Saturday, January 3, 2009
The 'ODDA' Principle and importance of Demo Currency Trading.
The currency trading offers an environment typified by financial risk, danger and uncertainity.The currency trading also occurs in an environment that immensely, financially rewards the efficiency of mental processing.The successful currency trader is one who can, rapidly observe market conditions, orient himself, integrate information into effective decisions and quickly act upon those decisions.Larger currency traders may even issue their own disinformation, masking their intentions to buy or sell or leaking misleading informations to draw in the bulls or bears.The currency markets sometimes masks its intentions with false moves, quick thrusts and large periods of inaction.All these creates an atmosphere of risk, dander and uncertainity. This is the context in which 'ODDA' principle has its relevance.OBSERVE what market is doing? Rising, falling or consolidating.Is volatility increasing or waning? ORIENT by placing the market's present action into context.DECIDE upon the cource of action, once the currency trader has integrated the market's current action with in the broader context of financial and economic forces.ACT and place orders based upon the currncy traders analysis.This requires an ability to rapidly orient and assess whether the currency trader is in trending or non-trending markets, volatile conditions or non-volatile, near support or resistance or away from it etc.From the observation currency trader must rapidly create and update trading decisins and then find the will and clarity to act on the plan, approach or method.Making complex skills instinctive and familiar is the key to tightening OODA loops.This can only happen, if they have broken their trading down into easily identifiable processess that can be rehearsed under pressure until they are second nature.This is where the importance of rehearsing your method on demo trading account lies.You have to trnsform yourself into the level of an expert by continuous practice and evaluation.Good Trading for my readers. Muraleedharan. http://tradinglifeinc.googlepages.com