Becoming a Better Trader: Q&A Session
Find out ways to become a better trader in our new guide, Building Confidence in Trading.
In this webinar, we discussed a host of topics in an effort to help traders improve their performance.
One trader asked, “If trend-lines are subjective and moving averages are objective, then wouldn’t the latter make more sense to use for identifying the trend?” Moving averages are a common tool used among traders for both trend and support/resistance, but for a price action trader such as myself the way in which I identify trends is through higher highs and higher lows for uptrends and lower highs and lower lows for downtrends. Using trend-lines, while subjective, if properly utilized are a good way to find support and resistance. Moving averages can be used as such, too. It really boils down to the traders preferred approach, as there are many ways to identify attributes to a charts such as trend and support and resistance levels.
Another trader said, “I have been profitable for several days and then I find myself taking trades I shouldn’t, which has now led to losing the earlier gained profits.” This is a very common issue – straying away from one’s game-plan. In this case, it is likely overconfidence from the winning period led to sloppy behavior. It’s a good idea to use a checklist (it can be physical – i.e. a spreadsheet, or mental once more experienced) to keep you focused on making the ‘right’ trades which fit within your trading plan. The more experienced you become the faster you will recognize you are deviating away from your trading plan. It comes down to building strong self-awareness, and quickly putting yourself back on course when you see yourself going astray.
For the full conversation, please see the video above.
Join Paul or any of the other DailyFX analystslive each week, for details please see the Webinar Calendar.
---Written by Paul Robinson, Market Analyst
You can receive Paul’s analysis directly via email by signing up here.
You can follow Paul on Twitter at @PaulRobinonFX.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.