I see numerous advertisements from gurus and system traders who say they can predict prices in advance with science – but this is impossible and if you try it you will lose. Avoid this forex myth and learn a better way to trade…
Predicting is another word for hoping and guessing and if you predict, your prediction in forex will be as accurate as your horoscope! You don’t get anything in life for hoping or guessing and the same is true in forex trading.
Why there is No Way to Predict
There is a huge industry online that sells courses and currency trading systems based upon the law of human behaviour.
Human nature is constant they argue and they know the law – follow it and you will predict and win but there’s a problem with this logic:
If there was a scientific law of investing everyone would know where prices were going and there would be no price movement! Furthermore, if a law is based on science it needs to be totally objective and work all the time – that’s the scientific definition. If someone had found the law of market movement they wouldn’t tell you or me they would simply make themselves billionaires.
The theories Of The Far Out Crowd
The most common methods that are sold which are supposed to be scientific are based on:
- Elliot Wave
- WD Gann
- Fibonacci
Are any of them scientific and tell you what to do?
Of course not, there all subjective and that’s not scientific by definition. Elliot died poor, Gann made a lot of money then dumped it and poor Fibonacci – his theory (which was to solve a puzzle of multiplication) has been hijacked for something it was never intended.
The far out investment crowd, love all the above theories and there mystical connotations – but they are not scientific and are not objective.
If it’s not objective and doesn’t work all the time – it’s not scientific – PERIOD
The REAL Way to Win
Trading is not a game of science it’s a game of odds. Just like the poker or blackjack player doesn’t win every hand you won’t win every trade but you can make a lot of money by trading when the odds are in your favour.
Trade the reality of price change as it happens and don’t predict. Sure you will miss a bit of the move but you wouldn’t be able to see that anyway so there is no point in trying.
Can you make a lot of money doing the above?
Of course you can – it’s the only way to make big gains.
Try trading a breakout method – this means basing your forex trading strategy on buying new highs and selling new lows. It’s a fact that most major forex trends start from these levels and if you wait for them and trade them, you will make a lot of money.
Leave science to the far out crowd and get a forex trading system that’s based around trading the truth and reality of price change and trade the odds.
The scientific theory of human nature is one of the biggest forex myths out there.
Sensible and logical people in other walks of life for some reason believe them despite the fact there obviously isn’t one – don’t make the same mistake.
By: Monica Hendrix
Posts Tagged ‘Odds’
Forex Trading Myths – The Myth You Can Predict Forex Prices In Advance
March 22nd, 2010Forex Market Timing – Using Momentum to Trade for Huge Profit Potential
March 20th, 2010
If you want to get better market timing for your forex signals you need to understand price momentum and how it can get the odds in your favour. If you have not used momentum oscillators before, then its time to make them part of your forex education.
Confirmation
If you simply try and buy low sell high by selling into resistance and buying into support your making a fatal error – why?
Because you are predicting which is the same as hoping or guessing and you don’t get rewarded for relying on hope in any venture, let alone forex trading.
Many novice forex traders think that to win they have to predict – but as we don’t know the future, this is not going to help you make money, you simply don’t have the odds on your side.
If you learn forex trading correctly, you will understand that you need to act on the reality of price, confirmed by momentum oscillators which are leading indicators and can confirm trend changes.
Let’s look at the correct way to use momentum oscillators in your forex trading strategy, so you can enjoy currency trading success.
Momentum & Support and Resistance
For example, when a price gets near to support you don’t just simply buy – you wait for confirmation that price velocity is turning away from the level, by using momentum oscillators.
You’re not hoping or guessing – you’re acting on the reality of price change.
We don’t have time to go through momentum oscillators in detail here (there covered in our other articles) but two of the best are – RSI and the stochastic indicator.
Look them up – their easy to understand and use and all you need to do is watch for simple visual setups.
Momentum oscillators can also help you take advantage of some of the best moves which don’t involve looking for support and resistance to hold but help you spot if it will break.
Momentum and Breakout Trading
If you want to catch the biggest moves with your forex trading system you need to trade breakouts.
The fact is the best market trends don’t start from market lows – they take off from new market highs.
Traders who sit back hoping for a lower entry point – end up just waiting as the trend accelerates and DOESN’T pullback.
Buying a new market high is difficult will it continue or do you get the worst possible entry point?
Momentum oscillators can help you decide.
If you have a breakout on your forex chart supported by rising momentum, chances are it will continue and you should go with the break. If momentum on the other hand is weak, it could be a failed breakout and should be avoided.
It’s all about getting the odds on your side and that’s what momentum oscillators help you do.
Momentum and the Odds
Momentum oscillators can help you time market entry better and also help you stay out of trades that don’t have good odds. If you use momentum correctly, you will increase your odds of currency trading success.
So if you are trading forex keep in mind:
Don’t rely on hoping guessing or predicting – rely on trading the reality of changes in price momentum and enjoy greater forex trading success.
By: Kelly Price
Learn Currency Exchange – What You Need To Do To Win
March 18th, 2010
This article is all about learning currency exchange the right way and will show you how to get the right forex education to win.
The first very important point to keep in mind is that the vast majority of forex traders lose all their money and do it quickly. It’s not that they don’t have the ability to learn; they just get the wrong education, or do not have the right mindset.
This is the equation you need to keep in mind
Robust Simple Trading System + Confidence in + Discipline to Apply = Currency trading success
When learning currency exchange, keep in mind learning a system is easy and you only need a simple trading system which can trade the odds to succeed.
You Need Confidence in What Your Doing!
You must learn it yourself (even if you follow someone else’s system) you must know how and why it works, to have confidence in it.
Confidence is vital for discipline, as you are going to have to apply your system through periods of losses.
Discipline the Key to Success
If you think trading with discipline is easy think again – its not but it’s a learned skill and if you master the above you can make a lot of money.
Forex trading sees so many people lose because they simply never do it themselves they rely on gurus or worthless forex trading robots which don’t work.
If you follow something you need to understand why it will give you success that’s why you have to take responsibility for your actions.
Why You Are in Charge Of Your Destiny
Today, it’s fashionable to consult an expert and in many areas of life their useful but in forex trading no. Were not dealing with an area where you are guaranteed a result like when you fix a car were dealing with a market that is unpredictable and is an odds game.
If you think someone knows better than you in forex trading, your odds on to lose.
In forex trading you have to execute and believe in the trading signal – if you don’t you wont win it’s that simple.
Learning a Method is Easy Applying It – Is the Hard Part
If forex trading was easy then there would not be big rewards and most traders accept making money isn’t easy – but they can do it with the right mindset.
Learning the basics of currency exchange is easy but executing your trading system with discipline is hard – your destiny lies in your hands.
If you accept the above then you have the right mindset to enter the winning minority of traders, who make the big returns from global currency markets.
If you learn currency exchange the right way the profit potential can be life changing but you must accept in the first instance responsibility for your destiny and be prepared to follow your trading plan with discipline, to achieve long term currency trading success.
By: Kelly Price
