Forex Trading: 5 Daily Tasks for Consistent Profits

One of the mistakes traders make, whether they are beginners or experts, is getting lost in complicated activities. It may seem strange or even counter-intuitive (being online trading and Forex Trading in particular the territory of pure technique), but complexity, in this context, does not pay off. Simplicity is the way to go. So, what can be done to update one's approach and bring linearity to one's Forex Trading journey? It is preparatory, certainly not sufficient, to give the right weight to what is truly necessary. Start everything, even complicated activities, which remain present even in a simplified context, from some daily "good habits". Habits that, so to speak, set the table, allow trades to be framed in the right context and, in simple terms, optimize trading work. Here's what they are.

Identify Highs and Lows

Why is it necessary to identify highs and lows? The answer is really simple, and even the most experienced trader knows it: because they represent the basic elements of technical analysis. That's right, "basic" elements. Some traders, however, associate the concept of basic with the concept of trivial, so they move directly to serious things, starting from a technical analysis that boasts the use of complex indicators. This is a mistake. Of course, indicators should be used, but everything must start from the highs and lows. The reason is evident: no matter how effective an indicator may be, if its signal contradicts the evidence resulting from the highs and lows, then that signal has a high probability of being wrong. This is because highs and lows are, in themselves and practically automatically, pivot points. They draw, in fact, the resistance and support levels, which are fundamental for understanding the nature and stability of a trend, for positioning stop losses, limit orders, and take profits. So, identify the highs and lows.... But which ones? Daily and weekly highs and lows are generally fine. For those who use a minimal approach to technical analysis and give more importance to fundamental analysis, this might even be enough. No particular indicators (except to verify volumes, of which highs and lows have no knowledge), no complex or strange techniques.

Use All Time Frames

This action has to do with a fundamental principle in Forex Trading, but one that could work in every area of life. To achieve one's goals, it is necessary to follow a path, which very often is isolated, lost among many other paths. Yet, to complete the journey, it is necessary to be aware of what is around the path, even those areas that, most likely, will never be traveled. In simple terms, it is necessary to have an overall vision. This is particularly true in Forex Trading, since a strong trend can appear weak (and vice versa) even just by widening the field of view or modifying the criteria through which the chart is formed. Well, one of these criteria is precisely the Time Frame. It is possible, in fact not at all infrequent, that the trader on the basis of what he sees at that precise moment interprets the market in a certain way, only to discover later that the interpretation was wrong, or was just one of many possible, simply by changing the Time Frame. Now, everyone has their preferred Time Frame. And it could not be otherwise, since depending on the strategy it is better to use one Time Frame rather than another. But before starting to trade, and taking the collected signals as good, it is a good idea to take a nice bird's eye view or, conversely, a crawl. In simple terms, it is a good idea to take a look at the chart using different Time Frames. If the interpretations contradict each other, then something is wrong.

Check the Economic Calendar

This can be a very controversial piece of advice. The controversy arises from the epic clash between technical analysis and fundamental analysis. Or, at least, between the "fans" of technical analysis and those of fundamental analysis. Some dogmas of the former, in fact, seem to deny the usefulness of the latter. One above all: prices discount everything. This statement opens the door to many corollaries, one of which - in the most extremist interpretation - suggests that, basically, fundamental analysis is not needed. All the information the trader needs is in the chart. Technical analysis, therefore, is self-sufficient. Now, this is not true at all, or at least not one hundred percent true. One can argue about how important fundamental analysis is, but not whether it is important or not. And the first action that those who perform fundamental analysis must take is precisely to check the economic calendar. The economic calendar lists events that can potentially move the market. It is extremely important to know the importance of each individual event. The heaviest ones, in fact, take the name of "market movers" precisely because they act decisively on prices, and they do so almost immediately. Volatility is a normal phenomenon when a market mover is activated. Now, the advice is to check the calendar, verify the occurrence of market movers and sense the market's reactions to them. And, of course, take cover.

Clear Your Mind

This is an important aspect that many, too many, tend to overlook. Online trading is an activity that requires considerable intellectual resources, which demands lucidity and concentration, which repudiates emotions, if they are a little more intense than allowed. Planning, action: these are the obligatory steps for each individual trader. It so happens, however, that emotions themselves get in the way of the trader and effective planning work. Above all, they get in the way of the trader and a clean, linear implementation of the plan, without surprises. Now, how do you put emotions aside? There are those who never succeed, and pay the consequences every day. In some cases, it's character and there's nothing you can do about it. For everyone else, for those who are endowed with even a minimal dose of cold blood, the following advice applies: before you start trading, relax. Clear your mind, create a calm and peaceful environment around you that fosters the sensation as much as possible. Only when you think that your attention can be placed in trading and only in trading, start working.

Understand if it's Your Day

It may seem like stupid advice, but it's not at all. It also has to do with the limits of each trader. The previous advice also had to do with limits. But while that was about emotional limits, this has to do with skill limits. There are experienced and less experienced traders, but all traders - if we exclude a few gurus - have a weak point, have experienced one or more situations in which they have not been able to get their bearings. Some situations, let's be clear, are difficult and impossible for everyone to deal with. But the fact remains: everyone has their bogeyman. Therefore, know your limits and don't bite off more than you can chew. This advice should be put into practice especially when the day looks bad, maybe not in general, but rather by your standards, by your abilities. Generally, if we consider the average retail trader, a day when it is better to avoid trading is when a hectic economic calendar is combined with a rather hectic political day at the international level. In these cases, it is necessary to work mainly on fundamental analysis, which is not for everyone.... On the contrary.