In step 1 you will be introduced to several tailored techniques, which primarily include understanding the overall psychology and sentiments of the markets. This will enable you to enhance your grasp of the trend directions whether it is in a risk-on or risk-off market, allowing you to see the ‘big picture’. Furthermore, you will be able to make better decisions in choosing the type of instruments to trade for the day.
Step 2 focuses on the risks and aspects of money management where you will be introduced to simple formulas that will guide you to make better decisions on lot and position sizing. Traders are often misguided or misinformed in the ‘mathematics of trading’ due to their lack of understanding how to trade during the different market conditions described in step 1.
In step 3 the letter ‘I’ stands for either ‘Insights’ or ‘Insider information’. This part is mainly made up of the results of personal research done through non-biased channels that specialize in geopolitical intelligence and confidential bank reports.
Step 4 consists of combining elements within step 1 to step 3 in order to spot synchronicity, or in the language of trading it’s called ‘convergence’. This part simply ensures the concluded market trend in step 1.
Finally, execute the trade! Although step 5 may be the final step, it does not mean you should just execute the order at this stage. This means that in the last step it is crucial for you to have a clear and set decision of whether to take or not take the trade.