So I am begging to get the idea, that before starting a trade i should look at the market in terms of two or three different currency pairs to see if there is a kind of rhythm long or short going on among the various pairs? And like map it out on paper before I open a position?
Its a good idea to criticise your own plan before you execute it. Look at the other significant pairs. Each of the 8 major currencies is featured in 7 of the most significant 28 pairs. It would be high-risk to go long on a currency which is being sold in all the other 6 pairs it is seen in.
What do you mean by map it out on paper? That’s what charts are for?
You are right about charts, but me thinks looking at a chart over a period of time say week or so one might see duplication at certain time of the day and keeping track of that on paper. For any one currency pair.
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I think it’s a good idea to keep a trade diary so that you can reflect on what you did wrong or right
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It is always useful to calculate corelations between several assets as each currency pair may contain some insights about some other pair.
I feel that it is a sort of a common practice among professional traders to find the interconnections between different financial instruments. The first time I managed to notice it was in the stock market where the vast majority of assets grew along with the common trend in the economy, however, there were also several stocks whose prices moved in the opposite direction. Such knowledge provide traders with better understanding of the market and current economic situation which should be examined from different angles.
All of the assets are always somehow interconnected on the market and it is always useful to look for these connections and correlations.
It is a good idea to learn as much as it is possible about the market if you trade professionally. However, I always face with the situation when I know the aspects which are necessary for the adequate market analysis but I cannot bear all of them in mind. I constantly miss something. So, my point is that it is good to know much about the market, but you should also be able to implement this knowledge on practice because otherwise, there will be no pragmatic use of you knowing that.