Wednesday 21st December 2011

Here's a useful exercise to immerse yourself into the price action; maintaining focus and assisting with your analysis and identification of bias.

At the start of every new candle ask yourself:

• Will this new candle break above or below the prior one?

Make it a game... which way is it going to break? Then see if you're right.

Once you're comfortable with that, you might wish to expand the idea to include some analysis.

• Will this new candle break above or below the prior one?
• What will that mean to the other market participants? Will it place any particular group of traders under significant stress?

Don't make it too complex... just your initial intuitive thoughts. Which way is it going to break and what does that mean?