If you want to learn forex trading, then you need to understand the equation enclosed (most traders don’t) if you do and can see its significance, then you can enjoy long term currency trading success.lets look at the equation for success:
Here it is nice and simple:
Findamentals ( supply and demand facts) + Investor Perception = Price movement
Now that’s simple! But consider its significance and understand that most traders don’t, because they base their forex trading strategies on the following forex myths:
- Following the breaking news stories is a great way to make money
- Day trading limits risk and can be rewarding.
- Forex prices can be predicted.
- Markets move to a scientific theory.
Believe any of the above and you will lose and lose quickly.
Let’s take a look at the equation in more detail.
We all know the supply and demand situation affects the price but it’s not the fundamentals that are important it is the way humans perceive them.
We all have the same facts to look at but we all decide what they mean in our own way, with the emotions of greed and fear controlling the bulk of traders.
Try and trade news stories and you are simply seeing a story nothing more and if traders got rich trading the news there would be a lot more traders who make money.
Day trading works of course it doesn’t – the time span is to short how can you possibly predict what millions of traders will do in a few hours? – You can’t.
Forex prices cant be predicted either, as that’s just another word for hoping or guessing and you wont make any money doing that and this is linked to the fact there is no scientific theory of market movement. If there were, we would all know the price in advance and there would be no market.
What you really need to understand regarding the above equation is:
Forex trading is chaotic but you can win if you trade the odds.
It’s a fact that traders throughout history push prices too far – this is trader psychology at work. Short term price spikes never last for long and their easy to see on a forex chart and their tradable for profit for savvy traders who can spot them.
Certain chart patterns reflect human psychology, if you can learn to spot them and trade them you can trade the odds and win.
You simply react to the reality of price change and go with the trends – no hoping or guessing just trading the reality of price.
If you use charts you can you see the fundamentals as well as the trader psychology.
All a forex chartist does is assume that all fundamentals are immediately reflected in price action and in today’s world of instant communications that’s truer than ever before – but forex charts give you something more.
You get to see how the participants perceive the fundamentals and its humans that determine the price.
If you have read this article and understood it you will see the common myths that most traders fall for and lose and a better way to win.
Think about the above equation and what we have said here and you will have a valuable piece of forex education which can set you on the road to learning forex trading the right way and help you enjoy long term currency trading success.
By: Kelly Price
It’s a fact that many of the worlds top traders are either good poker players or came from playing poker to Forex and the reason they are so good at Forex trading is the skills of poker are very applicable to trading and there is much you can learn…
It’s a fact that poker players tend to make far better traders than geeks or nerds and that’s because, they see Forex for what it really is – a high stakes game where simple systems applied with discipline, are more robust than complicated ones.
Lets look at the key areas you can apply poker skills to trading.
1. Forex and Poker are Games of Odds NOT Certainties
Many look for some hidden order to price movement and create complex theories they think will work but they break in the brutal world of trading, as prices only move to the odds and not to certainties and this means waiting for high odds set ups and taking losses and keeping them small, until high odds trades emerge.
2. Responsibility for Action and Confidence
Most traders try and follow others or buy a robot and think they will make money easily. The good poker player though knows when he sits at the table he is on his own and responsible for his results and no one can help him. He has confidence in what he is doing, because he has learned all the skills needed and doesn’t rely on anyone but himself.
3. Discipline and Money Management
Most traders can’t take losses and keep them small and can’t trade with discipline but you have to manage losses with discipline, to win long term in both Forex and poker.
The good poker player will pass hands by and fold and cheerfully lose, as he knows he must keep his losses small and wait for the right opportunity. He has confidence a high odds hand will come, he just needs to preserve his chips until the time is right.
4. Courage and Conviction and Bet Size
Most traders even when they get a big trend can’t make the most of it. They bet too little and take profits to soon as they lack confidence in what there doing and courage to bet big. The poker player on the other hand, will bet big and have the courage, to see the hand through to the end and make as much as possible from it.
5. Focus on Making Money not being Clever
In Forex trading you are not judged on how clever you are and how hard you work you are judged on the profits you make and thats all. If you want to be clever do something else. Forex trading is a combination of a simple method applied with confidence and discipline with one aim making money.
