What do you think? - DailyFX Forex Forum

Thomas Long · #1 (**permalink**) 10-22-2009, 10:35 AM

Here is an interesting chart. The first thing you should notice is that there are no prices, dates or any kind of description of what this market presents. That is intentional as this exercise is meant for you to find out more about how you look at markets.

The simple question here is where you think this market is heading...up or down. There is no right or wrong answer today as nobody can predict the future. But these are the kind decisions that are made by traders when identifying potential trading opportunities. The idea is for you to look at a market without any bias or opinion and to note your thoughts. This is about what you think, not what you think others will think. Write down a couple of points about the trend, support and resistance, and any potential trading opportunities you see that might set up. Then when you find out what this market is, see if that information changes your mind about your initial thoughts. If you do change your mind, then you should ask yourself if you trust this new opinion more than what you see. But of course, the real question is, do you trade based on your observation of what the market is doing or based on what you think the market should be doing? That is a big difference and is a question that has to be answered by each of us before moving up to the next level of trading. Only you know the answers to these questions and only you know what your trading results are from month to month. So only you know whether you need to change the way you approach the markets or to just improve your current approach. Be honest with yourself...be critical of your thought process...and develop a consistent
approach to trading as that is what leads to consistent results.

By the way...you can find out more about this chart at this link:

Chart of the Day

iceoverflow · #2 (**permalink**) 10-24-2009, 07:07 PM

I looked at the chart and it looks like it is headed back to the high. I was going to say that I would look at a lower timeframes to find a good long entry. Then I followed your link and saw that it was a monthly chart of the EUR/USD. The sharp fall was the recession, so the volatility makes sense. Now, risk appetite has returned to the market so the steady uptrend makes sense. I like this exercise. Looking at a chart without knowing what pair it is takes out a lot of bias.

Thomas Long · #3 (**permalink**) 10-26-2009, 07:47 AM

Quote:

Originally Posted by iceoverflow

I looked at the chart and it looks like it is headed back to the high. I was going to say that I would look at a lower timeframes to find a good long entry. Then I followed your link and saw that it was a monthly chart of the EUR/USD. The sharp fall was the recession, so the volatility makes sense. Now, risk appetite has returned to the market so the steady uptrend makes sense. I like this exercise. Looking at a chart without knowing what pair it is takes out a lot of bias.

Sometimes we do let our emotions get in the way of a good trading opportunity, which is not a good thing. Thanks for posting and glad you found some value.

iceoverflow · #4 (**permalink**) 10-26-2009, 08:48 AM

Quote:

Originally Posted by Thomas Long

Sometimes we do let our emotions get in the way of a good trading opportunity, which is not a good thing. Thanks for posting and glad you found some value.

It is a valuable lesson, and lets one see the value that they place on their emotions while trading. This would be a great exercise for beginning traders. It helped me and I have been trading for a long time. Different perspectives are always great, thanks.

Thomas Long · #5 (**permalink**) 10-26-2009, 09:07 AM

Quote:

Originally Posted by iceoverflow

It is a valuable lesson, and lets one see the value that they place on their emotions while trading. This would be a great exercise for beginning traders. It helped me and I have been trading for a long time. Different perspectives are always great, thanks.

Thank you...I appreciate your comments.