This may seem odd as it’s an accepted wisdom, but if you try and apply it in your forex trading strategy you will lose money.
If you don’t realise why this is - read on and we will explain why.
Of course, the aim of all traders is to buy in at the bottom of trends and sell out at peaks – but it’s impossible to do and the way most forex traders do it means they lose.
The key to understanding why you can’t do it, is to realize that you have to predict in advance where prices will go or buy into a low or sell into a high and “hope” the levels hold.
Fact is you can’t predict where forex prices are likely to go and if you rely on hope then you shouldn’t be trading forex.
What you have to do is not predict but get confirmation of price momentum changes, above the level of support - BEFORE executing your forex trading signals.
A simple example will show you how to do this.
Many Forex traders watch a support level such as, Fibonacci level, pivot point etc, and as prices come to perceived support; they simply buy into it just above the level.
There logic is, they are in at a low “if” the level holds – of course the important word here is “if”.
Support lines, Fibonacci levels, pivot points break frequently, so if you try and buy into them just hoping they will hold you will buy the low will see you lose.
A better way to trade:
Is to use price momentum to check that support and resistance will hold - and then trade on confirmation.
Trading on confirmation gets the odds on your side trying to predict will see you lose it’s as simple as that.
So how do spot changes in price momentum?
Great indicators to use are the stochastic and relative Strength Index (RSI)
You simply watch for prices to move to support and then turn up supported by RSI or stochastic.
You won’t buy the bottom you will miss a good bit of the move, but by trading in this way you will get stopped out less and always trade with the odds – this means bigger forex profits longer term.
“Buy low sell high” is an accepted investment and many traders accept it at face value trade and lose.
Over 90% of forex traders lose and “buying low selling high” without confirmation will see you join them, don’t fall into this trap.
Related Articles
Online Forex Trading - a Simple Powerful Method Making Big Profits
By: Sacha Tarkovsky | 20/03/2007 | Currency Trading
We recently put together a very simple system from free info we got from the Internet and traded 4 trades to show its potential and we have closed profits on 4. This simple system is for all to use so try it and see how powerful it is
There is now another potential opportunity which we will look at with these indicators.
This system is simple and effective and any trader can use it novice or pro, also all the info you need is free.
Forex Markets - the Perils of Online News Sources
By: Sacha Tarkovsky | 30/05/2007 | Currency Trading
Forex markets are exciting and with the rise of the Internet, we’ve seen a huge rise in the amount of news available all at the click of a mouse.
However, despite all the advances in communications - and the quantity of news available, the ratio of winners to losers remains the same in the Forex markets:
Trading Opportunity – the Euro a Live Example a Trade for Big Profits
By: Sacha Tarkovsky | 21/03/2007 | Investing
The Euro against the US Dollar is showing a trading set up that could yield some great profits regardless of whether the currency moves up or down.
Let’s look at how this currency pair can be traded and how a move either way could make some great profits.
Forex Trading Success – Getting the Right Mindset for Big Profits
By: Sacha Tarkovsky | 16/05/2007 | Currency Trading
90% or more FOREX traders lose and only 10% or less achieve FOREX trading success.
Everything about trading however can be specifically learned.
The reason so many traders fail, is not they can’t be successful (anyone can) they simply cannot adopt the right mindset needed for trading.
Online Forex Trading – Accepted Wisdom That Will Lose you Money
By: Sacha Tarkovsky | 21/03/2007 | Currency Trading
When I read a lot of accepted wisdom by so called experts, I wonder if these people have actually traded in their lives.
Here is some common advice that I see all the time, that if you follow it you will lose.
Don’t fall into the trap of accepting it or following it.
Forex Trading - Why Most Traders Fail to Run Profits
By: Kelly Price | 22/06/2007 | Currency Trading
This may sound strange but it's true - most forex traders cannot accept big profits even when they are presented with them. Most forex traders fail because not because they can't restrict losses, but because they don't have the courage to accept profits. Let's see why.
Online Forex Trading – 6 Common Errors That Will See you Lose
By: Sacha Tarkovsky | 23/03/2007 | Currency Trading
If you are looking at online forex trading, in this article you will find some common errors that will see you lose.
Many of these are accepted ways to make a profit and you will see many writers give convincing stories that they will help you make money, but they won’t.
Make these errors and you will lose, so here they are:
Forex Day Trading – the Dangers of Curve Fitting
By: Sacha Tarkovsky | 26/05/2007 | Currency Trading
In Forex day trading you see many systems that have fantastic track records in back testing, yet they can never match this performance in real time and the trader wipes out his equity.
The reason for this is the concept of curve fitting - if you don’t understand its significance you will lose.
Latest Currency Trading Articles
Day Trading and the Mind
By: Terry Leslie | 26/07/2008
What impact your mind frame has on your day trading activities will in part be determined by how emotionally tuned you are. In some cases, if you happen to blow with your emotions, your day will be heavily affected by other things in your life, frustration, or a few bad trades.
Foreign Currency Investment Strategies
By: Tyler Ziggler | 25/07/2008
I wanted to take the time to talk to you about foreign currency investment strategies. There is a huge potential in this market to make some good money if you're willing to learn.
