The Forex Stalker

Posted by admin 06/02/2014 Comments are off 576 views

The problem that most new forex traders encounter is that they react to the market, as a new trader you will be quite excited by the prospect of forex trading and the riches that you will earn. Watching the price move fast on a 5 minute time frame is a sure way to start losing money hand over fist, forex trading is very much a psychological thing and it is so easy to react to what appears to be large movements on the 5 minute chart, but they are mostly just random intraday movements in a very tiny range when compared to a few days or weeks.

Forex Price Level Stalking.

To succeed in forex you need to prepare so that you don’t react to price movements, and that means looking at the longer timeframes and identifying current support and resistance areas where the price might hold. This is a much better approach than looking at the chart and waiting for something to appear and you don’t know exactly what and you’re never perfectly sure, meaning you never execute a decent trade correctly. If you prepare your support and resistance analysis on a Sunday when the market isn’t moving at all this is even better, there are no distractions to what you are doing, and you are far away from any trading emotions you may have had on the Friday at the end of the week. Once you’ve identified these levels you can now stalk them, that means only focusing on those levels, it doesn’t matter what the market does in between, you are only interested in the levels that you have previously defined.

Executing Your Forex Trade.

The benefit of preparing before the market starts to move is that you can execute the trade better, if you know what to expect then when it turns up you know exactly what and how to do it. New traders will often find themselves indecisive, they will think ‘oh I need to get in here, no I don’t, oh I’m just not sure’ and the main reason for that is lack of preparation, just like anything else in life, preparation is key.  Planning ahead will give you more success, if you’re starting on a long journey you’ve never been on before you wouldn’t just jump in the car and go, you’d look at a map first so you can plan the journey. It is just the same with forex, you need to plan for your trade and this doesn’t mean planning what you’ll do with the trade once you’ve placed it, you need to anticipate the market and plan for what you anticipate if and when it turns up. Every single forex trade you take should have a plan within the  framework of your trading strategy.

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