

Do you know what the 3 W’s Mean for Trading?

I have simplified trading into what I call the 3 W.s, What, When and Where,

(The Amazing Trader (AT) is a real time charting algo known for its “amazing” chart levels and the patterns they form that can be translated into trading strategies.)

WHAT side of the market to trade

The key to trading and at least 50% of the battle in becoming a successful trader, is identifying WHAT side of the market to trade. As you will see I call it the strong side. My theory is the forex market has a never ending quest to run stops. When there are no stops left to run in one direction, it will lose momentum and probe the other side in search of stops.

As you will see, this is just one component of identifying the strong side to trade but an important one. In simple terms, the strong side of the market to trade is the side least likely to see stops run against your position.

When red At lines dominate, the strong side id the buy side to trade … vice versa when blue lines dominate the chart.

WHEN to place a trade

I hate the word hope in trading. When you put on a trade do you hope that you timed it right and will not get stopped out before your trade has time to work? All this does is cause stress and we all have enough stress in our lives.

There is no place for hope in my trading dictionary. I prefer to time my trades based on patterns identified by Amazing Trader lines. These patterns indicate when there are imbalances in the market, which, in turn, suggest momentum is building on one side or the other. Following this strategy allows a trader the opportunity to time a trade that offers a greater chance of immediate gratification than just hoping you timed it right.

So timing your trades using AT logic not only can improve your odds but also ease some of the stress as you look for a quicker outcome to your trades. It will also have you trading on the “right side” and remove the temptation to try and catch a falling knife or standing in front of a runaway train before there is a reason to do so.

As blue (or red) lines start building to the down (up) side, it signals momentum and the time to trade while the market is out of balance.

WHERE to place a trade

Where you place your stop can make the difference between being a winning or losing trader. How many have had the right idea, been stopped out only to see the market eventually move in the direction of the original trade>
Stops should not be based on how many pips or percentage of capital you are willing tin lose on a trade. A stop should act as insurance, which means it should not get triggered ff your trade idea is right. It should only get triggered if the trade idea is not working out.

The strategy is to identify your stop first at the most recent AT line that preceded a new low (high)and base the entry on your stop. As long as the risk tolerance is within your range, the trade can be executed,

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it is outside your risk tolerance, then either reduce leverage or ignore the trade.

Summary

This just scratches the surface of a way to approach trading. It is based on common sense and an approach that shows you not only how to execute trades using it but why it works.

Picking the strong side to trade raises the odds as it is the side least likely to see stops run against it.
Timing your trade can increase the odds, especially if you identify AT patterns that indicate momentum is building in one direction or the other. .

Finally, placing a stop at a level that should not get triggered allows your trade time to work, once again using the logic of the Amazing Trader.

The Amazing Trader offers a free trial period or is available at half price as a member benefit for joining the Global Traders Association (membership is free).