The answer that most new traders hear when they ask "how do I go about learning how to trade the forex market", is, "you have to know fundamental and technical analysis". There are some good traders who have a strong comprehension of one, but not the other. If you don't know either, you are going to have a very tough time earning a living by trading.
I don't think many traders get this message because there are so many of them that don't bother learning how to properly trade the markets. There are a ton of traders that trade off of their "gut". I know this may sound ludicrous to you, but its true.
Many traders don't know anything about the fundamentals. I mean basic things, too. For instance, many traders don't know the importance of the Non-Farm Payroll numbers and the effect that has on the market. Many traders have no idea if raising interest rates will cause a currency to drop in value. Many don't know how the differences in analyst expectations and the actual news can cause a currency pair to tank or go through the roof.
It wouldn't be that big of a deal, if more traders understood technical analysis as well, but unfortunately, that is not the case either. Many traders think technical analysis means looking at a Stochastic indicator and seeing if the currency is overbought or oversold.
An indicator will never provide accurate technical analysis. The only thing that will, is your own eyes. It can be seen on a clear bar chart. You can see the support and resistance areas. You can see where the current trend is. You can see where the market is headed.
John Templeton has been a successful forex trader after learning how to trade price action. Once he understood that all he needed to trade forex was on a plain chart with no indicators, his profits soared. You too could learn how to trade the forex market. |
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