Trading the cart before the horse? How a catalyst can improve trading performance [Video]

You sit down to check the markets. You review recent price movements and consider potential trade ideas. But what happens next?

• You may quickly stumble upon what seems like a great trade idea but feel uncertain if it's too good to be true.
• You spend 30-60 mins delving deeper into the markets only to find yourself trying to figure out what to do next.
• Or you're putting in a lot of effort and mental sweat to craft a high-odds trade but it's not working out.

Sound familiar? If so, now there's a temptation to skimp on crafting a trading catalyst and game plan and jumping straight into a pattern or similar, right?

But you've now inadvertently killed the golden goose. Why's that?
Let me explain. Aside from the meaningless "noise", price movements are reactions to events. And as a trader, it's your job to uncover them.

Example ideas:

1. A counter move occurs in the market you trade when XYZ market opens. Not an elaborate idea, so not a large payer. But it's a catalyst that leads to tradable price movement.
2. Lifting COVID restrictions in China is a boost economically. A move up in markets, even if short-lived, is likely. But difficulties of investing in China mean traders look to express the trade via a proxy market. Look for the idea, followed by the proxy market to move in tandem. The second idea is more advanced hence it provides a higher payout catalyst to the first idea.

Watch a real-time catalyst on the AUD/USD: Using live trading mentoring to illustrate, you'll see a catalyst with depth and substance crafted on a big news day when explosive fireworks in price are the norm. A high-impact economic release is chosen because if you can craft high-odds trades on the toughest days, you can nail your trade ideas daily. Right?