Some might say weekends are for hanging out with family and friends. When it comes to trading many traders make the sacrifice and use the weekend for analysis. They do this to improve their trading strategies and better themselves while expanding their knowledge. The more you practise this exercise the shorter the time period will become. A small sacrifice, a little bit of time, that reaps big rewards! Forex Weekend Analysis is the Achilles Heel for most. To the seasoned trader, it is a golden opportunity.
Forex Weekend Analysis
Forex analysis is used by the retail forex day trader to determine whether to buy or sell acurrency pair at any one time. Forex analysis could be technical in nature, using charting tools, or fundamental in nature, using economic indicators and/or news based events. The day trader's currency trading system use analysis that create buy or sell decisions when they point in the same direction. Forex trading strategies that use this analysis are available for free, for a fee or are developed by the trader themselves. – Types Of Analysis Used In Forex, INVESTOPEDIA
These are a few points to help you learn and better your trading skills over the weekend.
Review Your Previous Trading Week
Look back at your week’s trades and review them by using these simple points: (Jot these down and answer)
Weekly performance – Did it end up with a profit or loss? How was the overall performance of the week?
Following your trading plan – Was the plan followed, and if not is there a valid reason for this?
Emotional feelings – How did you feel while trading and your overall feeling about the week?
Improvements – Where can you improve your trading plan based on new knowledge?
Preparing For The Week Ahead
A weekend analysis will help you to set up your trading plans for the upcoming week. It is important to remember that each of the markets are not separate. They are reliant on each other when it comes to the purchase of bonds, equities, good and services, as they all have an effect on the levels of supply and demand for currencies (Forex, FX). Thus, the price levels of different currencies will vary when money moves around the world as investment searches for the highest and safest yields.
The news also has a significant effect on Forex and in the economies of the world. Traders will wait for news releases to confirm or deny their theories, and then make the necessary decisions to either enter or exit a trade. If the news releases occur at certain technical levels, they will attract more trading activity which can, in turn, increase the odds of a successful trade. Some news releases that occur at specific chart confluences can have a more dramatic effect on the volatility of the market and will deliver better trading opportunities.
Setting Up A Trading Plan
A trading plan will be the guide to your trading for the week. If you already have a trading plan and strategy, use the previous week’s performance to help you determine if you need some improvements. This doesn’t mean that you need to change your trading plan every week, it is simply just making sure that it is beneficial in the long run.
Benefits of strategy testing:
- It validates your trading idea and strategy against your testing data to make sure it is worth it. If you haven’t tested it, do not trade it.
- It will make you believe in your own trading plan and become a more confident trader. Confident traders make solid decisions, stick to their trading plan because they believe in it and will have better results.
Preparation Is Key
Preparation is key! Every good trader sets out the time to analyse and expand their knowledge of the past week and for the upcoming week. Traders should be passionate about what they do, but it is still weekend after all. Once you have done your forex weekend analysis you will feel a whole lot more relaxed and prepared. Go out with your friends and family and mentally prepare yourself for the upcoming week.