Being Chart Ready “All the Time”

   Forget the news, remember the chart. The chart already knows the news is coming. You can/should never predict the market moves because you can never be too sure as to how the news would affect the price movement. 


    I absolutely stick to the above words of wisdom, however if I have to modify it a little, “Don’t entirely forget the news (at least you should know at what time the scheduled data is coming out, so that you can adjust or close your open trades, to avoid possible spikes), but you’ve to only trade your chart”. The latter part of the paragraph is damn right though. You just don’t know when the news is priced in, and when its not and you can mostly not predict which way the news is going to affect price (unless it’s a Central Bank Intervention, or a significant deviation from the expected to the actual interest rate announcement)

   If you see hundreds of charts, posted on this blog in the past few months, or thousands of them posted on the twitter for the past 4 years, you would have noticed that I don’t use much indicators.  I have never been an indicator enthusiast because they are merely derivatives of price. My approach has been, “Why on earth should I study derivatives of price when I must trade price itself?” If you have a different opinion to me and have been time and again doing well over the years, well then your achievements speak for themselves. In the business of currency trading (or for that matter, trading any market), everybody must discover their own niche that works for them.

   I sometimes observe traders (when I go in general trading chat rooms) doing all sorts of fundamental calculation which baffles me to the max, as to how they can use that information to decide on a buy/sell decision and their stop losses. May be there is a way, and I am certainly not a hater of fundamental trading, but I think retail traders like you and me have to rely on your charts more than anything else, and the charts need to be prepared “all the time”. 

   Traders don't realise the importance of preparation and planning. Your routine at the start of the trading day should be to stay unruffled, attentive and chart ready for action which is the ultimate goal towards being prepared. Plot your fibs, mark the previous day’s highs and lows, and don’t just stay obsessed with Eur/Usd.

   Technical analysis is a skill that improves with experience and study. Always be a student and keep learning. - John Murphy

   If you have the willingness to be a good trader and make a living out of it, leave all those bad habits like trying to decide a trade on news, stop trying insane correlations that don’t even exist (and you think it’s a correlation), and just live your life on charts and can I say it once more? Stop being impulsive and trade only when there is a technical opportunity. You will be amazed how your decision making gets better with time.

“Charts know everything” (well almost) :)