Using technical analysis and forex charts is an excellent way to make money in forex trading. The problem is there are a number of myths that traders fall victim to and lose. The mistakes are easy to avoid and enclosed.
1. Trying To be to Complicated
Many traders see all the indicators that are available to them and think they have to use them, after all 10 indicators are better than 2 - Wrong.
The best forex trading systems are simple and this means they are more robust in the hard world of real trading with fewer elements to break, than a complicated trading system. Less really is more in forex technical analysis! All the best forex trading strategies used by successful traders are relatively simple and yours should be too.
2. Predicting Prices
If you try and predict forex prices your predictions will be as accurate as your horoscope and you will lose. Predicting is another word for hoping or guessing and that won't get you far in life or forex trading. What you need to do is to simply act on the reality of price change.
Sure you miss the exact change but you can't predict that anyway. Your aim is to make money not strive for perfection!
3. Scientific Methods
Leads on from the above and currency prices unfortunately don't move to a scientific theory. This is of course obvious because if they did, we would all know the price in advance and there would be no market.
A forex market moves because we don't and never will know what happens next. So forget prediction and forget science, they won't help you your trading the odds but if you trade them successfully you will make a lot of money.
4. Invalid Data
The biggest mistake novice traders make is to believe the myth of forex day trading and scalping.
Forex day traders never make money and never will - why?
Because the data is invalid and all volatility in short term time frames is random.
As volatility is random, you can't get the odds in your favour and you will lose. You need to trade longer term time frames where you can get the odds in your favour and this means long term trend following or swing trading.
The above are the 4 biggest mistakes traders make with forex charts and there easy to avoid.
If you want to learn currency trading the right way, then you need to understand forex charts can help you achieve currency trading success only if you use them in the correct manner. Simple odds based, currency trading system which trades the reality of price change is a simple yet powerful way of making big long term gains.
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