Using Your Weekends
Preparing for the coming week is something most traders do Monday morning. Instead of waiting until the last moment, though, you should spend a few hours over the weekend trying to ready yourself for the beginning of the trading week. Just because the major markets are not open at this point doesn’t mean that things are not happening. Announcements are still made, products are sometimes rolled out, news goes on regardless of what day of the week it is. There might not be any new technical data, but as you know, this isn’t the only thing that has an influence on the price of an asset.
The best way to approach the coming week for many traders is to make a list of assets that they want to focus on. These could be things that have been in the news, things that interest them, or just assets they are curious about. At this stage, it doesn’t matter. You have time to prepare, so you should use it. Part of it should be practical, and part can be exploratory as you try to grow as a trader and expand your skills. You are just making a list first.
Next, you need to go through that list and identify trading conditions. So, if you’re looking at the EUR/USD pair, what needs to happen for you to execute a trade on it? Maybe the interest rates are changing and will be rolled out Monday morning. There are tons of little hypotheticals that could be discussed, but the bottom line is this question: what’s changed and how will it affect the coming week? The Forex market is just one example of where this could be applied; stocks, indices, and commodities can all be treated like this.
Depending on how you are trading, the next step is to craft an approach. If you trade stocks, the time to act is usually the moment the opening bell sounds. The first 30 minutes of the day–especially on the first day of the week–is when movement is most likely to happen and where movement is the most predictable. This goes for only traditional stock trading, though. If you trade with binary options, stocks are usually unavailable until those 30 minutes are up for the above reasons. The advantage with binaries, though, is that you can still make a big profit off of slight movement. Take into consideration all of these factors when coming up with a gameplan for Monday morning so that you are not wasting time strategizing while markets are open, but rather just sticking to the plan that you have already perfected. It saves you a lot of time and worry, and makes your trading much more mechanical.
Another example, on the more technical side of things, would be looking the USD/JPY pair. Fibonacci targets can let you know what a good time to initiate a trade is, and by calculating these before the markets open, you can just observe the charts until the perfect moment to act.
This is an important point. Planning like this eliminates a lot of human error. If you’re in the middle of a trading day and you have set guidelines for what you’re doing, you are less likely to stray and make a silly mistake. Yes, your plan might not be perfect, and this is something you will need to pay attention to, but it reduces the chance of making a stupid trade just because it seems right.
Weekends also give you a time to go outside your normal routine. If you’re interested in a particular signals service, for example, you now have time to research it and make a more informed decision than you would if you spent time during your busy week.