Why Should You Track 40 Charts from Day to Day?
Good question. Why? If you’re not going to trade them, then what is the purpose, right? Consider this: there are only 8 currencies that matter: EUR, GBP, USD, JPY, CHF, AUD, NZD and CAD. How many crosses does this make? 6 majors and 7 yen crosses just to get started. That makes 13. How about the AUDNZD and the CADCHF? That makes 15. Add in EURGBP, EURCAD, EURNZD and EURAUD. Then add in the others that match it: GBPCHF, GBPCAD, GBPNZD and GBPAUD. How many are we up to now? 23. Add in NOK, SEK, MXN, ZAR, TRY and the DXY (USD Index). You are up to 29. Add in a few stock markets and you approach 34. Add in the AUDCAD, NZDCAD, AUDCHF and NZDCHF. You’re at 38. You see where this is going?
“Oh! I don’t have time for all that! I don’t trade half of those anyway!” You might say. I hear you, but again, let’s consider this ok?
Remember the story of Bill Lipshutz and his hedge fund manager? If you are not familiar with it, his boss “tested” Bill many times. He would just ask him simple questions like this; “Bill, will you step into my office please? Bill, what did the pound open up at today?” Bill would answer. Perhaps another day he would ask him; “Bill what was the high on (such and such) today, oh, and its low too?” Bill would answer.
Let me ask you what it would have been like if Bill said: “Sorry sir, I don’t know.” Can you imagine that he would have lasted long swinging fifty million dollars at a clip? I doubt it.
Imagine that your trading plan is the Account Manager and one day your trading plan walks over to you and says: “Hey, where is the AUDNZD trading at? Is it in an uptrend or a downtrend? Is it near support or resistance? Is it about to turn and spring in the other direction?” And you would say what? What is your answer? Is it “I don’t know?” Imagine you’re trading plan/Account Manager saying to you: “And you expect me to allow you to buy or sell AUD or NZD crosses?! Are you out of your mind?!”
The Account Manager approaches you one day and says; “Hey, what is the DXY trading at? What is gold trading at? Where is oil? What price and what was its range today?”
And you just answer: “Well, quite honestly, I don’t know. I have not looked today.”
You get my point now? And you want to be a trader? Or do you call yourself a trader? Do you think you have a right to manage millions of dollars?
I contend that if you are going to actually be a trader in the currency markets, you better make darn sure that you know what is going on! You need to literally keep your finger on the pulse of the markets from the moment you wake up to the moment you go to sleep. You better know where the GBPAUD traded at. You should seriously know if all the yen crosses are up or down and where the supports/resistance spots are. How can you actually trade the majors or the yen crosses and not look at the DXY? Is this sane? Is this rational?
Do you believe you should have a right to trade millions of dollars? Wow. I hope you see the issues here. A real trader does his freaking job! He is on top of it. He/she is working; keeping all things in mind… ears to the news and all the various talking heads, central banksters and whether they are hawks or doves. Geo-political events do not escape the real trader. Real traders use 6 to 8 monitors. Why?
Because they need to monitor the moves of about 40 currency, index, and stock market charts that matter… because they know each one effects the others. There is a pull, there is a flow and real traders are seriously on top of all that matters from before the sun comes up to long after the sun goes down. There is a ton of money at stake here every single day.
If you ever hope to earn millions, you will not shy away from this responsibility. Consider what I said well. Just imagine you had a boss letting you trade 20 million at a clip and that he was checking up on you daily or weekly to see if you knew what was going on. Just imagine your job of being a trader was at stake if you could not answer as Bill did. Do your job trader…. and do it well. No room for slackers here. Zero.