Forex Trading Fact - If You Try and Predict In forex Trading You Will Lose

(by Monica Hendrix)

Most forex traders think they have to predict where currencies will go next to win but this relies on hope and guessing and the market will kill you – most novice forex traders make this mistake and lose. There is another way and it will make you money so let’s look at it.

The Myth of Market Prediction

There are many people on the net that claim you can predict markets in advance and their Wrong and the facts confirm this:

1. If you could predict prices in advance with scientific theory then we would all know the price and there would be no market – that’s common sense! A market is market because it’s unpredictable and moves because people hold different opinions.

Now you get a lot of scientific theories the king being Elliot wave but that never made Elliot any money and is not scientific its all subjective judgment – if its subjective its not a scientific predictive theory!

You also get Fibonacci numbers prices are supposed to retrace to exact levels but they don’t – try it and lose. This theory is nothing to do with financial markets and was actually devised to solve a problem based on the copulation of rabbits! And has nothing to do with finance.

So if you can’t predict how can you win?

You trade the odds and trade on confirmation and this means simply following price momentum.

For example if prices dip towards a level of support you don’t assume it is going to hold - you WAIT and get confirmation and that means prices testing support and then turning up. You then trade with price momentum.

You are not guessing or hoping you are trading the reality of price.

If you don’t use momentum indicators now is the time to learn. There are many indicators to choose from, but two of the best are the:

Relative Strength Index and Stochastic

Why the odds are in your favour?

You are trading the odds.

Forex is an odds game you will lose trades but if you trade with the odds, you will have more winners than losers and pile up big money over time.

So when you trade forex don’t predict and rely on hope trade the reality, trade the odds and make money – losing forex traders think they need to predict to win but as we have just shown, you this is a myth and will simply see you lose.

Trade the smart way on confirmation and get the odds in your favour for big forex profits

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Forex Trading Strategy - 3 Major Ways To Improve Your Trading Skills In Forex Trading

(by Peter Lim)

If you are trading forex as a beginner, or if you have been trading for some period of time but have not been a consistent profitable trader, then it may be necessary for you to take a pause in trading and to reconsider and review your forex trading strategy with the primary objective to improve your trading skills. Here are three factors you need to look into.

Develop and "over-study" your trading system

Your trading strategy should involve the use of a defined trading system. The first step in a practical trading strategy is to develop or adopt a proven trading system that will incorporate generating signals for entry and exit positions with the relevant risk management controls such as initial stop loss, trailing stop losses , risk-reward ratio requirement. There are many trading systems but generally they can be classified into systems that are capable of, from a functional purpose, trading the bottoms and the tops, trading at the outbreaks, and trading the pullbacks. But among all these trading systems, I would like to single out time-price trading or price action analysis which can be very powerful effective trading systems that you can use. Once you have developed or adopt these trading systems, over-study them. In other words, you must keep on studying how to use these trading systems and use the trading systems in a disciplined way. This is important because any deviation from following the trading signals from the system is going to work against you. The sure way to ruin is to over-ride well planned and well thought out trading action from a proven trading system.

Understand the nature of trading

In forex trading, like in any other business, there are losses and gains. Being consistently profitable does not mean there are no losses. There are times when your trades may not pan out, but once they hit your stop losses, take the trading signals and cut your losses. Understanding this is important because it keeps you level-headed so that you are able to handle losses and continue to take the trades as they come. In trading, the pressure may gets heated up especially when you are faced with a series of losing trades. But if you keep to your trading strategy, those losses will be small. When the signal works, and moves into a sustained trend, it is very usual to make a lot more profits that will cover the series of small losses which you may have sustained in following strictly to your trading system.

Have an Overall Wealth Creation Plan

Your forex trading activities should only form part of an overall wealth creation plan. In your forex trading strategy, you may use part of your trading profits to add on to your capital monthly, and also withdraw some profits for savings or as an income to "pay yourself to trade". In other words, you pay yourself as a forex trader with your profits, creating an income source as an incentive for performance. As part of your wealth creation plan, you may like to pay yourself up to 20% of the profits montly as your income or allowance. At the same time, allocate 10% fo the profits into a miscellaneous account that will pay for trading related literature, courses, seminars or software that will add on new skills to help you to trade better. The balance of 70% of the profits can be ploughed back into your trading account as additional capital.

Having a forex trading strategy allows you to have an overall perspective of whatever you are doing as a forex trader. The forex trading strategy acts as a simple guide that will allow you to grow as a trader and yet maintain a way to tap the profits from your trading in a sensible way as you develop your career as a professional trader.

Be sure to read the related article " Practise Forex Trading Part #2 " of this series to discover how you can apply a good forex trading strategy, avoid the major trading flaws, and start to earn a consistent income trading forex. Click "Practise Forex Trading Online Part #2" to read this related article now, or go to http://forex-trading.cashflowpc.biz for more free information.

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The British Pound – Another Profit and a Lesson for Novice Traders

(by Sacha Tarkovsky)

The best trades very often tend to be the most uncomfortable.

Buying significant breakouts works, but you never get in at the bottom (and let’s face it we all want to buy low and sell high) but “buying high and selling higher” is much more profitable if, supported by price momentum.

Most novice traders hate doing this.

They miss the trade because they want to buy the bottom, then want to wait for the pullback to get in.

In most cases this does not yield an entry with the best risk to reward.

Most major moves start from market highs NOT market lows.

If you don’t grit your teeth and learn to buy them, you will simply miss out on most of the best trends.

When you have significant resistance broken and price momentum on your side the odds are very much in your favour if you enter the long side.

Sure, you miss some of the move but odds are the move will continue when important resistance is broken.

By not predicting and acting on confirmation, you will enjoy some great profits with breakouts.

So how far will the pound go up?

No one knows or can predict, so look at the charts and look for clues.

The pound could drop when the RSI peaks and the stochastic lines cross to the downside and point down with bearish divergence.

These indicators are great for getting into trades and their both great indicators to take profit with as well.

Watch them closely and act on confirmation.

Trading online FOREX is all about getting the odds in your favour.

If you trade important breaks of resistance and support with price momentum on your side, you will make some great profits.

If you read my articles regularly you will know we give live trade set ups for you to look at and tools you can apply to spot and enter trades in live situations.

The British Pound set up worked well and a great profit has unfolded, but there is an important lesson I wanted to share with you here.

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