Many forex traders do not make proper preparations and are properly prepared before entering the market or entering each trading position.
If you are a forex trader, take a look at these shared steps and check if you meet every important step before entering the market.
# 1 Emotions are stable
The most important thing before entering the market is that you need to keep your emotions in a stable state to help you make the right trading decisions.
Need to be in a calm state so that you are able to control psychology at the best level. Many traders lose in trading due to failure to control their emotions especially when experiencing losses and determined to take revenge.
# 2 Choose the right pair to trade
The choice of pair or currency pair to trade depends on several criteria and may be different for each trader.
For example, a trader chooses a pair to trade on the sentiment factor by understanding the situation of each currency based on the economy of the currency country.
There are also those who choose based on the low spread pair of the currency or the average price movement of a pair to suit the capital and so on.
# 3 Identify market trends and strategies used
Traders need to know whether the market is in an uptrend, downtrend or sideways. This is important for the use of different trading strategies for each type of market trend.
It is also necessary to identify whether the market at that time has high or low liquidity as this will affect the distance of a price movement at a time.
# 4 Check your trading plan
The next step is that you need to first check your trading plan to see if it meets all the required criteria.
Criteria in the trading plan can be confirmed from some indicators of your choice or candlestick pattern in technical analysis.
If there are criteria that are not met, it is likely that the position of the entry is of poor quality or risky entry which you need to avoid.
5 # Check the larger timeframe for certainty
If your entry is on the H1 timeframe, you need to first see if the H4 timeframe is parallel to the two timeframes before the entry.
If H1 shows the entry for the BUY position, but in H4 also shows the entry for SELL position, it is likely to be risky or shows poor quality trade.
# 6 Determine whether it is an entry market order or a pending order
When you open a chart and decide on an entry, you need to first research where the price is and use the appropriate entry based on your analysis.
Use a pending order if the price has not yet reached the proper entry area. Be patient and follow your trading plan.
# 7 Set TP and SL and calculate lot size
The last step before entry is you need to determine which level of profit you want to take and how much loss you are willing to bear for each entry.
It is also important that you first calculate the appropriate lot size based on the risk calculation formula for each entry.
Once all the above steps have been met, you are ready to enter the market.
