Most traders simply don’t know how and why Forex prices really move and fall for myths or views of self-proclaimed gurus and it leads them to disaster so if you want to win at Forex trading, understand they key points in this article and you can make bigger profits.
The points we make in relation to Forex price movement below, are in no particular order of importance there all important!
Forex Prices cannot be predicted in Advance
How many cheap robots or Forex Expert Advisors, do you see claiming you can predict the market with certainty and make a regular income? Loads of them and none of them work. Markets do not move to any mathematical theory because if they did, there would be no market, as we would all know the price ahead of time. Markets move on uncertainty not certainty and that is a fact.
This doesn’t mean you can’t win at Forex trading, you can and the way to do it is to trade high odds set ups and if your wrong, cut your losses and when your right run your profits it really is that simple. All you need is a simple trading system that trades price change on a chart.
All Short term Moves are Random
You get many traders who think they can trade the noise of the market and make money scalping or day trading but it does not work – why? Because all short-term price movements are random, you can’t get the odds on your side, and that means losses. If you want to win you need to look longer term and avoid trading the market noise.
Predictive Computer Programs Don’t Work
You see lots of cheap Forex software which claim they use mathematics to predict price movement but if markets are not predictable, using mathematics is of little or no use.
Most of these systems are back tested (check out the disclaimer and you will see the word simulation on the track record) and the system is simply bent to fit the data. When trading forward though they lose, as Forex prices never repeat exactly the same way again. Using a cheap Forex robot is a guaranteed way to lose money.
Markets respond the Long Term Fundamentals Long Term and trend
Look at any currency chart and you will see long term trends and they can last for many weeks months or on many occasions years. The reason for this is a currency reflects the long term economic cycle of the country the currency represents; periods of expansion and contraction last a long time and this is reflected in currency trends. If you lock into and hold these long term trends, you can make a lot of money and it really is the best way to make big Forex profits.
If you want to know how to do it, look at a currency chart and you will see ALL big bull trends start there trends by breaking to new market highs and continue there trends from them, therefore, if you want to make a lot of money, use a long term trend following breakout strategy.
Sentiment Determines Price Movement
Humans are not creatures of logic, they are creatures of emotion and when greed is present, prices get pushed to far to the upside and when fear comes into play, you see prices pushed to far to the downside and you can see this on any Forex chart.
If you use Forex charts you get a view of not just the fundamentals but how the investors perceive them which is a huge advantage and that’s why charting is so popular. The one thing a Forex chart won’t give you is how bullish or bearish traders are or an indication if a trend has been pushed to far by greed or fear but the tool below will give you this key information.
The commercials are hedging and not driven by greed and fear and tend to be long at important market bottoms and short at important market tops. If you see these smart traders, opposing the speculator groups (both who are driven by greed and fear), you can look to trade with the commercials in a contrary fashion against the speculators, as a turning point is coming.
This report gives you advance warning of prices having been pushed to far and if you keep an eye on the commercial traders, you can make a huge amount of money, by tracking their positions.
The report is free and should be a key report for any trader to look at, as you get an insight for free into what some of the world’s smartest traders are doing and that’s got to be valuable information to have!
Forex Price Movement Trade the Odds and Win
When you trade Forex your like a poker player- you trade high odds hands and while you don’t win every trade, just like the poker player doesn’t win every hand but if you cut your losses and run your profits, you can make huge profits over the long term.
So use a simple system, trade the reality of price change, don’t predict, trade with confidence and discipline and you can enjoy long term currency trading success.