Forex traders always strive to maintain discipline and always follow a trading plan.
But while discipline is a very important trait for a trader, we must also be careful that if we get too caught up in our ways, we will end up forcing our ideas on what the market should do instead of reacting to what is actually happening.
All you have to do is Interrogate the market. Really, it’s that easy.
Why are you asking? Well, asking questions allows you to look at different perspectives of the market that you may not be aware of at first.
Keep this in mind when asking questions. However, I want you to think outside the box and not stick to simple, random questions like “What pair should i trade today?“
By asking questions, I mean you should be asking what the market “should” do given all the information – fundamentals, techniques, sentiment – available at that moment.
For example, you could ask a question like, “How will dollar traders react today in light of the dovish Fed statement we saw yesterday?“
If you are a technical trader, you can also suspect the market by looking at the recent price action.
For example, we see that US dollar / Japanese yen It has been trading higher for the past few days as evidenced by its higher lows on the hourly time frame.
You can ask yourself,Is this bullish trend still evident on higher timeframes? Have you achieved a new high? Will you encounter any potential resistance soon?“
If you see USD/JPY approaching a major psychological handle but still bouncing off support in another area of interest, you may choose to look for opportunities to scalp intraday trends rather than swing trades. Heck, this could indicate that the pair may consolidate soon. Do you really want to get stuck in it?
This practice will get you thinking about other possible scenarios that may come up and enable you to become a better ‘listener’ to the markets, rather than an ‘impersonator’ of your own ideas and views which may not in fact mean to slip into the market.
I think a lot of the information we need to catch those good deals is already available to us. It’s just that our biases often make it blurred.
Learning to constantly question the market isn’t exactly scientific, but it can certainly help make us more open to the market’s possibilities.