November 27, 2012
3 Things You Should Include In Your Daily Routine As A Forex Trader
If you trade the forex markets every single day, you will soon find yourself getting into some kind of routine. I know I did when I used to trade the markets all day long. Nowadays I make time for other things as well, but I still incorporate the same kind of things into my daily routine.
There are three things in particular that I will always try to do at the start of the day, and they are as follows:
1. Check the overnight price action and monitor any open trades
The good thing about trading the 4 hour charts, and using one of my favourite trading methods, is that you don't need to be screen-watching all day long. You can just set your stop loss and your target exit point and let the trade unwind, leaving it to run overnight if necessary.
For that reason it is always important to check the overnight price action when you first switch on your computer in the morning, and monitor any open positions. The overnight price action can often influence your trading plan for the coming day, and you may want to adjust your stop loss and exit point if necessary.
2. Check the long-term trends
Before you start trading, it is always a good idea to take a look at the long-term trends for the various currency pairs that you like to trade. This should give you an idea of which way you should be looking to trade on the shorter time frames.
For example if you are trading the 4 hour chart, then it is always a good idea to look at the price action on the daily chart, identify the current trend and possibly look at some key support and resistance levels.
3. Check which economic data releases are scheduled for the coming day
It is always vitally important that you are aware of any economic data releases that are scheduled for the forthcoming trading day because these can potentially ruin any of your trades in an instant.
The markets don't care about technical patterns, or even support and resistance levels, when a key piece of economic data is released. They simply react to the news, and subsequently there can be some wild swings as a result. In general you don't usually want to have any positions open around the time of one of the more important data announcements.
You can check the economic calendar, which includes the time (and importance) of each data release at ForexFactory.com.
Once you have done these three things, you are good to go. Just make sure that you take a few breaks during the day, and try to get some exercise because sitting at your desk staring at a computer screen all day long is not good for your health.