It is very important to understand the current trading environment. If you were a construction worker or a landscaper it is safe to say that you may check the weather outside before going to work. Therefore, as a trader it is important to know what the pulse of the market is. One simple way to do this is to follow the U.S Dollar. When ever you see the dollar lower it will generally give and upside bias to all commodity and inflationary stocks. For example, if the dollar is lower it is important to look at stocks such as Potash(POT). POT is a leading agriculture stock and very inflationary. In this case a weak U.S. Dollar would be beneficial to agriculture stocks.
Simply put, it is important to know the trading environment to start the day.
