Producing consistent trading signals and fewer false moves have been the hallmark of FTSE, which is why it is one of the widely traded markets across the globe. The reason for consistency is the fact that FTSE consists of a massive conglomeration of individual stocks as compared to Dow Jones or DAX. Many people have made fantastic money from day trading that can bring incredible benefits to you. If you are already an FTSE Day Trader, you would know what we are talking about. In this article, you will find valuable tips that will guide you about how to prepare for the day of trading.
Start the day by checking the news
There is an opening even before the opening, and you should understand what it means in the context of trading for the day on FTSE. Be ready at your desk at least 15 to 30 minutes before the London Stock Exchange opens in the morning. The first task should be to check the economic calendar to spot news events that could likely influence the day’s trading. To be sure, that you receive the real news time set the economic calendar to the local time currently displayed. The news events are particularly useful in deciding to exit any trade that you might already be into before the event occurred because the news could have the ability to make the market move significantly. The news could trigger volatility that can make traders lose heavily.
Focus on the longer timeframe charts
Having got a feel for how the market is likely to behave based on the news it is time to focus on the charts. Assess the price action against the longer timeframes to get a feel of the market sentiment that could help to judge how the market is likely to behave during the day. This is an essential exercise before you decide to risk your money on trading. With the help of the longer timeframe charts, you should be able to plot your trend lines, resistance levels, horizontal support and trend channel lines. You should assess whether FTSE is in a trading range concerning longer timeframes or is in a trend. If it is a trend, then assess the stage of the trend that the market is facing. For trading range, plot horizontal lines to denote your judgment at the top and bottom of the range.
Refer to the 5- minute timeframe chart
Use the timeframe chart of short duration to assess the trading opportunities on the FTSE. Mark four horizontal support and resistance lines on the chart that correspond to the four most crucial trading levels of the previous day – open price and close price as well as the high and low of the day. These levels are critical for the following days trading.
As a last minute check before the market opens, refer to the 5-minute chart to gauge the momentum of the market whether the FTSE is in the trading range or it is moving upward or downward.