Why a trader should perform research and analysis

Understanding the basic importance of pre and post trade analysis.

Research and analysis is a daily process performed to ascertain the prevailing market sentiment. It is a continuous process performed at the beginning of each trading day and each market session open.

Research objectives The higher order objectives are: a. To increase the probability of success on trades taken b. To reduce the risk of loss by both reducing the number of trades taken to only high probability setups and also reducing the actual amounts lost on trades taken.

Lower level objectives include the following: a. Scanning the market for potential pairs to focus on for the day b. Determining the market sentiment for the selected pairs. c. Selecting the pair to trade for the day.