Confidence, Courage and Discipline = Success
When a poker player sits down he is out to win, he has no ego and takes his losses and knows they must be kept small – he has to lose to win and knows that he then, has the courage to hit high odds hands and maximize his gains. All these traits come together, to see a huge number of poker players emerge as super traders.
By: Kelly Price
If you are involved in forex trading, you obviously need to generate forex trading signals for profit and you will be able to make bigger profits and achieve long term currency trading success, if you combine a visual view and then trade off shifts in price momentum, so let’s look at how to do this.
A Visual view
Be objective! The right price is the market price and you can see this clearly by using trend lines. There is no better way to spot areas of support and resistance to trade than to use trend lines.
Many traders however like to use subjective indictors to do this like cycles and Elliot wave but these require you to decide where support and resistance lies.
Why bother?
Drawing trend lines and looking at support and resistance gives you the reality and objective areas you can trade against.
You can use other indicators such as moving averages and Bollinger bands, but you need to start with trend lines and use these as back up.
Furthermore avoid Fibonacci retracments, they are simply assumed levels and they break at least as often as they hold.
An internal view.
As we have discussed above, good old fashioned trend lines will give you the reality of price and important support and resistance levels clearly right in front your eyes.
You now need to calculate the odds of success of trading into these levels.
You will need some momentum indicators to do this – these will tell you the strength of price movement up or down and help you calculate the odds of success.
For example if price momentum weakens into resistance chances are it will hold if it increases on a break of resistance chances are the trend will continue.
There are two great price momentum indicators that any novice can use effectively:
The relative strength Index (RSI)
Developed by trading legend Wells Wilder (if you have not read new concepts in technical trading get a copy) its over 25 years old but a classic work and this is a classic powerful indicator.
The stochastic indicator
Developed by George Lane, this is one of the best momentum indicators if not the best, you can use.
There easy to use in forex trading and are covered in our other articles in more detail.
Trading is an odds game!
Trading is an odds game and for this you need to see the reality of price as it is and then get the odds in your favour by watching shifts in price momentum.
It is the shifts in price momentum you can use to execute your trading signals and get the odds in your favour.
If you follow the above tips and get both an external visual view and combine this with price momentum, you will have the basis of a powerful currency trading system.
Furthermore, you will be using objective analysis and trading on the facts, rather than using subjective analysis, which means you have to predict, which by its very nature is doomed to failure.
Follow the above tips and they will help you get the odds in your favour when trading forex and lead you to currency trading success.
By: Kelly Price
Forex scalping is a method of trying to take many small profits and build up big consistent profits over time, with low risk. Here we will look at the best forex scalping systems and how to day trade for profit…
I have been looking for the best forex scalping system since I first started trading and still haven’t even found one that makes money! Today, you see lots of them advertising big gains – but there is a problem and it’s the risk warning below:
“CFTC RULE 4.41 – Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown”.
So all the day trading records you see aren’t real dollars, there paper dollars made on paper knowing exactly what the prices did! This really should not be presented a track record as a child could do it.
So now we know all the systems advertise track records that are not real, why doesn’t someone break the mould and publish one – say, 2 or 3 years supported by broker account statements – or why doesn’t the vendor trade it for real?
Well the answer is that forex scalping is based upon flawed logic and is doomed to fail long term.
Just like the punter playing roulette in the casino as you never can get the odds in your favor.
If you can’t get the odds on your side you won’t win.
In day trading, all daily volatility is random and takes prices anywhere – so how can you key off support or resistance levels? You can’t, you may as well flip a coin.
Think about this …
In all corners of the globe, there are traders like me and you – all with our own opinions skills and emotions at work and countless millions of us make the price you see on your computer screen, so how can you tell what this vast mass of forex traders will do in a few hours? You can’t.
You do here scalpers talk about the science of human behavior and all need to do is know the law of it and you can win – great theory but no one has achieved it and if of course there was a scientific theory, then we would all know the price in advance and there would be no market.
These systems feed on greed and naivety and marketing companies know this.
So they write some nice copy of how you can make X million for doing nothing put up a track record that is totally unbelievable and based on sand i.e a paper simulation, not proven or tested or anything, just a simulation and wait for people to buy and they do.
