Trader's checklist. Part 1
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  1. #1
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    Trader's checklist. Part 1

    Hi, traders.

    In this thread I’ve decided to make a small check-list, that I use in my own trading, and that may be useful for you as well. In other words, what do we do step by step when we come to the market with the intention to find a good trade?
    We go top-down, from analysis of bigger timeframes to lower timeframes and finally, tick-by-tick action. Of course, our thinking in calm environment, when we do our homework, is different from thinking when we are acting at the «heat of the moment». But prepared trader has more odds of making good decision rather than unprepared one. The only group of traders that can make absolutely no preparation, are pure scalpers. But now there really a few pure successful scalpers in the world – this trading style has become very tough with the popularity of mechanical trading, HFT algorithms.

    1. Important extremes.

    Check whether market has violated recently any important extreme – 1 month, 2 moths, 6-months or more. It can be an indication of something significant happening in the market. Short-term traders often avoid trading near such zones, and they of course are not responsible for driving the price against important extremes. They prefer to wait for confirmation and only act after that.
    I’m saying that if any trading setup has occurred after price had violated any important extreme, this setup can be more valuable and lead to more significant changes in price.

    Example – recent activity on NZDUSD. Breakout to the downside has occurred after violation of 1, 2 and 3 months highs.

    nzd_violation.png

    2. COT reports.

    Has there been something significant on COT reports so far? See more here

    3. New announcements and holidays.

    Does market expect any news announcements today, what will be the time of news releases? You don’t have to analyze numbers in most cases, but it’s recommended to at least know when news will be released.

    4. Wave-like activity

    By wave-like activity I assume breakouts initiated in a wave-like style. So, if you have breakout and it is performed in the form of double, or, which is better, triple initiative, it can be a sign of a «new business» entering the market. In most cases, such movements are to be continued in a short-term period.

    nzd_newbusiness.png

    5. Volatility – low or high?

    Has volatility been low or high recently? In markets that are ready to break out, volatility tends to be small. Market prepares for the move, sort of accumulates power, and after that goes in pretty rapid way.

    To be continued…

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  2. #2
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    This is a great thing forex traders should know, I am sure that trading in the market is more than what many traders are doing mainly. I am sure that when you want to be a successful forex trader, you will need so much to learn and know, you need volatility, the liquidity etc., this will help your trading better.

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    I think and i say this from my heart that making a checklist is probably the best thing you have ever done as it not only allows you to have a set pattern to follow but it also systematically arranges task so that you are never lost in your path. By the way you have done your work you really seem to know what you are doing.

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    New traders should choose only 1 currency pair to start trading. Although it is advised to trade in EURUSD but I suggest start with your currency pair of country against USD.
    If that is not available then for EURUSD.
    and start knowing the historical price of last week, month and year.
    That would definitely help to decide the valuation. And do not forget to read news and upcoming news before you create any entry position.
    These things can make you easy to start trading.

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    Quote Originally Posted by Value trader View Post
    Has volatility been low or high recently? In markets that are ready to break out, volatility tends to be small. Market prepares for the move, sort of accumulates power, and after that goes in pretty rapid way.
    Yeah if market have low daily volatility, it means they are preparing the strength for big volatility. Usually they will break the support or resistance with big volatility in the next day. My strategy in this type of market is to use pending order because at least they will move for 100 pips or more. I call it as a jackpot.

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    trader check list is just like an trading journal but in check list trader check all the necessary requirements need in the trade before trading so that he can earn profit from his trade and trade strategy is a tool which is been used by all trader specially by the beginners.

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    According to my check list there are many things from which some are indicators , candle sticks with 3 hour time frame, draw down calculated and trailing stop to be induced with my trade and if all these work together they Either I may get profit or not but my trade and capital is safe and risk percentage remains little and that makes me feel less pressurized while trading and executing for the proper entry.

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    Quote Originally Posted by FOREXFOREX View Post
    According to my check list there are many things from which some are indicators , candle sticks with 3 hour time frame, draw down calculated and trailing stop to be induced with my trade and if all these work together they Either I may get profit or not but my trade and capital is safe and risk percentage remains little and that makes me feel less pressurized while trading and executing for the proper entry.
    I use indicators which give me accurate information about volatility in the market from which i make my buy or sell position . I mostly use RSI because it tells us accurately and honestly i have used it many times and it has never been wrong so far except for a few times and that also was my mistake because i did not analyse chart patterns correctly.

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    Trader's checklist is very important for a trader. But it is matter of sorrow that, most of the trader do not use it. So they fail in loss and unable to make money from forex. It is also better system to make money with forex and then we can make good number of money. So we have to make a good checklist and be success with our trading plan.

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  10. #10
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    A strategy or trade can be good but not perfect. We cannot at amy time be 100% sure that the market will move according to our analysis. We may read charts and use analysis which will certainly increase our chances of making good trades. But we should always follow a good money and risk management system which will complement our trading strategy and style.

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