How many trades can you expect each week?

It varies week to week, month to month

Now if I seriously had a dollar for every-time I was asked this question……… but hey it does have some validation and is important for traders to understand before they start cranking out 100 trades a day.

QUESTION

So really ………. ‘How many trades should you expect each week?’

ANSWER

How longs a piece of string?

On any given week there can be 100 trading opportunities or there could be none. It goes back to the old ‘reply question’ you get from the wise masters – How longs a piece of string?

The truth is, the number is completely different for each trader.

It comes back to a range of factors: risk appetite, capital at hand, trading strategies, time available to trade and how patient the trader is.

But coming back to a simple concept that covers all traders, think of it this way, and this is important to control your trading expectations:

How many ‘Low Risk – High Probability’ trades are their each week?

What do I mean by ‘Low Risk – High Probability’ = a Technical Trade with a Fundamental Driver!

These trades aren’t around each day but when they go off they return big profits.

How do I find these trades?

Well I keep a simple habitual routine whereby I check the charts (technical’s) and global economic calendar (fundamentals) each day.

That way I know where the key levels are (on at least the majors) and I know what key economic releases may have a major impact.

So when you look at the market this way the question of ‘How many trades can you expect each week?’ is going to be different each week as there are different releases each day and each month.

The cycle of data is never exactly the same.

Plus the Geo-political backdrop, another major Fundamental aspect to consider, can change very quickly and that can change the trading opportunities very quickly. It can increase them or decrease them.

If someone put a gun to my head and said ‘give me a number’ …I’d say on average there would be 3 crackers each week. That’s a trade with an 90% or above probability of success.

Every trader is different

So if you’re an extremely disciplined and patient trader you will wait for these…… so your answer is 3 trades each week.

If you’re a more aggressive risky trader and you really want to get stuck in then you may be looking at trades of a probability 70% and above. That way you may have 10-15 trades each week.

If you’re super aggressive and ‘wild’ then you may be looking at 50% probability trades. With this appetite you will have around 100+ trading opportunities each week. Basically every time you turn the screens on your trading regardless of what’s going on.

There’s two ways to look at this:

1. How many actual trades?

2. How many actual transactions?

It’s very important you’re not confused by the two.

Let’s start with No.1 ‘How many actual trades’?

When I say ‘actual trades’ I am talking about ‘trading opportunities’ as a whole. Like for example this week I have eye-balled 2 good trading opportunities so far: Selling AUDUSD and EURUSD on a rally back towards their respective resistance levels.

 

The basis for these trades is more technical then fundamental but let’s not go into that right now. What I want you to understand is there are 2 ‘actual trading’ opportunities coming up.

So that’s 2 trades this week that I can see clearly. But it’s only Wednesday and we have loads of other potential opportunities on the horizon with respect to the Fundamental releases that are schedule.

So by the end of this week we may in fact have 3-5 good trading opportunities.

This is completely different to No.2 ‘How many actual transactions’?

As I mentioned above we may have 3-5 good trades this week. Inside those ‘good trades’ we may buy and sell many times…. taking advantage of price retracements and general price action movements.

So in reality in amongst those 3-5 good trades we may have 20 transactions – whereby we buy and sell over and over.

This is very common especially when we have specific direction. You go with the momentum then take profit. Then reload on next move and take profit… and so forth. That way you can maximise the opportunity.

Note: this can often lead to less cash because if you square the position and the currency doesn’t retrace then you may be left with no position as the currency makes a big move. But that’s a different article!

The point is I don’t count all these extra transactions as additional trading opportunities. They are part of the ‘single’ opportunity.

OK do you understand that?

If not comment at the bottom and I’ll attempt to answer the question better.

So what can you do to safely increase the number of trading opportunities you have each week?

Well once again you can’t make trades up but if the calendar is full of releases and the charts are full of levels then you can simply expand your scope on them. For example you may generally focus on the ‘high’ impacting data releases – which I would suggest is a good idea.

But to give yourself a bit more scope for some trades start to incorporate some or all of the ‘medium’ impacting data releases.

What am I talking about?

Check any of the Economic Calendars out there – they are all the same. This one is Forex Factory.

 

As you can see you can exponentially increase the number of trading opportunities if you include the ‘medium’ impacting data releases.

How do I adjust to the various opportunities?

Now there’s a simple process of ‘trade size’ adjustment if you want to try and include more trading opportunities.

Well first of all I don’t limit the number of trades each week. On Monday I assess the economic data scheduled for release and then I’ll have a general idea of how many ‘potential’ opportunities there are for the week.

It’s the economic data that provides the currency movements. If there’s no economic data then the currencies would barely move.

Of course you need to consider the technical set ups every day. Some weeks there’s loads of great set ups and others, especially after big central bank announcements, there’s none.

But this is the simple technique I have employed for many years:

1. I grade the opportunity according to what I believe this is the probability of success. (this is generally a percentage)

2. I adjust my position size depending on the percentage

So if I see a trade with a great Technical set up and we have a major Fundamental driver putting the trade in play I would rate that at least a 90% chance of success, if not higher.

90% probability of success = full trade size (or even 150-200% of normal full trade size).

Note: I never consider any trade 100% probability, as that’s a recipe for disaster.

Now I know it may be hard for every trader to work this percentage out as it’s a major experience factor to judge the potential of a trading opportunity and that’s why we have the live trade zone to bounce those ideas around.

But in general here is a table of how I adjust the trade size – it’s common sense really.

Probability of Success                                Position Size

90%+                                                      10 lots (or potentially 20-30 lots if I’m super confident)

80%                                                          8 lots

70%                                                           7 lots

60%                                                           6 lots

50% (lowest you would go)                  5 lots

So basically what you’re doing is adjusting your ‘risk’ according to the opportunity. The higher the opportunity the better the chance to make cash, so you want your full trades on those opportunities.

What most traders get into the trap of is increasing their trade size regardless of the opportunity. Purely based on recent success most of the time. They take huge hits on trading opportunities that they should have stayed away from or at the very least decreased their exposure on.

By following this method and incorporating the ‘4 consecutive loss rule’ you will be set up to trade like a Pro and you will definitely avoid those large draw-downs that really slow you up.

Track your ‘judgement’ of the opportunities

This is another good reason to keep a trade journal that you can reflect back on. It will help build confidence and experience, the two major factors that will determine if you are going to be successful or not.

So now when someone asks you “how many trades do you do each week?”, you have a correct answer: “How longs a piece of string?”

I myself well I trade the data somewhat aggressively and this is high risk. Some weeks I go hard and others I stand back and let it go. It really depends on market volatility.

But I do really wait for the 90% trades. So that’s roughly on average 3 trades a week. But that’s also maximum trade size.

If I see the data impacting a lot I’ll decrease my trade size and whip around smaller trades in smaller ranges or breaks etc. Every day is a new day!

That may be too hard for some traders to wait for and that’s why I have written this article.

If you need help understanding this concept please feel free to comment and I’ll expand further if need be.

Brad

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  1. Awesome article Brad. Brought a lot of clarity to a question I’ve asked myself countless times.