How to learn more about the market

Much of the information you need to make sensible trading solutions is available on your chart, but it’s not obvious, so asking questions on the market should help you read his intentions, says the currency trader Mark Principle from the SMB University Forex Training Program.

One of the most useful marketing habits I’ve learned over the years is how to ask the market. Asking the market means constantly asking yourself what the market should do, based on technical information available at the moment and then considering your answer in the light of a more global view. This questioning will not be useful if you do not have the prospect first and you have not decided what kind of strategy you intend to take (scalping, daily trading or swing trading, in terms of your point of view). Asking the right questions to the market will allow you to be a better “listener” rather than a representative of your own ideas that the market really does not really care about.

So what are the right questions? “What is the trend?”, “What is my support and resistance?”, “What does my oscillator say?”. These are very broad questions and will not provide any useful information in my opinion.

When I begin my questioning process, I always start from a more specific technical point of view. For example, when I look at the EUR/USD pair, it seems as if a large part of the bearish momentum has occurred in recent weeks. This is evident from the lower peaks and lower bottoms of the longer periods of time. These are my first questions in the market: Is my four-hour chart, or larger, closing at the bottom? If so, how does this bottom relate to the previous bottoms? Is it significantly lower? Or is it a little lower? (As within 100 pips). Does the price demonstrate immediate recovery from bottom versus timeframe? Where are we in terms of psychological support? Are we close to any integers or other shapes?
These questions will not get immediate trade. They will help me to prepare for a twist if one is in the process of development, or they will protect me from too early a line if the downward impulse is sustainable. Maybe you’re wondering, “Why are you just not in a short position if the market continues to deliver bearish conclusions?” It’s not that simple. If I have enough information to make a good short argument, I will have to confirm this with setup and volume analysis. Turning back to the EUR / USD example, as it makes a bottom near an integer (1,1500) and happens to turn around the psychological support zone, I have to protect myself by lowering my expectations and looking for scalp or daily trading opportunities if they can be validated. Why? At levels like these, bullish tricks from nowhere are more likely. Why get caught in one of them?

As a trader, we need to understand that much of the information you need to make prudent trading solutions is available right on your chart, but it’s not clear. Market interrogation is a creative process and far from scientific. The goal is to open your mind about opportunities and let the market dictate its intentions. This will not give you the best prices but will help you distinguish the dominant impulse in the current action of the price and better prepare yourself for participating in emerging opportunities.

 Trader Aleksandar Kumanov

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