HOW TO MAKE MONEY IN FOREX

HOW TO MAKE MONEY IN FOREX TRADING

Why Most New Forex Traders Eventually Lose.

Statistics show that the majority of new traders to the Forex rely on technical indicators and black box systems to guide their trades. It seems like every Forex education website offers this type of training. That said it’s only natural for new traders to assume that these systems are the ones you must use if you want to conquer trading the Forex.

And you would be partially right.

These methods are fine if you are the type of person that likes to work with cluttered (not to mention confusing) charts– and if you are perfectly happy being so far-sighted that you trip over things right in front of your face.

I don’t know about you, but I like to see where I’m going.

The problem with technical indicators and black box systems is that they don’t allow you to adapt to sudden changes in the market.

And let me tell you, the Forex market changes daily. Heck, it’s known to change hourly, depending on what’s happening in the world.

To successfully trade the Forex, you have to be able to change with it. Cluttering your charts with indicators and other complicated systems might help you forecast the market – as it exists right now – but what if something changes?

The truth of the matter is technical indicators will not reflect those changes quickly enough. They lag behind. When they don’t reflect those changes right away, you lose.

If indicators are the only tools you have to trade the Forex, when the market dynamic changes, you will not have the tools you need to successfully change with it and allow your trades to reflect those changes.

Commercial Traders Don’t Use Fancy Technical Indicators!

You and I are small potatoes compared to some of the bigger traders. The reason for this is simple. Commercial Traders or “Big Dogs” take huge positions and typically trade 1000’s of lots worth millions of dollars at a time. They trade for governments, banks, and large corporations.

They live by being on the right side of the market, and they can’t afford to make mistakes! These traders "see" major trend reversals sometimes days and weeks before they take place.

But they don’t do this by using fancy technical indicators or black box systems. They know those systems take up too much time, clutter their charts, and hinder their ability to adapt to market dynamics.

Instead, they pay careful attention to price action as they find major support and resistance levels!

DO THEY... MAKE MISTAKE?
YES
Here’s The #1 Mistake Most New Traders Make…

You see, I “cut my teeth” on the Forex way back in 1997, in the days before learning to trade the Forex became an Internet sensation. There weren’t all the online “resources” that there are today, which means there weren’t thousands of people trying to “teach” me different ways to be successful with it – and confusing what can be a fairly simple process.

That was a good thing.

What was even better was that I was fortunate enough to become the protégé of an inside circle of commercial traders who were considered to be the best in the business. I benefited from being taken under their wing, so to speak, and being able to study the methods and formulas they used to trade the Forex.

What I learned from them forever changed my perception on how to trade the Forex successfully.

During my training with the "Big GURUS", I observed the "mechanics" of how the pros make trading decisions. How they scan the market and how they look at their charts. I learned how they time their entries and exits. One thing that stood out for me was their uncluttered charts. They don't have layers upon layers of indicators on their charts like I did – and like you probably have right now.

I realized my emphasis was too much on understanding how to use indicators to find an entry. This is a misplaced emphasis. You probably have heard the saying: “Analysis Paralysis”. This condition occurs when you are stuck in idle because you bog yourself down in so much information and indicators that you cannot make any trading decisions – or worse, make the wrong decision by missing the obvious.

That’s what was happening to me. I’m willing to bet it’s what is happening to you too.

Price Support and Resistance are the Most Important Signals in Trading

Here’s why.

Your chart is like the artificial gyro horizon - an instrument used to inform pilots of the orientation of the aircraft relative to earth. The pilots must know how to read this instrument in order to navigate safely.

Professional traders also use a gyro horizon to see what the market is doing. They are called pivot points. Pivot levels offer traders a frame of reference so he can see what price is doing and more importantly find his support and resistance levels.