Forexmentor.com Forex Trading Price ActionThere was a nice move up in the EURUSD from yesterday until today. Just as a reminder, I do not use the pivots for Sunday trading because I have not found a reliable CONSISTENT way to calculating them to help produce high probability trades. If, you have found a way that seems to be successful, please send it in. However, it is nice to see just plain old support and resistance play out very nicely. Please keep major support and resistance in mind for the week ahead. I have also found the following article very insightful; please take a few moments to read it.
Details Matter
Sometimes a small, seemingly insignificant detail can make a huge difference. Details do matter, but many traders minimize this fact of trading. For instance, it is essential to outline a detailed trading plan and to follow it, but many traders, especially novices, believe they can leave the plan open, and fill in the blanks later. And that would be all right, if they could afford to live with the consequences.
Many people, however, cannot afford the losses that result from ignoring the details of a trading plan.There are many ways to mess up a trade. If you misjudge volatility, for example, and buy too many shares based on an inaccurate estimate of the possible fluctuation in price, you may end up risking, and losing, more than you had planned. Some traders do simple, preventable things to screw up a good trade like forgetting to put in a stop loss order, or going on an errand or vacation without taking precautions to close a trade should the market move against them. When they return and monitor the trade, they wonder how they could have been so negligent. It didn't seem like such a big deal at the time, but in retrospect, failing to pay attention to seemingly minor details and then trying to undo the problems, is tantamount to doing nothing to prevent the fall of Humpty Dumpty and hoping to put him back together again with ease. It can take more time and energy to fix a problem than preventing it from happening in the first place. This is especially true of trading, where you have to make many more trades to make up for a loss than it took to lose the money in the first place. Rather than take a haphazard, lipshod approach to trading, it is vital to pay attention to details.
How can you increase your ability to pay attention to details? First, reduce the amount of trades you are trying to make. When you try to make too many trades, you feel pressured to get more done. And when you feel the pressure, it's hard to pay attention to details. By reducing the number, you can pay more attention to the trades you do put on. Don't substitute quantity for quality. It is better to make fewer trades that are well thought out instead of many trades that are poorly conceived and are likely to lose money. Second, do whatever you can to make sure you are calm while trading. When you are tired or pressured, it is difficult to concentrate and pay attention to minor details. You will not have enough mental energy to devote to addressing essential details of a trading plan. Your ability to pay attention is a limited psychological resource. Coping with stress saps up limited resources, so the more you can remove background stress from your life, the more likely you will have the required psychological energy to earmark for paying attention to details. Third, you can create a checklist of procedures to follow to ensure you attend to essential details. Some traders actually devise worksheets that require them to outline all parameters of a trade before it is executed.
Such a form would have blanks for target entry price, stop loss rules, and exit price. Additional details of the trading plan can also be noted, such as market conditions that must be present before a trade is executed. The goal is to add structure and organization onto chaos. If you have to write it down, you will be likely to address it. Rather than try to remember what you should do, you will force yourself to actually go through each step before you execute. It may seem pedestrian, but going through the process of completing each step in a checklist can increase your ability to pay attention to details.
Trading is challenging. It's easier to lose than to win. In order to survive, you must do everything possible to increase your chances of success. One of the most important steps you can take is to get organized, plan carefully, and pay attention to vital details of your trading plan. The more you pay attention to details, the more likely you will followyour plan and take home profits.---- Innerworth
See today's chart at:
http://www.forexmentor.com/campaign/sep1106.htmlSee latest sample AM Review at:
http://www.forexmentor.com/sampler/Good Hunting in the week ahead.
Seth Gregory
(for Peter Bain)
