Forex price movement is misunderstood by most traders. Prices don't move in line with the news and they don't move to some mystical recurring scientific theory either. You can win but understand the key reason prices move or lose...
Here is a simple equation for forex price movement.
Fundamental Supply and Demand inputs + Investor Perception = Price.
Simple enough but most traders fail to see the significance of the above which is:
- The news and facts are un-important its how traders perceive them as a whole that is.
- Humans are emotional so you cannot predict what they will do.
Those traders who think they can trade breaking news are wrong and they don't understand the markets discount news instantly furthermore, we all have the same facts to see but we all draw different conclusions from them.
How Markets Really Move
As humans are emotional, there is no way of predicting forex prices in advance or some mystical scientific theory they move to which the far out investment crowd love with their Fibonacci, Gann and Elliot Wave based systems.
If you want to trade forex, you need to see it as an odds game and play the odds when there in your favour, run your profits and cut your losses. Sure, human nature means you cannot predict exactly what will happen next - but human nature is constant and we are all governed by greed and fear and this means you get hig odds formations which can be traded for profit.
Keep It Simple and Trade the Odds for Success!
All you need to do is - use a simple odds based forex trading strategy and have good money management and you can win.
Today traders make forex price movement much more complicated than it really is, traders try and apply ever more complex formulas and software to try and crack the code behind forex price movement but it's all in vain - there isn't one!
Complex Systems and Maths are NOT the Answer
This is proven by the fact that 50 years ago 95% of traders lost and the same ratio lose today; showing that advances in technology have not helped at all.
This leads to the obvious conclusion that forex trading success is not dependant on being clever, complex or the application of maths and of course this is true - its NOT and the fact we have just given you, clearly shows this.
How to Enjoy Success
Forex trading success is simply based upon a combination of a simple, robust forex trading strategy, with good money management which you can apply with discipline. Forex trading is an odds based market and if you learn to trade the odds, you can make a lot of money and enjoy currency trading success.
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