Trading Forex with the root cause analysis

Trading Forex with the root cause analysis

If you read my article on Pareto charts this will probably make more sense for you.

Root analysis is another tool that traders could benefit. I know that some of these things do not seem trading Forex on, but you can improve results with them. When all is said and done the results are what matters anyway.

On your Pareto chart to identify weaknesses in your trading Forex style. Root analysis is how you start to fix them.

First we need to identify the most important cause of failed trades. Once this is identified, you will need to write on top of a separate sheet of paper. Under this you may ask a question. What causes this reaction? Then you list Response. Now ask yourself the same for this new response. List it. We will continue to ask this for every new answer, until you can not come up with an answer. Generally, you will only be able to go for 3-5 levels deep. This is your main reason. This is the beginning of the road that leads to loss of Forex trade.

When you reach the main reason you have another question. How to avoid the root of the problem.

If it is an emotional issue, perhaps you should work to become aware of them feeling that the process of bad decisions. When that feeling starts to erupt, just exit your positions and stop trading Forex for the day. It is better not to Forex trade, from Forex trade and lose.

If the problem is psychological, you may need to find a routine that works for you.

A good example of this is a baseball pitcher. A major league pitcher has all the physical requirements, or he would not be in the majors. Some pitchers have been known for a quirky routines they go through each step. There are some pitchers who have had terrific seasons because it lost something in their routine. Their physical attributes have not changed, just their way of thinking. Their routine is only psychological, but results that are excluded are all to be true.