How To Prepare For Longer Term Trading Opportunities
This video provides some tips for generating more medium-term to longer-term trade ideas. We have just added some further great resources for you on our page here: https://financialsource.co/how-to-prepare-for-longer-term-trading-opportunities/
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We have a question from a new subscriber saying they are often swamped with their regular job and can find it rather difficult to look for upcoming med-term trading opportunities, and wanted to know what type of things we look at to prepare for a month ahead instead of just the week ahead.
Thanks for the question, and it’s a great one because I think a lot of traders find themselves in the same challenge. So, jumping into the answer, there are a couple of things you can look at in order to maximise your time in this regard.
The first thing to do is to have a look at your calendar for the next month, find all those dates where you have central bank meetings as well as major economic data releases such as employment figures, Flash PMI numbers, Inflation numbers etc.
As these events often cause increased volatility they are a great way of planning your trading around your schedule, and the good news is it’s not like some random unexpected or unscheduled news event hitting the wires, these events are scheduled which means you will often get a heap of valuable and helpful resources in the form of previous that can help you prepare for the events.
Apart from looking at the calendar, you also need to consider your current macro themes or macro drivers in the market and how that might trade around some key upcoming events. Where we are right now for example in August 2020, the virus is still very much a threat and a problem, and we have the US elections coming up in a few weeks, so expect vaccine developments to be a growing focus for the current US Administration.
Then turning to another example of course is the ongoing tensions between the US and China, as we head close to the elections we are bound to see more political posturing so keep those type of things in mind when you are trying to plan for the month ahead. Of course, you won’t be able to plan for unexpected news events relating to these themes of course, but you can keep them in mind when you are evaluating your trade risks.
For example, currently we have a longer-term trade idea for the AUDNZD which we released in the terminal last week. That is a trade we are probably going to run for at least a couple of weeks and months, so we are less concerned about the short-term events for a trade like that, but of course, if a short-term event leads to a change in the bias that is something we need to prepare for, so think of that in terms of your risk management as well.
The other thing you can do with your time to better plan for upcoming med and longer-term opportunities is to read up on investment bank and investing articles and resources.
Personally I have found some great trading opportunities in the past when I did some additional research and found articles that spoke about specific trading opportunities ahead of time, and when the dominos started to fall in place I had already done my research and were able to capitalize on those ideas, obviously don’t just read any old article or believe any old writer, make sure the premise and thesis makes sense of course, but don’t downplay the importance of additional research when it comes to longer-term trading opportunities.
Often times it can be as simple as waiting for a central bank policy divergence, but other times it might be something you have not even thought about before and can add another dimension to your preparation.
So, hope that, helps, any other questions don’t hesitate to let us know.
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