I've ranted in the past about how I feel beginners in the forex market trade too frequently, feeling the need to always be in the market, with too little strategy and no long-term planning. Here's a few tips to trade less and take higher probability setups:
1) User higher timeframe charts. 60m at a minimum. I like to use a combination of the 60m, 4h and daily charts. The more your trade matches up on all charts the higher probability it is.
2) Journal - I always come back to this. Journaling is the best thing you can do for yourself and, while you are at it, read a good technical trading book so you can apply some of that knowledge while journaling.
3) Have a plan. Before you enter ANY trade you should know a) is the trade in the direction of the trend? b) what is my stop-loss? c) what is my tp? d) at what level does this setup become invalid (and your stop-loss should be behind this level), e) is there confirmation of the trade (e.g. is there candlestick confirmation?), etc.
4) Trade less. Just plain old take less trades. In the back of your brain you know which trades you are rolling the dice on, so stop taking them!
I can't stress point #3 enough. Have a plan for every trade. If you don't have a plan you are not trading - you are gambling. You might as well go to your closest casino and bet on red/black instead of buy/sell - at least they don't have a $30 spread (3 pips spread x 1 standard lot) just to enter.
Daily Outlook: We'll have plenty of trade setups today but I don't know how inclined I'll feel to enter any of them as the EUR/USD has not been particularly compelling of late. On the dailies (top right chart) we technically we remain in an extremely bearish downtrend and have since late 2009. The Euro has lost plenty of value over this stretch of time due to doubts about the global economy, the Eurozone specifically and the USD has gained because of its status as a reserve currency. Looking at the daily chart you can see why lots of smart money is forecasting EURUSD parity by year's end.
The 60m and the 4h are a bit more muddied. The pair recently bounced hard off its 4-year low just below 1.19 and since rose over 500 pips to above 1.2450. On the 4-hour chart (bottom chart) we can see that the bottom support of this bullish retracement is still very much being respected. This gives the short-term picture a bullish tint but I still feel more comfortable going with the overall downtrend and looking for selling opportunities.
On the hourlies the head and shoulders pattern might still form, but the neckline and our entry point has been dirtied a bit by yesterday's false breakout. Ultimately a close above 1.2350 on the hourlies will negate the head and shoulders pattern.
Trading Idea: My primary trade today will be to look for a short in the 1.2415-1.2450 resistance zone. From 1.2450 short targets are 1.2415, 1.2385, 1.2355 and 1.2325 for 125 pips profit. A more aggressive trade would be a long on another bounce off the rising trend support (currently at 1.2250) with targets up to 1.2400 for 150 pips, or a short off a sustained break below the rising trend support.