Follow These Four Steps Before Rushing Into a Trade

This simplicity allows traders to be nimble and identify the best trading opportunities. [Jeff Clark's Market Minute]( Follow These Four Steps Before Rushing Into a Trade By Imre Gams, analyst, Market Minute As a true multi-asset class trader, I could be trading stocks, bonds, commodities, or currencies during any given week. And while each of those markets are different from one another – how I approach them is the same. That’s because I only need to go through the same four steps and answer the same questions before taking a trade. This simplicity allows me to be nimble and identify the best trading opportunities… Recommended Link [[MUST SEE]: Instant cash in 3 seconds?! Challenge accepted 👀]( My name is Jeff Clark... And I’ve got a challenge should you choose to accept it: [image]( Take away my wallet, cash, and all credit cards... Send me to any store or restaurant in America... And in 3 seconds I’ll buy anything I want – using none of my own money. [Click here to watch how I do it.]( -- Four Questions to Ask Before Your Next Trade Thorough analysis on each trade is vital for success. The following questions prevent me from rushing into a trade just because the market is moving… - What’s the overall trend? Is it up, down, or sideways? - What’s the chart pattern? Is it a trend continuation pattern or a reversal one? - Does the momentum in the market back up my trend and pattern analysis? - What’s my T.E.S.T. (timeframe, entry, stop loss, and target)? I must clearly answer each question before being able to move on to the next. If I can’t answer a question, then I don’t have a great trading opportunity in front of me. Free Trading Resources Have you checked out Jeff's free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. How to Apply This Process to Your Trades Now let’s look at an example of how I put together a trade using these four steps. Below you’ll see a coffee futures price chart. It’s a market I keep a close eye on because of how volatile it can be. Take a look… [(Click here to expand image)]( Here’s how I would approach this chart using my four steps… - The trend is clearly down. Since hitting its August peak, coffee has declined by nearly 40%. - The chart pattern I’ve spotted is a potential reversal in the making. The Relative Strength Index (RSI) at the bottom of the chart is putting in strong signs of bullish divergence (blue line)… which happens when a market continues to trade lower, but the RSI begins to trend higher. The RSI bottomed out in November and has started to trend higher. At the same time, coffee has steadily traded lower. - Strong bullish momentum is needed to confirm the potential reversal pattern from step two. That’s why I’ve marked a key level (red line) on the price chart. This key level comes in at $173.55, the recent high from December 28. If the market can trade through this level, then it would be a very convincing sign of bullish momentum. - Now, we’re left with answering our T.E.S.T. Timeframe: This price chart is of the daily timeframe. That means that if a trade is triggered, then one could expect it to last several days or a few weeks. Entry: I would use a break of the key level to trade coffee. So, a break of $173.55 to the upside would be a great entry point. Stop Loss: The most recent low in the market would make for a great natural stop loss level. Right now, that would mean setting a stop loss at $142. Target: I would set a target around the 200-period moving average (MA – green line). Right now, that would mean setting a target at a price level of $204.36. [This is the new normal… Don’t be left behind by a new reality]( Always Stick to Your Trading Plan And there we have it. A very simple and straightforward trading plan for coffee futures. If coffee is a bit of an obscure market for you, then that’s OK. The bottom line is that you can follow these four steps on any market you choose. This framework has helped keep me out of trouble over the last 14 years, and I hope it will serve you just as well. Before you rush into a next trade, remember to slow down and have a trading plan in place. Happy trading, Imre Gams Analyst, Market Minute P.S. It is now more crucial than ever to have a solid trading plan in place… Starting on January 25, [a strange anomaly]( is set to hit the markets. Hundreds of popular stocks could experience one-day drops of 10%, 20%, 30%, or more. Luckily, my colleague Jeff Clark is willing to share a “crash-proof” strategy that could not only protect you from the mayhem… but also help you accelerate your retirement in just 44 days. To learn more, [click right here]( for details on his special strategy session. Reader Mailbag How has preparing with technical analysis helped you become a better trader? Let us know your thoughts – and any questions you have – at feedback@jeffclarktrader.com. In Case You Missed It… [Boost your retirement from $4 stock?]( A massive $130 trillion energy shift is underway. And this $4 stock is at the center of it all. It’s backed by 5 billionaires. And Ph.D. Economist and Investor Nomi Prins just put together a quick 30-second demonstration to show you why this tiny company’s breakthrough could touch every man, woman, and child on the planet and make you rich in the process. Watch the 30-second demo [here](. 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