Successful forex traders are known to be highly dedicated to their craft. For them, the trading session does not close when they go home, and the trading week does not end when the weekend begins.
Indeed, most forex traders see trading as a lifestyle rather than a job. They live and breathe the markets 24 hours a day, 7 days a week and that is probably why they chose forex in the first place, since it is the market that stays open the longest.
But they are not always trading of course, as good traders know that it is not wise (nor healthy) to spend every hour of the day holding a position.
Instead, when forex traders are away from the markets they are forever going over positions and trade setups in their head, or looking at chart patterns from the day’s markets on paper. In short, they are using their spare time to test hypotheses in the markets.
However, the important thing to remember when looking at the markets at home, or anywhere else, is not to take a passive approach.
If you utilize a passive approach, you simply look at the charts; you may find some good ideas but you won’t remember any of them. In that instance your time is as good as wasted.
Take notes of your ideas and then go and compare them to the real market to see exactly how your ideas would have played out, bar by bar.
If you see a pattern that you think leads to a good buying opportunity, check the next few bars of the market and see whether your idea would have held up.
Indeed, a good idea is to do this process in reverse; that is, to print off some old charts, where you don’t know what occurs next and try and predict their movements. The more you do it and the more hypotheses you test, the better you will get at predicting the market’s turns.
Indeed, most forex traders see trading as a lifestyle rather than a job. They live and breathe the markets 24 hours a day, 7 days a week and that is probably why they chose forex in the first place, since it is the market that stays open the longest.
But they are not always trading of course, as good traders know that it is not wise (nor healthy) to spend every hour of the day holding a position.
Instead, when forex traders are away from the markets they are forever going over positions and trade setups in their head, or looking at chart patterns from the day’s markets on paper. In short, they are using their spare time to test hypotheses in the markets.
In the bath
Testing hypotheses in the forex markets can be done at any time, even in the bathtub. It is not uncommon for some traders to take charts with them wherever they go, so that they can look for patterns and work out trading ideas without the constant distraction of open markets and flashing quote screens.However, the important thing to remember when looking at the markets at home, or anywhere else, is not to take a passive approach.
If you utilize a passive approach, you simply look at the charts; you may find some good ideas but you won’t remember any of them. In that instance your time is as good as wasted.
Be scientific
Instead of looking at the markets passively, it’s important to be scientific. Any idea or hypothesis that you come up with at home needs to be tested so that the work you are doing is not a waste of your time.Take notes of your ideas and then go and compare them to the real market to see exactly how your ideas would have played out, bar by bar.
If you see a pattern that you think leads to a good buying opportunity, check the next few bars of the market and see whether your idea would have held up.
Indeed, a good idea is to do this process in reverse; that is, to print off some old charts, where you don’t know what occurs next and try and predict their movements. The more you do it and the more hypotheses you test, the better you will get at predicting the market’s turns.
Editors’ Picks
EUR/USD faces next resistance near 1.1930
EUR/USD has surrendered its earlier intraday advance on Thursday and is now hovering uncomfortably around the 1.1860 region amid modest gains in the US Dolla. Moving forward, markets are exoected to closely follow Friday’s release of US CPI data.
GBP/USD change course, nears 1.3600
GBP/USD gives away its daily gains and recedes toward the low-1.3600s on Thursday. Indeed, Cable now struggles to regain some upside traction on the back of the sudden bout of buying interest in the Greenback. In the meantime, investors continue to assess a string of underwhelming UK data releases released earlier in the day.
USD/JPY consolidates around 153.00 favoured by lower Fed easing bets
USD/JPY steadies around 153.00 after hitting two-week lows at 152.25. A strong US Nonfarm Payrolls report provided some support for the US Dollar on Wednesday. The Yen remains on track for a 2.6% weekly rally, boosted by Takaichi's victory at Sunday's elections.
Editors’ Picks
AUD/USD: Some profit-taking should not be ruled out
AUD/USD has quickly faded Wednesday’s strong advance despite climbing to new multi-year highs around 0.7150 earlier on Thursday. The pair’s decline comes amid a marginal uptick in the US Dollar, while investors gear up for US CPI data and relevant Chinese releases on Friday.
EUR/USD faces next resistance near 1.1930
EUR/USD has surrendered its earlier intraday advance on Thursday and is now hovering uncomfortably around the 1.1860 region amid modest gains in the US Dolla. Moving forward, markets are exoected to closely follow Friday’s release of US CPI data.
Gold plunges on sudden US Dollar demand
Gold drops markedly on Thursday, challenging the $4,900 mark per troy ounce following a firm bounce in the US Dollar and amid a steep sell-off on Wall Street, with losses led by the tech and housing sectors.
Ripple collaborates with Aviva Investors to tokenize funds as XRP interest declines
Ripple (XRP) exhibits subtle recovery signs, trading slightly above $1.40 at the time of writing on Thursday, as crypto prices broadly edge higher. Despite the metered uptick, risk-off sentiment remains a concern across the crypto market, as retail and institutional interest dwindle.
A tale of two labour markets: Headline strength masks underlying weakness
Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.
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