Do you tend to over-analyze the charts before acting? This doesn’t guarantee better results.
Here’s what you can do to shorten the process and keep it organized and straightforward, eventually also improving the chances of winning.
Too many traders stick their noses to the screens for too long, trying to analyze, verify, double check, re-analyze, add indicators, remove them, adapt to market conditions that have changed in the meantime, re-analyze, rinse repeat.
And when they do eventually place a trade, is it the perfect one? Was it worth the effort? Probably not. Some will come to the conclusion that they didn’t do enough checks and will find themselves working even harder next time, diving deeper into the charts.
Others will be discouraged and will try the opposite approach: going by the gut feeling and acting spontaneously, without any indicators. This isn’t productive either. There has to be some middle ground.
This is good balance between serious analysis and a practical approach.
What is your process of preparing for a trade? Are you organized?
Here’s what you can do to shorten the process and keep it organized and straightforward, eventually also improving the chances of winning.
Too many traders stick their noses to the screens for too long, trying to analyze, verify, double check, re-analyze, add indicators, remove them, adapt to market conditions that have changed in the meantime, re-analyze, rinse repeat.
And when they do eventually place a trade, is it the perfect one? Was it worth the effort? Probably not. Some will come to the conclusion that they didn’t do enough checks and will find themselves working even harder next time, diving deeper into the charts.
Others will be discouraged and will try the opposite approach: going by the gut feeling and acting spontaneously, without any indicators. This isn’t productive either. There has to be some middle ground.
- You already have a system and you’ve seen something interesting in the charts.
- Use a checklist to see if the trade opportunity matches all the criteria of your system, including the risk reward ratio, risk management, and anything else. Everything should be on the list.
- If conditions aren’t met, let it go. Don’t look for a position that isn’t there. This will have dire circumstances, especially if you win this specific trade: it will encourage you to constantly break the rules, take bigger risks and eventually lose more money.
- If conditions are met, make a quick double-check to verify the exact checklist that you use for your system: don’t omit any important condition and don’t add any extra indicator – just make sure that you didn’t overlook anything the first time around.
- Place the trade!
This is good balance between serious analysis and a practical approach.
What is your process of preparing for a trade? Are you organized?
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Japanese Yen trades just shy of 157.00 versus the USD
The Japanese Yen weakens across the board after BoJ announced its policy decision. A shortlived spike in the Yen may be testament to an attempt by the Japanese authorities to intervene. US PCE Price Index shows higher-than-expected inflation but does little to impact USD/JPY which almost touches 157.00.
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.
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