Top Down Analysis Checklist
What Is This?
This is a checklist of instructions that I personally follow each morning as part of my top-down analysis routine.
If you struggle with consistency or discipline then set this as your homepage in your web browser as a constant reminder to perform this analysis before you begin trading each and every day.
Perform this top-down analysis routine for each currency pair in your forex trading portfolio (where applicable):
1. Analyze the Daily Chart
- Identify the current trend (bullish / bearish / consolidation)
- Change TradingView tag for currency to represent trend (green / red / orange)
- This is to take note of your directional bias for this currency pair
- Draw in the most recent support or resistance break
- Identify 4 closest major 3x tested support & resistance levels (2 of each)
- Identify any Simple Patterns, Advanced Patterns, Trendlines & EMA tests etc.
- This is to build an overall picture of the market – stick to your strengths!
2. Analyze Your Trading Timeframe(s)
- Identify the current trend (bullish / bearish / consolidation)
- Draw in the most recent support or resistance break
- Identify the most immediate “trouble” area for your directional bias
- For determining whether or not you have a good R:R ratio when a setup occurs
- Identify relevant patterns and EMA tests – where might other traders get involved?
- Check for confluences with higher timeframes, especially Daily chart
- For added confidence and perhaps added risk per trade (if applicable)
- Set necessary alerts to detect potential trading setups that meet your rules
