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 hovers around 1.0700, eyes on US first-quarter GDP data
EUR/USD hovers around the 1.0700 psychological level on Thursday during the early Asian session. The modest uptick of the major pair is supported by the softer US Dollar. Later in the day, Germany’s GfK Consumer Confidence Survey for April will be released.
GBP/USD snaps the two-day winning streak above 1.2450, eyes on US GDP data
The GBP/USD pair snaps the two-day winning streak near 1.2460 amid the modest rebound of the US Dollar on Thursday during the early Asian session. The release of the US Gross Domestic Product for the first quarter will take center stage on the day.
USD/JPY finds its highest bids since 1990, near 155.50
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, testing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming Japanese intervention risks. Focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Editors’ Picks
AUD/USD hovers around 0.6500 amid light trading, ahead of US GDP
AUD/USD is trading close to 0.6500 in Asian trading on Thursday, lacking a clear directional impetus amid an Anzac Day holiday in Australia. Meanwhile, traders stay cautious due ti risk-aversion and ahead of the key US Q1 GDP release.
USD/JPY finds its highest bids since 1990, near 155.50
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, testing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming Japanese intervention risks. Focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold price lacks firm intraday direction, holds steady above $2,300 ahead of US data
Gold price remains confined in a narrow band for the second straight day on Thursday. Reduced Fed rate cut bets and a positive risk tone cap the upside for the commodity. Traders now await key US macro data before positioning for the near-term trajectory.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price. Coupled with broader market gloom, INJ token’s doomed days may not be over yet.
Meta Platforms Earnings: META sinks 10% on lower Q2 revenue guidance Premium
This must be "opposites" week. While Doppelganger Tesla rode horrible misses on Tuesday to a double-digit rally, Meta Platforms produced impressive beats above Wall Street consensus after the close on Wednesday, only to watch the share price collapse by nearly 10%.
RECOMMENDED LESSONS
Making money in forex is easy if you know how the bankers trade!
Discover how to make money in forex is easy if you know how the bankers trade!
5 Forex News Events You Need To Know
In the fast moving world of currency markets, it is extremely important for new traders to know the list of important forex news...
Top 10 Chart Patterns Every Trader Should Know
Chart patterns are one of the most effective trading tools for a trader. They are pure price-action, and form on the basis of underlying buying and...
7 Ways to Avoid Forex Scams
The forex industry is recently seeing more and more scams. Here are 7 ways to avoid losing your money in such scams: Forex scams are becoming frequent. Michael Greenberg reports on luxurious expenses, including a submarine bought from the money taken from forex traders. Here’s another report of a forex fraud. So, how can we avoid falling in such forex scams?
What Are the 10 Fatal Mistakes Traders Make
Trading is exciting. Trading is hard. Trading is extremely hard. Some say that it takes more than 10,000 hours to master. Others believe that trading is the way to quick riches. They might be both wrong. What is important to know that no matter how experienced you are, mistakes will be part of the trading process.