How many times have you looked at the chart, trying to understand: is it worth taking this signal or not? And how many times in such cases did you make a profit? But honestly?

There is actually no need to look for good trades. You just wait and react. Remembering a couple of nuances …

We will talk today about how often it is worth checking a chart in Forex trading, as well as the reasons why our brain sees transactions where there are none (and what to do with it).

No need to look for entrance signals

Good signals are visible immediately. Instantly. Like a crocodile in the photo above. You don‘t need to search for them. Turn on the terminal and immediately see everything. You do not guess, do not draw, do not change the scale of the chart (narrower/wider), and immediately see the entry point.

If you do not see a signal on the chart in the first 1-2 seconds, it is not there.

Generally, if you know at least 4-5 methods of technical analysis, you, if you wish, will find a signal at any time on any chart in any direction.

Example:

EURUSD, just a normal chart, on the “bare” chart, nothing on Price Action catches your eye, lazy consolidation is worth the wait.

OK.

Let’s put the Stochastic on the chart:

What do we see? Stochastic shows us an overbought zone. We must sell!

Next, the brain needs confirmation of our rightness. We draw the trend line and see that there was a false breakdown of the trend line, the price moves down, that’s all - you need to sell it right away! Ahhhh !!!!!

And now let’s find a buy signal on the same chart.

Drawing trend line, there was a rebound! And this bounce is a Pin Bar! The price just rolled back to its half, a great time to enter. Also, the PSAR indicator (green dots that we added to be sure, cause we need to be right, right?) is under the price. No doubt – a total Buy signal.

So, at any time on the chart, if desired, you can find any signals. Impatience, the desire to earn, bitterness after a previous unsuccessful, or euphoria after a successful transaction - all this blurred our vision and we are looking for opportunities where there are none, proving our rightness to ourselves along the way.

The longer you look at the chart, the more deals you see

According to research by scientists, our brain works in such a way that the less often we meet a familiar and familiar phenomenon, the more often we begin to notice it.

Think about this phrase. As soon as you start looking for deals - you find them)

Volunteer syndrome

An interesting experiment was carried out: teams of volunteers who reported to the police about any disturbances in public order were introduced in a high crime area.

At first, there were calls only about serious crimes. However, then the crime rate in the region decreased markedly and the volunteers began to call the police for less significant reasons: crossing the road in the wrong place, someone walking along the street at night and similar nonsense …

Phantom Menace

In another experiment, people were shown several sets of identikits with completely different facial expressions: from frightening to absolutely friendly ones. And asked to choose those that look ominous.

At first, people quite adequately chose the most “brutal” physiognomies, but then scientists began to remove them from the samples, leaving more “ordinary” faces. And people began to call threatening those persons who at first seemed harmless to them.

Why? Because they were told to FIND threatening faces.

The experiments described above clearly show that when you are looking for something, you will definitely find it. Like deals on the chart.

Our brain is trying to match all the facts so as to confirm our point of view. And this leads to losses.

The only way to fight this effect, according to psychologists, is to determine the goals set as accurately as possible and write down specific formulations.

In the case of trading, the medicine is simply - a trading plan.

If the transaction corresponds to all items of the trading plan, there is a signal. If at least one does not match - you are just bored …

Practice on the demo

Naturally, having installed a new trading system on a chart, you will not see deals in 2 seconds. Any new strategy requires you to get used to it. A demo account helps with it perfectly.

How long should I get used to the new trading system? It depends on the timeframe and frequency of transactions. If this is intraday trading, weeks are enough. In the case of daily charts (D1) - about a month.

How often do you need to check the chart?

Check your timeframe. If D1 - once a day, If H1 - once an hour. And so on. On timeframes below D1, you should limit the range of trading when you are looking for signals. There is usually no sense in checking charts at night on low timeframes.

Conclusion

To summarize: the more you look at the chart, the more often wrong transactions you have (they can be profitable, given the random nature of the market, but not on the system). The best signals are visible immediately, literally in the first second. But, of course, if you have experience with the strategy and the correct identification of signals from it, a demo account will help.

Oddly enough - the same thing in life. Waiting and reacting to situations, proposals, events are often more effective than trying to set goals and achieve them. But more about that some other time … )

Regards, Michael

ForexTraderPortal.com