Forex Price Movement - The 2 Biggest Myths About Forex Price Changes Which Cause Losses

Most traders do simply do not accept certain facts about Forex price Movement and this is reflected in the fact that 95% of traders lose. So how and why do Forex prices really change, let's find out.

Here is a very simple equation for Forex price movement

Fundamentals (supply and demand facts) + Investor Perception of = Price Change.

Millions and millions of traders make the price and they all have the same facts to look at and they all draw their own conclusions about what they mean and all these opinions added together equals price. Now the first point to understand is this

1. Forex Prices CANNOT Be Predicted

Lots of people tell you they predict price change in advance but this is nonsense; humans are driven by emotion and that cannot be predicted.

Try and predict prices in advance and you will lose. If you want to win, trade the reality of price change only and you will have the odds on your side and while you won't win every trade, you can make a huge amount of money over time, by running your profits and cutting your losses.

2. Complex Mathematical Algorithms Work

This is a story the vendors of cheap Forex software packages promote, they sell a message of easy gains and no effort but these packages all lose and the reason is obvious:

We have already said that Forex prices move to the odds and not mathematics, so a complex mathematical theory is of no use! Most of the software packages algorithms are anything but complex but even if they were, it wouldn't help because simple systems work best in Forex trading, as there more robust.

If You Want to Win at Forex Trading Understand This!

The simple fact is that if there was a scientific theory of market behavior that worked, we would all know the price in advance and the market would cease to exit; markets move on uncertainty not certainty and that should be obvious to anyone. If you want to win at Forex trading, you need to trade the odds and as we have just said, you won't win every trade but over the long term, you can enjoy Forex trading success.

Its no coincidence that the group of people who always do the best at Forex trading and produce more super traders than any other group are, people who have come from a background of playing poker or blackjack successfully.
These guys may not be as smart as the geeks and mathematicians but they know how to play the odds and if you want to win, forget perfection, trade the odds and you can enjoy currency trading success.