How to Trade Forex Better

In order to learn how to trade forex better, one has to start with basic trading methods, and build upon these methods over time. Quick success isn’t possible.

How to Trade Forex Better than Most

In order to learn how to trade forex better than the average trader out there, one has to persevere and not allow early losses and failures discourage them. All traders, even the most profitable ones still have losing trades, nobody can ever trade perfectly. Profitable trading boils down to effective use of forex charts and good selection of a forex broker. The simplest techniques one can apply on the currency pairs, when looking at those charts are techniques involving the 10 day and 200 bar moving averages. As well as various momentum and strength indicators. These tend to be wrong about half of the time if used exclusively on a single pair. So traders look for ways to improve the usage of these indicators through inter-market analysis, and the use of additional indicators. There are no magic indicators, at least not ones that are commercially available. All indicators and trading tools that come with a charting software package are already obsolete, but that doesn’t make them useless. A profitable trader with a lot of experience can still trade profitably even when given nothing but these obsolete indicators. This is because they know that these indicators (momentum based, moving averages, and volume indicators), will be wrong half the time. Even contrarian indicators tend to be wrong that often. Any indicator or software vendor promising ‘unfair trading advantages’ or proprietary analysis, is bound to fail sooner or later, in real life trading. Forex robots belong in that category as well, they always fail eventually. In fact, complete automation has failed in all aspects of life, where the task is non routine. That’s why automation cannot replace pilots, translators, and many other professionals, including of course traders.

It’s the Non-Routine Element Which Prevents Perfect Trading

Anyone who knows how to trade forex profitably, has found that all classic and commercially available indicators work on collective, coordinated trading action. But markets only follow coordinated action for a little while, as soon as traders of longer time frames enter the market the routine breaks, something unforeseen happens, and these indicators give nonsensical signals. And what is forex without these unforeseen events, it’s simply a period of time where coordination takes control and the market moves on momentum, or lack of momentum, and trades in very predictable ways. Thereby creating the illusion that these indicators have continuous predictive power, but in reality they don’t. The non-routine nature of the markets is what makes them ever more interesting and more profitable in the long run. So uncertainty is what makes them work. If they were predictable as brief periods would have you believe, then everyone would start using MACD and CCI and moving averages, in perfectly routine profitable trading, more and more people would trade in exactly the same way, to the point where no one would take the other side of the trade. At that point markets would be moving so fast, that you would have only few seconds available to read these indicator and make the trade, before the market moved.