One of the most important points you need to learn in terms of basic forex education is - that if you want to win at forex trading, do not make the mistake of trying to predict prices in advance, if you do you will lose. Here we will explain why and give a better way to trade.
We don't know the future and if you try predicting it or forex prices you are simply hoping or guessing and that will not get you anywhere in life and certainly not in forex trading.
Most traders make this mistake when trading:
They spot prices moving to a support or resistance level and then simply jump in the market and execute their trading signal - this is totally wrong and is guaranteed to lose you money over time.
Why?
Well if the price is moving to support and the trend is down why anticipate?
What you should do is waiting for prices to come to support and then start moving away - this is the correct time to execute your trading signal and to do this properly you need to learn about momentum oscillators which will help you determine when price momentum is moving in your favour.
We have written numerous articles on the use of these, so look them up and if you want to look at some good ones check out the Relative Strength Index and the stochastic, there excellent simple indicators you can learn to use in 30 minutes which is time well spent!
REMEMBER THIS:
Trading is a game of odds and to get the odds on your side, you should always trade with momentum on your side.
Do not believe the far out investment crowd who tell you there is a scientific formula for market movement - there isn't
If there was we would all know the price in advance and there would be no market!
There are many vendors selling forex trading systems based upon the works of - Fibonacci, Elliot and Gann and they didn't make any money for them and won't make money for you.
If you want to trade forex successfully then as part of your forex education you must learn how to confirm your trading signals with momentum indicators. If you do, you will have a head start on your way to forex trading success.
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| Posted: 25-01-2008 | Comments: 
