3 Essential Components of Your Daily Forex Routine

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Forex traders often get into the same habits day-by-day, and this is definitely a good thing, as long as you’re doing the right things. Having a routine helps to ensure that everything that needs to be done is done, and the rest of the day is set up better.

There are all kinds of things that you might incorporate into your daily procedure and strategy, depending on what your methods are, but these three points are some of the most important. They are useful no matter what your strategy entails, and will help give you a good base for the day ahead.

  1. Check your open positions, and review the overnight price action – Everyone knows just how volatile the markets can be, and you never know what might have happened with your positions while you were asleep. Checking open trades should be second nature. You may well find that some have been closed through stop orders, and now is a good time to assess how successful the trades were. In addition to looking at what happened to your trades, you should review the price action while you were away. This can often reveal patterns which you can adhere to. It may also influence your trading mentality for the rest of the day; you may have to account for more or less volatility, and adjust stop loss orders.
  2. Observe long-term trends – If you use a variety of tools to check what the forecasted price action looks like, then you can begin to think about levels of support and resistance. They may well have changed overnight, and you should reassess them on current information. It’s often a good idea to look at trends which are longer-term than whatever you’re looking at. As an example, if you’re using a 4-hour chart, then it’s often wise to see what the 20 hour chart is like; this will give you a better overview.
  3. Check and plan for economic announcements – News is the single biggest influence on the markets. A single story can have immediate impact, and can potentially change the fortunes of a position in an instant. For this reason it’s essential that you are prepared for any potential announcements. There are clearly a great many news items that cannot be predicted, but scheduled releases can be accounted for. As a general rule, it’s unwise to even have any open positions when you know an announcement is due to be made. You never know what it might have in store. An economic calendar is essential for these reasons, and usually there’ll be one included with your forex account. Of course, announcements aren’t bad; they can present entirely new opportunities too.

Add these three elements to your daily routine, and you’ll be better placed to make your trades that day. Remember to always treat a new day as a new opportunity; make sure that overnight action or an economic announcement doesn’t catch you out.

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