“Give me six hours to cut down a tree, and the first four I will spend spinning an axe,” Abraham Lincoln said of preparation and planning.
If you are a trader, you should spend 5 hours 59 minutes instead of four hours preparing.
Because forex trade simply means executing an order. This is a one minute task.
But it is the “decision making” part that precedes the execution of the order that is important because it ascertains the success or failure of your operations.
To make a flawless decision, you need to have all the information you need at your disposal and then process it carefully.
Traders often refer to the information gathering and processing processes as “analytics.” And they spend part of their time just processing.
The focus on processing makes you underestimate the impact of information gathering on your final decision.
For example, you see the market at highs and decide to follow the trend and open a buy forex trade. But the market falls to your stop loss in seconds. After examining the flaw, you discover that the market was overbought and ignored it. A simple drag and drop of the RSI indicator could show you this. Oh! When you yell like that, you will get stung. Nevertheless, it happens.
Most of the time, your failure is due to hasty decisions made with little information, and then you regret it, why does it always happen to me?
If there was other information on the table (overbought), I would make a different decision or postpone this decision. Then information matters.
Here are a few preliminary procedures that provide all the information your table needs.
A look at long-term technical levels.
Long-term levels (trend line, support, and resistance levels) are critical levels.
The trend is your friend until it ends. And these levels can spell the end.
On immediate impact, they give a reversal, if there is any pullback.
The problem is that when you continuously focus on short-term charts, you tend to ignore or ignore them.
You will only learn about these levels when the market is ambushed.
So let’s leave some regret for our real mistakes. Not out of ignorance.
Review the daily and weekly chart before making your final decision. Or set a rule of thumb to analyze long-term charts over the weekend.
Bonus Tip: Long-term chart analysis often suggests short-term and short-term trading for you.
Another look at the daily economic publications, Economic releases and news set the trend for the day.
In most cases, they are the technical trader’s sworn enemy, having the strength and desire to switch the status quo in the short term. You just cut your stop loss and then proceed as usual.
Also, when you are immersed in your lists, you can skip the press release moments.
So write a news diary.
Start the day by visiting the economic calendar.
Also, check this just before entering a trade as part of your trading procedure. Or there is a better way.
Pre-forex trade news feed indicators.
A little tip on how to exchange news
Closing of positions before the press release.
Never bet on an economic press release unless you are an economics expert.
Never start trading based solely on a press release. Also, use technical confirmation.
Track short-term price action
Whether you are a reseller, short-term, or long-term trader, pay attention to little price action.
Also, use short-term support and resistance levels to get a better entry. For the model, if you want to open a long position on a currency pair, do not open a position on short-term resistance.
Always stick to short-term levels. It shows instant winnings on the screen, confirming your confidence in the decision.
Read More : Economic Calendar Explained and How to Use it