Most novice forex traders believe that to make money in forex trading they need to predict forex price direction in advance to win. The fact of the matter is if you try and predict where forex prices are going to go you are destined to lose! It’s obvious really when you think about it.
If you try and predict you are hoping or guessing where prices will go and relying on hope or guessing, in any venture is not a good idea and in forex trading it leads to equity wipe out.
A Better Way To Trade – Confirm the Move.
You don’t have to predict though you can act on confirmation and if you do you are not relying on hope or guessing – you are getting the odds in your favour and this can lead to long term profits.
For example, a trader sees prices dipping to support and simply enters the market – he has no idea of whether the support will hold, he is simply guessing and hoping.
Trade Like a Pro
The professional trader doesn’t simply buy into support he WAITS For prices to turn up and watches price momentum to confirm the fact and when prices are moving away from support he enters.
If you wait for price momentum to confirm support has held you are trading with the odds and this is the real way the professional forex trader’s trade.
No guessing or hoping they are trading the confirmation or the reality of price change to increase their chances of currency trading success.
How To Confirm Momentum.
If you know nothing about momentum indicators then you should – their an essential part of any traders Forex education.
If you want to learn forex trading correctly, you must understand and use momentum.
95% of Forex traders lose and in most instances it’s because they rely on hoping and guessing and don’t use the confirmation of momentum.
Great momentum indicators to look at are:
Average directional Movement ADX Relative Strength Index (RSI) - both were developed by trading legend Wells Wilder and the stochastic indicator developed by George Lane.
There are of course other momentum indicators but the above 3 are a great place to start.
When using a forex trading system you should use the following steps:
Look at tests of support and resistance and ONLY execute your trading signal - AFTER Momentum has confirmed your view.
You may well say that this will miss the bottom but you cant spot that in advance anyway (and no forex trader can) so don’t even try.
Forex trading is a game of odds and if you don’t get the odds in your favour you will lose.
Markets are a Game Of Odds Not a Science!
95% of traders lose, because they fail to grasp that forex trading is a game of odds and believe in scientific predictive theories like Gann, Elliot wave or following the Fibonacci number sequence – they don’t work.
Keep in mind Elliot died a pauper, Gann sold courses to survive and the Fibonacci number sequence had nothing to do with finance!
Play the odds and you can win, with your forex trading strategy –try and predict without confirmation and you are guaranteed to lose – PERIOD.
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