STA Blog

When I was working as a professional technical analyst, one of the most important habits I developed was finding ways to confirm or challenge my own market views. It’s easy to get attached to an idea, especially when you feel strongly about it. But confidence without confirmation can lead to bias—and mistakes.

Over time, I built a couple of techniques into my routine that helped me both validate my thinking and test my conviction.

1.Look for Variance Around the Theme

Let’s say I was particularly bullish on the U.S. dollar. It wasn’t enough for me to just look at one pair like EUR/USD. I’d broaden the scope.

I’d ask myself:

• Does my bullish dollar view still hold when I look at USD/CHF?
• What about GBP/USD, AUD/USD, or even USD/SEK?

If I noticed my bullish view was holding consistently across all these pairs, that was confirmation.

On the flip side, if the strength or weakness in the dollar seemed overly influenced by a particularly strong euro trend, I’d dig deeper into euro crosses:

• EUR/GBP
• EUR/SEK
• EUR/JPY

Were they all reinforcing the same story? If not, maybe my view wasn’t as solid as I thought.

2. What Was I Really Doing? Dow Theory in Action

Looking back, what I was actually doing—without always calling it that—was applying a core component of Dow Theory:

“The averages must confirm each other.”

In the original Dow Theory, this principle came from watching the Dow Jones Industrial Average and the Dow Jones Transportation Average. A trend was only confirmed when both averages moved in the same direction—for example, both making new highs in a bull market.

I applied the same logic to currency markets. Instead of industrials and transports, I was comparing different FX pairs around a common theme—like the dollar or the euro.
The more confirmations I had, the stronger my conviction.

3. Flip the Chart to Flip Your Bias

Here’s another little trick I used that helped eliminate bias:

If I was very bullish on a market, I would literally print the chart out and turn it upside down.

Then I’d ask myself:

“Would I still be bearish if I looked at the chart this way?”

It sounds simple—even silly—but it’s incredibly effective. Flipping the chart removes the emotional weight of your existing position or expectation. You’re seeing the market from a fresh angle, forcing yourself to re-evaluate without your usual bias.

If I still believed in the trend even when the chart was upside down, then my conviction was probably legitimate.

Final Thoughts

The markets are full of noise. It’s easy to fall in love with a trade or become anchored to an opinion. But your convictions need confirmation—and your analysis needs stress-testing. Whether you’re using Dow Theory explicitly or not, building habits that cross-check your views, eliminate bias, and test your conviction is essential for any serious trader or analyst. In my experience, the more methods you have to validate your thinking, the better your decisions will be.