The company gets a system sale and the FX trader a loss.
You can make a lot of money in forex trading but not by using a forex scalping system. Leave them to the lazy traders and get yourself some sound forex education, on trading long term forex trends for profit and you can enjoy currency trading success.
By: Kelly Price
It’s a fact, that anyone can learn Forex and anyone can make money fast but the statistics show that most traders lose money and the figure is 95% which is a huge percentage. In this article, we will look at how to Learn Forex the right way and make a great second income.
If you want to make money in any profession you need the right training and you need to learn skills; in Forex trading despite the huge percentage of losing traders the vast majority think they can buy currency trading success by trusting their money to a cheap Forex robot or other sure fire system and make no effort! These traders soon lose their money because, if these cheap get rich systems worked 95% of traders wouldn’t lose money.
So you know you need to learn skills but the good news is currency trading is essentially simple and you only need a simple system to win, make a system to complex and it will have to many elements to break. If you base your system on charts, all you need to do is watch for high odds chart patterns and trade them and this is a totally learned skill.
In Forex trading though, having a system which can make money is not enough to ensure you make money because you have to execute it in the market and follow it with discipline. A major reason, why most traders lose is the fact they cannot take losses and keep them small. They let losses run, trade extra trades to get losses back or change systems all the time and these traders get wiped out.
In currency trading, you are going to have long periods of losses and in these drawdown periods you must keep losses small and keep on track and not let your emotions come into your trading. Learning to lose and keeping losses small is actually the key to winning long term. If you keep your losses small, you will get big profits to run to cover these losses and make big gains on your equity.
If you learn Forex trading the right way, have a desire to succeed and the motivation to learn, your all set for currency trading success.
By: Kelly Price
An essential element of your forex trading education is using valid support and resistance to time your trading signal. Here we are going to walk you through a live example of how to use it properly.
The currency we are going to look at on our forex charts is the Japanese yen.
If you look at the yen daily chart, you will see a very valid resistance level at the 108.00 level and since March of this year there have been numerous tests of it, over 20 and yet the dollar has failed to close above it supported by momentum.
This resistance is very valid because there have been so many tests. Resistance or support gain validity
- the more times they are tested and hold
- The more different time frames and the wider apart they are
- The traders who trade the market and the news sees the level as significant
Watch the level then confirm the Trade
The way to trade it is to wait for the rise but DON’T sell until you see momentum turn down and two great indicators for timing your trade are the stochastic and the Relative Strength Index. Simply wait for the level to be tested and wait for them to turn down.
Never just assume a level will hold, wait for confirmation via momentum indicators
Once this occurs you can be short and you know when you’re wrong – if prices close above resistance.
This simple method of trading into valid resistance or support works and providing you time your entry correctly with momentum indicators, it can make a lot of money.
We have used this simple strategy to clear thousands of pips profits, this year and we have kept it simple, nothing complicated about it but it doesn’t mean it simple strategies can’t make money they can.
While resistance holds you keep doing it sell into the level and take profits when the dollar becomes oversold, then wait for the next test.
Follow Reality of Price Change
If the price breaks up and closes strongly above resistance, the odds will favour further strength in the dollar.
Simple and Effective
Sure it’s simple but it can be very profitable and the above is a good example of a low risk, high reward way of trading into valid resistance.
You don’t need to do anything else, than trade the reality of price change on the charts and if you do and you confirm your moves this simple forex trading strategy can make a lot of money.
This article was written on the 2nd Of August, good luck and good trading.
By: Monica Hendrix
If you want to increase your forex trading income and skills you should join a forex training program. This kind of training is the best you can get in terms of the knowledge you will gain and how much it will help you. There is just too much risk in the forex industry right now for people to start trading without receiving the proper training. By taking part in a training program you will easily put yourself in the top 10% of foreign exchange traders.
A good reason for joining a forex training program is the fact that when you join one of these programs you will be exposed to so much new information and knowledge about forex that you will feel like a whole new trader. The advantage that people are getting by utilizing forex training is almost unfair to all the traders who really have not taken the time to truly learn forex. This is why there is currently a 90% failure rate in this kind of investing. The forex pros are just easily beating the new traders. With proper training methods, you will be able to make more money with less risk and eliminate the advantage that the FX experts have over you.
