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Article / 02 September 2016 at 1:14 GMT

Diary of a trader: My day on the forex merry-go-round

Managing Director / Technical Research Limited
New Zealand
  • For 31 years I have earned my living as a forex professional
  • At the start of each trading day I analyse monthly, weekly and daily charts
  • I review Europe and US markets, gold and silver, crude oil
  • I analyse hourly and five-minute charts of major currencies and cross rates 
  • I make daily forecasts to subscribers and highlight a trade (but only if worthwhile)

By Max McKegg

Over the past 31 years I have earned my living as a forex professional; providing trading forecasts to institutional as well as individual subscribers the world over, in addition to trading on my own account. It has been a highly rewarding experience (both financially but also in terms of quality of life, enabling me to work where, when and how I like), in which I have been able to provide a more than satisfactory living for my family over the years. Furthermore, I have found it to be a thoroughly enjoyable way in which to earn a living and I still do (which is why I have no plans for retirement). merry
 Trading: a thoroughly enjoyable way in which to earn a living. Photo: iStock
I am often asked what a typical trading day looks like for me, so I thought I would briefly sketch this out for you.

  • At the start of each trading day I will have already analysed the monthly, weekly and daily charts (in the context of both Elliott Wave and classical charting) so my attention will focus upon analysis of the hourly and five-minute charts. 
  • I will review what happened in European and US trading hours, what the news was and what some of the “talking heads” are saying on CNBC, to gain a feel for market opinion and positioning. 

  • I will review what fundamental news and events are scheduled for the day and week ahead and I will reassess my analysis of key stockmarkets, gold and silver, crude oil (to name but a few) as well as key currency cross rates. 
  • Then I’ll begin closely analysing the hourly and five-minute charts of all the major currencies as well as any cross rates which are on my “trade watch list”. I liken the markets to a large jigsaw, where I am trying to find the right fit between the various chart chronologies. This may necessitate a change in my daily chart analysis and sometimes even in my weekly and monthly analysis as well. 
  • I will then be ready to make my daily forecasts to subscribers worldwide and to highlight a trade, only if there is a really worthwhile opportunity. My ideal trade set-up is satisfied when I have a clear technical structure (utilising Elliott Wave analysis and classical charting) with a definable entry level and a very favourable risk-reward. Such opportunities do not present themselves every day, so patience and discipline are required. This speaks to money/risk management, upon which I place considerable emphasis. 
  • If my analysis/forecasts reveal such a worthwhile trading opportunity then I will place a trade order, with my entry, stop and profit levels. Although I do not believe in “screen watching” all day long (regarding this as a fruitless, unproductive exercise which tends to both tire traders out as well as encourage over-trading) I am also dismissive of the much-hyped “set and forget” strategy. 
  • In forex trading, forgetting about one’s position can be very dangerous. I will check the market several times each day. When I have a trade order to place, I will review whether my entry level and attendant stop are both best-placed. If the market moves away from my entry level then I will seldom ever “chase the market” (unless there has been a major break above a key chart and mathematical pivot point) and will pull my order for that day. When I have a trading position, I will review my profit and stop loss levels each day, to ensure that they are appropriately placed. 
  • The next day I get on this same trading merry-go-round which has served me well for over three decades now.

 – Edited by Susan McDonald

Max McKegg is managing director of Technical Research Limited. If you would like an email notice each time Max posts a trade or article then click here or post your comment below to engage with Saxo Bank's social trading platform.
OrofitAccumulator OrofitAccumulator
Max, thanks for this. really worthwhile insight!
HI Max, i note you look at 1 hour and 5 min. Im curious why you use 5 instead of 10 as in my experience the 10 min chart seems to be most popular with professional traders, and for some abstract reason works best depending on the mkt.
Max McKegg Max McKegg
I find the 5 minute gives greater "definition" the Wave sequences which I try and interpret.
Roy Sihite Roy Sihite
What MA you often use Max? What else indicator in your chart? Do you use bloomberg terminal, eikon or dow jones for news? thanks
Max McKegg Max McKegg
I use Eikon and Moving Averages are not part of my TA tool box


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