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Thursday, September 25, 2008

Forex Price Movement - Using Mathematical Formulas For Huge Gains

By Sonia Kristina

The aim of many traders is to use complex mathematical formulas to predict price movement and earn huge gains. Let's look at mathematical formulas in terms of making bigger profits.

Let's look at what moves forex prices first and a simple equation will suffice

Supply and Demand Facts and News + Investors View of them = Price.

They key point to note here is humans make the price and there all different in terms of skill levels, motivations and their emotions.

So how can this vast mass be mathematically calculated?

You guessed it - they can't.

Human behaviour doesn't conform to a mathematical theory, this doesn't mean you can win you can and we will show you how you can in a moment - but first lets make a few more points, in relation to mathematics and markets.

Why Mathematical Theories are Doomed to Failure

The key point in mathematics is a theory should be totally objective and work ALL the time, if it doesn't its not mathematical and it's obvious there is no mathematical theory of forex price movement, as if there were - we would all know the price in advance and there would be no market.

I have worked in brokers offices and we used to have numerous mathematicians and whiz kids as traders - all very clever forex trading strategies, all trying to beat the market and of course the market taught them some manners and took their money.

If you want to win, forget complex mathematics and use an odds based system.

How to Trade the Odds for Bigger Profits!

Forex trading does NOT reward complex or clever theories - it rewards simple, robust theories, as these have fewer elements to break in the brutal world of trading.

Human nature may not be able to be predicted with scientific accuracy but it can be very predictable at times because human nature is constant and this leads to high odds set ups that repeat themselves again and again.

Sure you won't win every set up but just like the good poker player, if you play and bet on the high odds set ups and fold and pass by, low odds set ups and combine this with strict money management rules, you can make a lot of money.

Markets are About Making Money NOT Perfection

Forget being clever and using complex equations and use a simple odds based system instead.

You won't win every trade - but trading the odds is the best you can do and it can make you rich, if you do it correctly. You don't get rewarded for being complex or working hard, you get your reward for being right with your trading signal and that's it.

Many people make forex trading complicated, when it's actually very simple. So get the right forex education, work smart and be a winner!


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