Archives: 2008 July

Forex Currency day trading is the trading of currencies on the foreign exchange market, which is also known as the forex market. It is a business regulated by the government an as well as by the local authorities. To deal with any types of currencies trading, you will need to go through a Licensed broker to help you with your purchases.

Of late, Forex currency day trading has become more and more popular. The lure of financial rewards for speculative financial trading can indeed be a very strong one. However it is not without its risks as well which are associated with all speculative activities.

As with any type of investment, there is an amount of risk involved and by knowing and having the best advice, you are more able to make a financial gain, no matter whether or not it is small or great is dependent upon market circumstances.

The popularity of the forex currency day trading has been contributed by several circumstances unique to this market. Firstly, there are no middlemen involved which can jack up the cost. Secondly the absence of middlemen means there are also no commissions payable. And lastly, the transactional fees are very low when compared to other money market.

As with all speculation in Forex currency day trading, there is risk involved and the risk is in relation to however much you have invested in this market at any given time.

If you’re curious about getting a deeper understanding of how to trade the forex markets, you’re going to have forget about all those lagging indicators that you’re using.

Indicators such as MACD may look great on the charts, but you’d be hard pressed to find anybody who can use it to get a deeper understanding of the markets.

I imagine many people know the rules of how to trade the MACD, but how many can actually proclaim they know what it has to the underlying reason for the price movement? No too many.

If you’re using indicators like these, they may seem like a faster way to understand the markets, but that’s just not true. What the indicator is really doing, is just being your translator. It may seem like a great idea, but all it is doing is interpreting the market from its own parameters so you see it only through it’s eyes, not your own.

There is no need for a translator. You have to fill those shoes. Let’s say you were moving to a Spanish speaking country for a year. Wouldn’t you take the time to learn Spanish before you got there? (After all, you’re spending an entire year there). I’m sure you can find some body who speaks English there, but do you really think you’re going to enjoy the local culture if you never bother to learn the language? Of course not, and it’s no different in forex. The only difference is that the language that is needed to be learned is price action.

It seems that most forex traders now are looking for the short cut, instead of using the oldest form of technical analysis: trading just using price action. Most traders though don’t seem to be interested.

All you have to do is look in any forex forum to know that’s true. Think about what you normally see in these forums. It’s always about some incredible system that’s covered with indicators or they are talking about a magical forex expert advisor that’s basically automating the process for them.

Can you tell what’s wrong with all of this?

Well for starters, they need to realize that all the indicators like stochastics, MACD, RSI, etc…. are lagging. They are great for telling you what has already happened. It provides no ability to forecast future prices.

The other thing that these traders need to understand is that 95% of all forex traders lose money. If that’s the case why would you want to be doing the same exact thing that every other struggling trader is doing?

Think about this logically. Most of the forex traders you see in forums are usually struggling. If they weren’t, then why would they be in a forum? The successful forex traders are usually to busy paying attention to the market that they don’t have time to spend in a forum.

What’s really increased in popularity are the Forex Expert Advisors. For those that don’t know, these are basically automated trading machines or robots. Developers program them using lagging indicators so the market trades automatically while you’re away.