As I was planning to trade the markets today, I used my traditional pre-trading routine. I follow definitely the same routine on a regular basis and it makes it possible for me to become more prepared and effective as a trader and as a businessman.
As part of my Forex strategy trading strategies I would like to share with you a checklist that every FX trader should use in order to be more productive, more organized, and maximize your return on investment.
Check your open trades and track their efficiency: This should be the first step you take once you get to your computer. Check all of your open positions and track their performance.
In quite a few occasions stop losses need to be moved to break even or you want to take profit early because of an incoming event (such as non- farm payroll). One of my mentors once told me that "everything that matters should be assessed", this undoubtedly applies to spot trading.
Research the market before you place any new trades: I cannot accentuate enough that you need to analyze the market before you open any trades. When you are in a trade you are not the same. You are thinking about the trade all the time and you are more likely to make non-sense decisions.
At the same time, you will be hitting your head if you see a problem in the market that creates a conflict with a trade you already took.
Read the news or read a news calendar: I am most of a technical Fx trader than a fundamental currency trader; nevertheless, I still try to stay up to date in what is going on globally.
One of the tools that I employ to analyze the fundamentals of the FX Market is the news calendar. A news calendar provides you with a collection of all the important events that are happening in the international economy. A lot of them also tell you the expected influence that each specific news event will have on the Forex market.
Check your risk, stop loss, and tale profit variables: minor things can make a large difference in Forex trading and little mistakes can result on large losses. This is the reason why I always check my risk, take profit levels, and stop loss levels. That's the best way for me to guarantee that that everything is working fine and that I am going to meet my trading desires.
Never let a small mistake become a large loss: I made a choice to include this one as part of the Forex trading checklist because I have seen several traders lose money this way. We are all human and we will commit mistakes from time to time.
One of the most common errors traders commit is taking a trade on accident. I have done it and all professional Forex traders have. This is not that big of a mistake unless you let run and become a larger loss. My advice to you is that if you ever take a trade mistakenly close it immediately, never let a small mistake turn into a big and unnecessary loss!