21 March, 2016
For every trade you enter, you need to have a valid reason, which is also identified as Logic or Rationale. You are looking for this area to enter since this area is persistent by whatever system discovery technique you have noted in your Trading Plan.
Crossover of two moving averages or price hitting resistance on a Fibonacci retracement level is a good example. Your potential trading area positions between current price and your entry trigger.
It is strongly suggested that you take a screenshot of your chart showing that area. Make it a habit of having screenshots of your charts. So that when it is time to evaluate your trades, you will have the ability to see what transpired visually and this will help train your eyes to see the potential chances or deceptions to avoid on your charts in actual events.
This will remind you the reason why you entered the trade, or make you see something that you may have ignored.
Potential trade area is where you have faith that you will have an advantage that you trade with a high possibility of success and that the reward/risk percentage is in your approval. You must determine, for yourself, how you want to meet this condition.
The moment you sit down in front of your computer, you should be “ready” to trade. The possible trading area is your main goal. This will save you from entering a trade without any plan.
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