Check, Check, Check ... Three Steps to Becoming a Disciplined Trader
Learning about how to become a successful Forex trader is not complicated if you put certain checks in place that make you disciplined. Do these things and watch how you improve in your trading.
1. What direction is the currency pair you are trading moving? - Most traders think they do this but they seldom have a list of items to check before entering. For example, if you trade during the US time frame you could check some of the following items: Dow Futures or other equity futures, the economic news that will be revealed during the time you are trading, how the markets were trading in Asia and London the night before and what the market is reacting to at the present. Your trade entry will be affected by all of these. Understanding how to read the market based on when you trade is crucial.
2. Where is the overall momentum? - First, I don't mean for you to add an indicator like RSI or MACD to your charts in order to read momentum. Even though RSI, for example, is considered a leading indicator it does not predict momentum in the next moment. Momentum is created when people with the most money act up on the market. As a Forex trader you need to be able to predict where the momentum in the market will be. You can learn to do this by following a few simple things. You don't need to be an economist but after a while, you will probably know more than most economists.
3. What do you use to enter the market? - If momentum is so important does the Forex trader just enter intuitively? The answer to that question is yes and no. Once you are practiced at reading momentum you will know when to enter and you may not need any indicator(s). However there are indicators that can create signals that give a clear and concise entry point once you have taken #1 and #2 above. One is The RSI Paint Indicator which is an RSI that locates divergence and reversal signals.
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