| If you want to be successful at forex trading then | | | | - Trading fundamentals by themselves is hard as its |
| you need to know how and why prices move - | | | | only half the equation |
| many traders think this is obvious but its not and | | | | - Trading is a game of odds and you need to get the |
| that's why 95% of traders lose. Here we will look at | | | | odds in your favour to win |
| the factors that move currency markets and how | | | | Now you know the above how do you get a forex |
| you can profit. | | | | trading strategy for currency trading success? |
| First let's start with a simple equation: | | | | The simplest way is to base your forex trading |
| Supply and Demand Fundamentals + Investor | | | | strategy on forex technical analysis. |
| Perception = Price | | | | Not only does it take into account the fundamentals |
| While the above equation is simple enough, it's | | | | it also takes into account how investors perceive |
| deceptive and most traders fail to understand its | | | | them. |
| significance, when they learn forex trading. | | | | Technical analysis simply assumes that all |
| Fundamentals | | | | fundamentals will be quickly be reflected in price |
| These are the supply and demand facts and they | | | | action and in today's world of instant communications |
| help move price but the person studying these facts | | | | and online trading, this is truer than ever before. |
| has a problem - while the facts are there for all to | | | | Technical analysis more importantly, takes into |
| see, we all see them differently and draw our own | | | | account how investors perceive the fundamentals. |
| conclusions about what they mean. | | | | While prices do not move to a scientific theory, |
| Our actions combined with millions of other traders, | | | | human nature is constant and this is reflected in |
| creates the price. | | | | repetitive price patterns on any forex chart. |
| The facts are there for all traders to see but we all | | | | While charting is not a science, certain formations |
| draw different conclusions that's why the facts alone | | | | that present themselves do offer trades where you |
| are not enough to help you trade. | | | | can put the odds in your favour, with a robust |
| It's a fact that markets collapse when they are most | | | | currency trading system. |
| bullish and rally when they are at their most bearish - | | | | You won't win every trade - but if you trade the |
| this is investor psychology at work. | | | | odds, you will win more than you lose and pile up |
| Investor Perception | | | | huge long term profits. |
| Of the facts creates the price and we are not | | | | Most novice traders when they try and learn |
| creatures of logic, we are creatures of emotion and | | | | currency exchange don't understand the way prices |
| these are reflected in the price. | | | | really move and think they can predict, trade news |
| It's a fact that greed and fear dominate investors | | | | stories and use scientific theories and they lose. To |
| and these emotions cause price spikes away from | | | | win at forex trading the best way to trade is to |
| fair value. These price spikes never last long and are | | | | trade the reality of forex prices changes - without |
| easy to see on any forex chart and they never last | | | | predicting, focus on the odds and assume any trade |
| long and return to fair value. | | | | can go wrong. |
| So what do you need to understand in terms of the | | | | The equation for forex price movement is essentially |
| above, in terms of your forex education? Here are | | | | simple but deceptive. |
| the salient points: | | | | Now you know how and why forex prices really |
| - Never predict price movement as humans behaviour | | | | move, you can build a forex trading system to help |
| cannot be predicted | | | | you enjoy currency trading success. |