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Sunday, September 14, 2008

Trading Forex Using Price Action - Relax, It's Not That Hard!

By Jon Ferraro

For whatever the reason, most forex traders think that trading forex using price action, has to be some kind of urban legend. They hear about it a lot but, they don't understand how it can be done. After all, they are so used to people on forex forums talking about putting 10 moving averages on their charts and thinking that is all that is needed.

People just expect indicators to tell them when to go in and when to get out. It seems easier that way. We don't have to do any of the thinking because that's what the indicators are doing. Seriously, folks, how many successful traders you know do this? If there is one thing that separates the novices from the expert traders, is that experts know what they are looking at. It doesn't have to be interpreted by some colorful indicator. The expert can tell you the reason why a price will go up or down.

This is all done through price action. When it comes to price action, the basic principle behind it, is to keep it simple. Everything you need to know about where the price is headed, what are the REAL support and resistance lines, when will a breakout occur, or how long will a price stay in a ranging zone can all be answered with price action. So start today. Take off every single indicator you are using for your charts and try to see the market in a brand new light. You'll know you are getting the hang of this when you could actually understand why a price is moving a certain way.


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