Wait, don’t open your trade
Seriously, I want you to stop for moment and think about the currency pair you are about to trade.
If you are taking your trade off the short term charts, take a look at a higher timeframe and ask yourself:
Is it really worth the risk? Do I have a clear idea of what the market is likely to do in the next hours, days, minutes (depending on the timeframe you are trading)?
This is how it works:
What happens on long term timeframes is always more important than what happens on the short term timeframes. For instance, a sharp movement on the short term charts might be just a small retracement on the long term charts.
And let me tell you something, I always like to put the probabilities in my favor (and I suspect, since you are a trader, you are like me) and that’s the reason I always trade in the direction of the long term charts (which is what I call the market condition).
I always trade off the 15M, 30M or hourly chart, but I always trade in the direction of the 4H and daily charts.
So forget about trading the currency pair with the tightest spread, it’s like choosing your girlfriend/boyfriends because of the color of her/his hair. It makes no sense.
I’d rather trade a 5 pip pair where I know what the market is likely to do, than a pair with 1 pip spread and I have absolutely no idea what it is likely to do.
Let me know what you think.