Have you observed that traders have many monitors afront them when forex trading? You may be wondering. Traders have multiple monitors for them to be able to monitor what is happening in the forex market like technical charts of different markets and timeframes, information about the market, and order flow.
Have you noticed that many traders have several monitors in front of them when trading? We know you may be wondering why they do that, so today, we are going to help you understand why traders use multiple monitors.
Traders make use of order flow to determine the selling and buying pressure in the marketplace, which helps predicting the next flow of the price. It is frequently used with technical analysis to locate better exit and entry levels, and also to choose the order type to put in the market.
Order flow reading is an old technique in stock trading for day scalpers and traders. This shows the depth of the market. Meaning, the order flow displays the buy and sell limit orders in the marketplace.
By analyzing the order flow, traders can see order sizes at different price levels and determine the price levels where the buy and sell orders are huge. Thus, if you want to put a market order, you will recognize if the liquidity is enough at the recent price level to engage his market order without the price moving significantly.
Multiple Timeframe Analysis
Why do traders use multiple monitors? Simply, because it is satisfactory to view what’s going on in other time frames when you’re trading. Traders use 3 types of time frames namely: lower time frames for identifying healthier entry levels, normal timeframe for discovering trade setups, and bigger timeframe to find major direction of trend and support, and resistance levels.
Traders Use Sentiment Indexes
This helps the traders to identify the percentage of traders who took certain positions in a security. It is more beneficial for securities that trade on options, stocks and futures. These are standard exchanges, where you can obtain complete data.
Identifying the number of trades in various positions can help traders know when to begin hoping for price reversal.
Watch Different Markets
Several traders like to watch other markets when they are trading because it gives them a hint about what’s going to happen in the marketplace which they’re trading. Some of the markets can link to a great degree, so a shift in a certain market may show a possible alteration on the other. Correlation may be positive or negative in direction.
In addition, there are many who trade various markets simultaneously. Maintaining charts with distinctive markets helps them to look for new setups of trades instantly.
A newbie trader may not need to possess multiple monitors yet to avoid overload of information and analysis paralysis. What’s important is the skill to execute a proper trading technique he learned. As time goes by, with constant practice and mastery of his forex trading techniques, he may already use several monitors for faster analysis. Simply, the need for screens arises as you realize that you need more data to be easily accessible.
Traders use many screens because they have to monitor the things like technical charts, order flow, technical charts of various markets and market sentiment indexes.