Foreign exchange merchants at all times harp about sustaining self-discipline and at all times following the buying and selling plan.
However whereas having self-discipline is an important trait for a dealer, we additionally need to be cautious that if we’re too caught in our methods, we’ll find yourself imposing our concepts on what the market ought to do as a substitute of reacting to what’s really taking place.
All you actually gotta do is query the market. Actually, it’s that straightforward.
Why you ask? Properly, asking questions allows you to take a look at completely different views of the market that you just initially might not be conscious of.
When questioning your market assumptions, assume outdoors the field and don’t simply keep on with easy and random questions like “What pair ought to I commerce in the present day?”
By questioning, I imply that you must ask what the market “ought to” do in mild of all the data – fundamentals, technicals, and sentiment – out there at that second.
For instance, you may ask a query like, “How will greenback merchants act in the present day given the dovish Fed assertion we noticed yesterday?”
If you happen to’re a technical dealer, you can even query the market by its current worth motion.
As an illustration, we see that USD/JPY has been buying and selling greater for the previous few days as evidenced by its greater lows on the hourly timeframe.
You may ask your self, “Is that this uptrend nonetheless obvious in greater timeframes? Has it made a brand new excessive? Will it encounter any potential resistance stage quickly?”
If you happen to see that USD/JPY is nearing a significant psychological deal with however nonetheless bouncing off assist at one other space of curiosity, chances are you’ll decide to search for alternatives to scalp intraday tendencies slightly than swing trades. Heck, this might point out that the pair might quickly consolidate. Do you actually wish to get caught in that?
This apply will make you consider different potential situations which will emerge and allow you to change into a greater “listener” of the markets, slightly an “imposer” of your personal ideas and views that in actuality, might not imply zilch to the market.
I consider that a lot of the data we have to catch these good trades are already out there to us. It’s simply that our biases typically make them unclear.
Studying to always query the market shouldn’t be precisely scientific, however it may possibly undoubtedly assist make us change into extra open to the market’s potentialities.