We have discussed several psychological aspects of Forex trading earlier and will continue doing so till all the students learn the lesson of psychological challenges of Forex trading by heart.

Today I’d like to touch the subject of technical analysis in Forex. If you have started yawning already, stop doing that(!), because I’m not going to repeat what technical analysis is for, and who invented it and why… well, only if you ask for it… but then I may start yawning… :)

Today we will speak about enhancing your everyday trading performance by adding some very essential markers to your charts.

Pen in the one hand, paper in the other, let’s start writing:

Rule Number One: No matter what time frame you trade, you should always be aware of the situations on the time frames superior than yours. E.g. if you trade on 1 hour frame, know what’s going on at 4 hour and daily time frames. If you trade 1 min time frame, know what conditions are on 5 min, 15 min and 1 hour time frames.

What kind of conditions am I referring to? Right. I’m referring to major support and resistance levels traders must, must and must know about.
Therefore, first thing in the morning with your eyes and charts open, start collecting the data and marking appropriate price levels till you chart literally looks like a grid.

In particular, mark the next price levels by drawing horizontal lines:
- Monthly pivot points (no need to draw them all, just nearest and most essential ones, if any, for the current day)
- Weekly pivots (same, only the nearest ones)
- Daily pivots (all pivots)
- High and Low of the previous day
- the current value of 200 EMA indicator on daily chart
- current value of 200 EMA indicator on 4 hour chart and so on – for all time frames that are superior than yours + on your own time frame
- Zoom out charts to draw trend lines on your main chart.
- Zoom out to draw support/resistance lines based on latest swings high and low for your main chart plus for 2 time frames above yours. (In simple words, swing high is the top of the most recent wave; swing low is the bottom of the most recent price wave).

Done!

Too much? Don’t be lazy, I don’t like lazy students… I have additional levels for you, so keep on writing.
Always remember to check out today’s economic news schedule in Forex economic calendar. Set vertical lines highlighting the time when fundamental news are due. Always know what may affect today the currency you trade with. Now we are done!

What to do with all that? Ha-hah, stare at it and like it! I promise you that will like it, because you will see how predictably price bounces at all those levels you have drawn, and how well it accelerates after breaking through those levels. The grid of levels will become your map. Confirmation for entries and logical exits will lie in front of you. Map will drive you to success, without a map you risk ending up in the Darkness… Oh yes, if you happen to be in my area, come over for dinner…

** Forex Dark Lord **

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