How To Start Trading The Forex Market? Part8

Start Trading The Forex Market? Part8 - HOW TO FORECAST THE FUTURE?

How To Start Trading The Forex Market? Part8

by studying the Past (Technical Analysis):

1. The best traders don't discount one or the other but understand that having an understanding of how fundamentals affect market sentiment gives him an edge over traders who don't.

2. In my opinion, TECHNICAL analysis is the easiest and most accurate way to trade on the FOREX market.

3. "The numbers don't lie" - all available information and its impact on the market, are already reflected in currency prices.

4. Prices move in trends - the foreign exchange market is mostly made up of trends and is therefore a place where technical analysis can be very effective.

5. History repeats itself - over time, certain chart patterns become consistent, predictable and highly reliable. The question is SEE them.


Traders who don't believe this clearly don't need to apply trading methodologies to technical analysis. However, research has shown that those who trade "with the trend", greatly increase their turn in making profitable trades.

Finding the prevailing trend will help you to be aware of the overall direction of the market and offer better visibility, especially when short-term moves tend to confuse the picture.

HOW does technical analysis help determine what the trend is and HOW to trade with the current trend versus against it?

Nonetheless, you learn how to use and read various technical indicators to identify long-term trends, see predictable chart patterns, and use certain rules to enter and exit trades with high probability, and while all of this involves sound logic, parameters, methods, formulas, data and research, these technical indicators, by themselves, are not the Holy Grail of FOREX trading.

It takes discipline and emotional control to stay abreast of trades through the inevitable ups and downs of the market. Keep in mind, good technical traders expect ups and downs.

Which technical indicators are the BEST?

NONE - technical indicators should only be a component of your overall customized and personalized trading system, and not a stand-alone system.

Goals as a FOREX Technical Trader are:

1). To find out the price action of a currency pair. Price is a major concern. If EUR/USD is at 1.2224 and heading towards 1.2020, 1.1980, 1.1940- the market is in a downtrend.

Despite what each technical indicator might predict, if the trend is down, stick with the trend. Indicators that show where the price is going next or what it should do are useless.

A trader should only pay attention to what the market is doing, not what the market might be doing. Prices tell you what the market is doing.

2). Always remember that technical indicators only give you confirmation based on what the market is telling you. So listen to the market and let the market tell you which method, strategy or technique you should use.

That's How To Start Trading The Forex Market? Part8


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