Trading Forex Using Price Action - Unleash The Power

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.

I could see why this would attract most newbies traders. I mean, who wouldn’t want to have all that free time to yourself. You can go to the beach, the ballgame, dinner and a movie and all the meanwhile you’re becoming rich, right? Well, not exactly. That’s not the way it works.

Remember with expert advisors, you’re asking something from a computer that 95% of all the traders in the world can’t accomplish. Being that the forex markets are so new driven, do you really think that a computer is going to be able to quantify any kind of breaking economic news that comes out?

If you want to truly understand the reason why the market moves the way it does, it’s real simple. Less is more. Watch the EUR/USD for the whole day on a 30 minute chart without any indicators. Just follow the price action. I’ll never steer you wrong. If you focus hard enough, you’ll be able to see patterns that happen every single day. These are patterns that actually forecast the markets.

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