Words from One of Market Makers -
There are many ways to trade, and for everyone the decision making process is different.
What you have discribed are very mechanical methodology.
It would be the way to go , if you were a machine.
Try to feel the market, ask yourself questions all the time.
You are not carzy if you ask the questions , only if you listen.
Look at the chart, ask yourself,
what did the market do when it was last at this level, historically?
was this levels significant chart wise?
which direction is the market trending?
try to feel if its try to go up or down?
if you have determined the direction, it's most likely to go.
if you use indicators, try to determine the nearest safe levels to sttempt entry,
try the super over bought or oversoldlevels.in you bolinger bands.
fibonnacci levels are supposed to show market at its best equilibrium,
when at the fibo levels, whatch the mkt, is it behaving steady?
MACD are just multiple averages and are lag indicator,
intrendy mkts they widen ,
in letagic mkts they close up,
incongestions they spagattie cross.
don't read too much into that.
after entry watch the mkts.
Is it doing what you thought it should be doing?
are you comfortable with the position, if yes then add to the position.
if not get out, find a different level. and do itagain. and again until you are satisfied with your position.
when you are riding pprofits, take some out at the oversold levels to reenter near the overbought levels , vice versa.
After a few weeks , you should have a better feel of the market, you are trading.
Don't watch too many pairs.
focus on majors,
GBP and EUR should move quite in syn. YEN should behave the reverse.
watch those intermarket relationships, if any is not behaving normally ,
then be aware that something is happening in the fundamental front.
try to find out if there;s any special reason from the news releases.
Most dealers do not deal in time frames, we manage it mark to NOW,
if its going up forever, we'll keep turning long forever.
You must understand that unlike traders, the market keep making the dealers short of usd if usd keeps going up.
This is because customers will keep buying usd from them making them short,
so the dealer will have to go interbank and keep getting his dollars back to stay abreast of the markets.
For dealers, timeframe is of no consequence, it is constantly being managed.
Some dealers uses the averages, mostly just look at price levels.
There are special dealers in special Strategic Arbitrage & trading units that trades the markets like traders,
they manage exposures for the longer term.
Some of them are economist some are technical analyst.
at this section , some more advance instruments are managed, eg, OTC currency options and sythetics.