Even though all wise traders keep an open mind on their strategies, and break or bend all the rules, trading on live forex signals puts a lot of pressure on the trader. So limitations have to be imposed, through the use of rigid rules and discipline. Day trading forex live, or just having to act there and then, as soon as the signal appears, does require extremely sharp focus. What discipline offers to these fast-acting traders, is exactly the ability to stay focused. This is why all martial arts rely so much on discipline. Because there’s little time to think and react. Traders acting on live forex signals are still allowed to break rules relating to their strategy, but only in advance, before the trading session starts. During the actual trading session staying focused is their one and only priority, because there is no time to think. More experienced traders have developed methods for dealing with extreme volatility and fast moving markets, and specifically for assessing their day-trades, once they have been placed. If the time available to them is anything form a few minutes to half-an-hour, that is long enough to let the trade prove itself, and then apply their assessment methods. Some day traders apply time limits on their trades. So that if the trade is taking too long, and more than 30 minutes to become somewhat profitable, it is seen as a doomed trade, bound to become a loser. So such trades are closed past the 30 minute limit, regardless of profitability. Other day traders go further, and devise methods for actually reversing trades that they believe they are bound to become losers. And these methods can help traders be better prepared, no matter what happens next. The basic idea is that probability of success in day trading can be estimated in a matter of 30 minutes, as long as the trade entry criteria are valid.
Live Forex Signals and Volatility
Volatility can produce false live forex signals, or just ruin signals that would otherwise have been good. Forex trading signals are often misleading or lack conviction. Because day traders don’t pay attention to momentum and volatility. Momentum can be identified through various indicators and LSS pivots. Volatility can be estimated based on the expectation of news release days. Typically, a currency pair will trade with limited volatility on the days and hours leading up to an economic report release time. And volatility will increase dramatically right after the release time. By paying attention to all these indications, traders can customize their strategies. A volatility-specific day trading strategy will work much better than a primitive strategy. Where all days are considered to have the same amount of volatility. All this forex trading info should be taken into account by traders, and this could allow them to handle their trading signals much better. It is worth mentioning that seemingly minor factors, such as volatility or LSS pivots, can have a huge impact. When all these different pieces of information are combined in a balanced way, trading can be enhanced dramatically. This is all because trading works on probability, and in probability theory even a seemingly minor factor can change the net result by as much as 30%. This is evident in games of thought, such as poker, where the player gains a seemingly small advantage, say 1.5% if they play some hands in a specific way. 1.5% may sound too small, but together with good money management it can have a huge positive impact on the player’s goals. In trading too, probability is in control, and traders can achieve order out of chaos. Small increases in probability of success result in huge increase in end profitability. Probability is also the basis for all sophisticated stock valuation models. And for assessing risk. Probability is carefully measured by all successful investment banks, and no number is too small or irrelevant to their analysis.