One of the biggest things that holds back most traders and makes them start terrible trades is fear of risk. The fact is, it is very hard to estimate how risky a particular trade is. By getting into a forex training program, you will trade more confidently and securely because you will be able to roughly guess the chances of a trade being good or bad, and will be able to adjust yourself to those odds. This is a skill that is usually only attainable by forex masters.
If you think that you want to join a forex training program, there is one thing that you should look out for before buying. Try to find a program that has many types of training in one package. This will allow you to get the most improvement out of your training for the least amount of money, and will also make it easier to learn methods and techniques because you will have multiple methods to take in the new information. This is the best way to learn a skill and forex trading is no exception.
By: Nnamdi Iregbulem
If you want a simple way to make money in Forex then you should learn how to use FX charts. You don’t need to have a college education to learn this method of trading or spend a lot of time on your method, all you need is 30 minutes a day and your all set to make huge gains.
If you look at price charts of currencies, you will see the them move in trends up or down which last for weeks or longer and these are the trends you need to focus on and if you do, you can trade a few times a week and make a great second income.
When trading with charts you don’t need to study the health of the economy or look at the financial news because this is opinions of where the price may go but you are going to trade the price as it is on the chart. You are not focused on why a currency is going up or down you want to make money when it does.
The above sounds simple and it is and the good news is you can learn a strategy in a few weeks and then, start making big gains in 30 minutes a day or less.
When putting together a strategy, you should focus on keeping it very simple and this means learning high odds formations and using two or three indicators to confirm your trades. Many people make the mistake of thinking complicated strategies make more money but this is a myth – make a strategy to complicated and it will have so many inputs, it will simply break down in real time trading.
You can win with a simple Forex trading strategy but you must make sure you cut losses quickly and run your profits. Most professional traders only win around 50% of the time but because they keep losses small and run their profits, they still end up making huge gains.
Can you learn to spot repetitive high odds chart patterns?
Of course you can and if you trade your strategy with discipline and confidence, you can make huge Forex gains in around 30 minutes a day.
By: Kelly Price
If you want a Forex trading strategy that works, is simple to understand and make money with you will find two enclosed which you can soon enjoy currency trading success with…
You have a choice in terms of time frames you can trade in, you can either swing trade ( a few days to around a week) or long term trend follow for weeks or months.
Do NOT bother trying Forex day trading or scalping it doesn’t work, as all volatility is random. There are lots of systems sold saying it does – but there all simulated backwards on paper and have no chance of making real money.
Right lets look at our two forex trading strategies for profit.
Breakout Long Term Trend Following
This method makes really big gains because all big trends start and continue from new market highs or lows. By buy buying or selling these breaks, you have the odds on your side and most big trends last for weeks or months so profits can be huge. Most traders can’t do it though!
Why?
Because they think they have missed a bit of the move and wait for the pullback – but prices don’t pull back on good breaks, they sail over the horizon and the trader waiting for the pull back, laments on what might have been.
If you are selective with breakout trading you can make big gains. I know traders who trade less once a month and in 30 minutes a day, they compound triple digit gains!
Forex Swing Trading – Taking Advantage of Overbought and Oversold
Forex swing trading suits the trader who likes more action and profits and losses come quickly and there are plenty of opportunities. Within any major trend prices hit over bought and oversold levels and you sell and buy into these areas and make profits.
Swing trading is a great way to make money and keep risk low, because humans always push prices to far in either direction and these spikes can be traded for profit.
Whichever method you choose, keep this in mind – don’t predict!
Wait to trade the confirmation of price change on the chart and use some momentum indicators to confirm your trade, that way you will have the odds on your side and a greater chance of success.
Either methodology will work, you can learn to do either in a couple of weeks and remember – you should always keep your Forex trading strategy simple, add to many indicators or make it to complicated and it will have to many elements to break, Forex trading is simple so keep it that way.
So pick the method that suits you, get the right Forex education and in a few weeks, you could be trading with confidence and enjoying Forex trading success.
By: Kelly Price