How Do Foreign Exchange Traders Make Money Online?
By: Charles Nash | 24/07/2008
I'm going to answer the question on how do foreign exchange traders make money online. Well, it's actually quite a simple process.
Easy Foreign Exchange Trading Tutorial
By: Tyler Ziggler | 24/07/2008
I wanted to take the time and give you an easy foreign exchange trading tutorial. This is one of the best markets in the world for profit. I think it can be demonstrated by the fact that three trillion dollars a day move around.
Currency Trading Education Tips
By: Tyler Ziggler | 24/07/2008
I wanted to take the time to share with you some of my currency trading education tips. This will help you learn the important parts of this business a lot better. Knowing the basics just isn't good enough. It's often the little things that make up the trader and make them a good trader. Too many people end up losing a fortune of money because they're just not prepared for the little things. I've been trading a long time now and I learned a lot about what it takes to be successful at this. I'm g
Trade Currency Online Smartly
By: Tyler Ziggler | 24/07/2008
I wanted to show you how to trade currency online smartly. This is a tough business and I know most people I hear from have been sold on this idea of quick riches and a 24hr trading period. If only it was that simple. This is a tough business on a global market place. You're going to be competing along side other individuals and huge banks. You have to know what you're doing or you'll lose all your money. You can't wing it. You can't know the basics and make it some profits. This is a business o
Easy Currency Trading Strategies
By: Tyler Ziggler | 24/07/2008
I'm going to share with you some easy currency trading strategies that I have been using to help myself make some profit. This market can be very rewarding, but I've seen a lot of ambitious people start out and lose a lot of money. Of course these people don't trade today and the reason is simple; they really didn't have a good knowledge base starting out. They just threw their money into the market and hoped more would come out. That's just wishful thinking. It requires sound strategies and beh
Currency Market Trading
By: Tyler Ziggler | 24/07/2008
Currency market trading is quite an old business for people to participate in, but has become quite popular in recent years due to the internet. This market, only a decade ago, was dominated by large banks and firms. Today, individuals from the comfort of their own home can participate and make good profits in this market with very little to start up with. This isn't a place to get rich quick. I've seen plenty of people lose a fortune worth of money because they assumed it would be easy. I'm goi
More from Sacha Tarkovsky
Facelift Costs – the Secret of Reducing the Cost by 70% Instantly!
By: Sacha Tarkovsky | 11/08/2007 | Women's Issues
Many people would love to have a facelift ( Rhytidectomy) but cannot afford the cost of around $10 – 15,000, however informed patients are getting face lift costs reduced to as little $3,000!
How are they doing it? The answer is quite simple they....
Breast Enlargement - Get a Womanly Sexy Look at a Cost That May Well Suprise You!
By: Sacha Tarkovsky | 11/08/2007 | Women's Issues
Breasts are one the major identity features of the women and all women are concerned about this area and many want a breast enlargement operation.
Until now many have been put off by the cost, but the cost of breast enlargement has recently fallen dramatically in price.
This article is all about getting the operation of your dreams at a cost that may well surprise you.
Liposuction Costs – Why you Should Consider India to Get the Look you Desire
By: Sacha Tarkovsky | 11/08/2007 | Women's Issues
Tummy Tuck or abdominoplasty, Liposuction of fat deposits has become hugely popular as an instant way of improving physical appearance.
Many patients are however put off by the high prices in Europe and the US and are traveling to India to get the same treatment at vastly reduced cost of 60% are more!
Arthritis - Cure it Now at a Cost That May Surprise You!
By: Sacha Tarkovsky | 11/08/2007 | Diseases and Conditions
Arthritis is a debilitating disease that causes severe physical pain and emotional turmoil for millions of people who suffer with it.
Many do nothing about it, simply because they feel the cost of joint replacement surgery is too high...
Overseas Property Investment - Choosing the Best Destinations
By: Sacha Tarkovsky | 23/07/2007 | Real Estate
When looking at overseas property you need to first be careful in the country you pick to invest in and you also need to be careful in terms of location. Let's look at some points to consider and a great destination, recently voted one of the top ten in the world.
A Novice Forex Traders Guide to Fundamental Analysis
By: Sacha Tarkovsky | 23/07/2007 | Currency Trading
If you are new to forex trading you have access to a lot of fundamental analysis as the click of a mouse from banks brokers and news wires you can look at and trade upon it – let’s look at forex fundamental analysis and how to use it.
Primorska Property – Slovenia an Investment for Above Average Growth
By: Sacha Tarkovsky | 22/07/2007 | Real Estate
Slovenia property is attracting more foreign buyers than ever before, as it has emerged as one of the worlds best investment property destinations and was recently voted as one of the top ten, with estimated growth in the next 10 years being as much as 300%!
Slovenia Houses - Why Savvy Investors are Buying
By: Sacha Tarkovsky | 22/07/2007 | Real Estate
Slovenia is a country that many people are unaware of as a property investment destination however this is all about to change, as Slovenia has recently voted one of the top 10 places in the world to buy investment property and buying houses in Slovenia is "hot" and becoming more popular with overseas property investors.
Finance 
| Posted: 02-06-2007 | Comments: 
