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#10

Horses for courses, we say in England, i.e whatever your strategy, make sure your indicators are relevant

If you are using a trend trading strategy, your main indicators will differ from those a range trading plan

Ensure you know how to assess the potential end-point of a trend before it reverses on you

Make sure any range plan is ready for the swing back

Know just how little time markets spend in pure trend mode

Study the ATR on the Daily chart (for periods 2, 20 & 250) of your chosen pair/s

Is it really moving worth the bother - look how low the ATR is compared to... Q3 2008...

Low ATR makes for very unpredictable market action on low volumes

#1
JUST BECAUSE YOU ARE READY TO TRADE DOES NOT MEAN THE MARKET IS READY TO JOIN YOU!!

#2
If a big move has already happened in a trading session, how are you going to justify another big move?
If you are LATE on a move... YOU MISSED IT. Too early is wrong too, just not usually quite so wrong as too late!

Prices almost never stop exactly at support/resistance or a 'large round number'
Big traders & market movers will try to flush out short stops with one more push on a rally (& vice versa)

Many small lots are ALWAYS better than one BIG one, enabling you to fade in & then out of a position

#5
Study long-term charts. Begin a chart analysis with monthly and weekly charts spanning several years.
A larger scale map of the market provides more visibility and a better long-term perspective on a market.
Once the long-term has been established, then consult daily and intra-day charts.
A short-term market view alone can often be deceptive.
Even if you only trade the very short term, you will do better if you're trading in the same direction as the intermediate and longer term trends.

Time-of-Day relative to Pair matters - the indicator setup can look great but there may be no one home to move the market AT ALL
Most pairs have their own main session/s for activity - study them and get to know them
Do not day-trade during Easter & Christmas week without constant care - the activity on low volumes is random range trading, lot swapping of carry-trades may be possible
The morning of the US Non-Farm Payrolls (1st Friday of the month 13:30 GMT) is tricky for day trades, stops &/or covers should be reviewed for carry trades

Whether you are swing trading or scalping..
Know the daily Pivot, Support & Resistance levels of the pair you are trading
These commonly are bounce or retrace points even if a move ultimately transits through them
They also often limit moves towards the end of a pairs trading session

#9

Correlation - the tendency of certain pairs to move in step - much quoted as part of many strategies
The classic 'pairing' is EURUSD having negative correlation with USDCHF (i.e. goes the opposite way)
However, since Feb 07, many of the previously high-correlating pairs have broken the relationship for significant periods
With supreme 20/20 hindsight, I now see that this breakdown of correlation was the first sign of the Forex storm that broke in 2008
I would be reluctant to use correlation on any strategy other than position (long term) trading or hedged swing trading

News Events on these subjects	Shape Perception	Which Leads to Action by
Bank Rate Changes		Government/Central Banks pre & post Rate Changes
Commercial News		Central Bank Support/Manipulation
Political News		Merchant Banks/Hedge Funds changing position
Risk Appetite		Retail & instiutional traders changing position
Mergers & Acquisitions		Merchant Banks/Hedge Funds changing position
Share Indexes Move		Risk sensitive (i.e. carry trade) FX holders
Commodities Move (Gold, Oil, etc)		Many FX holders


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