To succed in forex trading by having one profitable trade after another, one necessary ingredient as we all know is correct chart analysis. If your chart analysis is not correct, you cannot proceed further.

Chart analysis is not just about plotinhg correct currency pair or having most advanced indicators. It is also about timing as well as having a clear mind with no pre-conceived notions.

Let us look at some of the key essentials and necessaties of making sure that you analyse the chart correctly -

1. Timing of analysis - By this what I mean to make sure that when you are analysing the chart the market is ready for accepting trades. If for example you are analysing close to a fundamental announcement like Non-Farm Payrolls, then definitely placing a trade at that time will be highly risky! Or if you are analysing during off-liquid hrs, then the analysis will not be correct.

2. Plotting the indicators correctly - This is an obvious one. But often traders make mistake while plotting tyhe indicators. Sometimes they either plot too many indicators and sometimes far too few. There shouldn't be more than 3-4 indicators plotted at any time. Out of these one indicator should be primary and the rest as confirming indicators.

3. Avoiding pre-meditated mindset - This is a big point. Let me tell you an example. Years ago when I was trading, I used to have a mindset whenever I opened the charts that I need to find a trading opportunity. So, I used to look at charts differently and ecause of my pre-meditated mindset I used to find tradinmg opportunities when they didn't used to exist. Needless to say most of these trades used to end in loss.

A trader should always analyse the chart with a clear mind and be ready for the fact that the trading opportunities will not be available each and everyday. But when they exist, s/he should not second guess and should place the trade without any fear.

There are other aspects also when doing correct forex chart analysis. But if you are able to master the above 3 aspects, then you can be certain that you have got atleast 90% of analysis right!

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