No Need to Be Accurate To Make Huge Gains
If you want to win at trading currencies correct forex market timing is needed but if you try and be too precise you will lose. This may sound strange at first but if you look at how forex prices move it will become clearer.
1. When novice traders think of market timing they are dominated by two major thoughts:
Predicting market tops and bottoms
It's very tempting to do this as you want to be in at the best possible price with your forex trading strategy but you cannot predict in advance why?
Because if you then you are simply hoping and guessing a level will hold and that wont get you anywhere in life and certainly wont give you currency trading success. Let me give you an example:
A forex trader sees prices moving to a support level and buys just above it hoping it will hold - but instead the price carries on towards support, goes through the level and stops him out.
What he should have done is confirmed that the level was going to hold (we will go through how to do this in a minute) but first lets look at another commonly held belief related to the above.
2. Buy low sell high
You will have heard this is the way to make money in investing - but it's again relying on hoping and guessing which we know will not help us win and also means you will miss the major forex trends and not get in with your forex trading signal - Why?
It's a fact that most new trends (and the strongest) develop from new market highs o and you can check this on any forex chart. Traders who wait hoping to get into the market at a better price, simply see the trend disappear over the horizon and they don't make any profits from it.
The Solution
Is to base your forex trading strategy on confirming if level will hold or break with momentum oscillators. If you don't know what they are its time to learn.
We don't have time to cover them here - but they are covered in our other articles and will give you advance warning of changes in velocity of price.
If a price is dropping to support - wait for a turn to be confirmed by these indicators.
You will miss the exact turn but you can't see that in advance anyway, so there is no point in trying and if you trade with momentum on your side the odds are in your favour.
The same technique is used when a market breakout to new highs or lows - if momentum supports the move execute your trading signal and go with the break.
Trading the Odds
In both of the above examples you have not got in at the lowest or best price but what you have done is, got in at the lowest or best price with the odds on your side and traded the reality.
Perfection and perfect timing is a myth, no one can do it and the best way is to trade the reality when you use a forex trading system and that means confirming ALL moves are going your way before trading.
Keep in mind if you get just 50% of every major trend you would be very rich. If you want to learn currency exchange the right way you will realise perfection is impossible.
Forex trading is about making money not trying to be clever and it's about trading high odds moves and then means waiting for confirmation.
1. When novice traders think of market timing they are dominated by two major thoughts:
Predicting market tops and bottoms
It's very tempting to do this as you want to be in at the best possible price with your forex trading strategy but you cannot predict in advance why?
Because if you then you are simply hoping and guessing a level will hold and that wont get you anywhere in life and certainly wont give you currency trading success. Let me give you an example:
A forex trader sees prices moving to a support level and buys just above it hoping it will hold - but instead the price carries on towards support, goes through the level and stops him out.
What he should have done is confirmed that the level was going to hold (we will go through how to do this in a minute) but first lets look at another commonly held belief related to the above.
2. Buy low sell high
You will have heard this is the way to make money in investing - but it's again relying on hoping and guessing which we know will not help us win and also means you will miss the major forex trends and not get in with your forex trading signal - Why?
It's a fact that most new trends (and the strongest) develop from new market highs o and you can check this on any forex chart. Traders who wait hoping to get into the market at a better price, simply see the trend disappear over the horizon and they don't make any profits from it.
The Solution
Is to base your forex trading strategy on confirming if level will hold or break with momentum oscillators. If you don't know what they are its time to learn.
We don't have time to cover them here - but they are covered in our other articles and will give you advance warning of changes in velocity of price.
If a price is dropping to support - wait for a turn to be confirmed by these indicators.
You will miss the exact turn but you can't see that in advance anyway, so there is no point in trying and if you trade with momentum on your side the odds are in your favour.
The same technique is used when a market breakout to new highs or lows - if momentum supports the move execute your trading signal and go with the break.
Trading the Odds
In both of the above examples you have not got in at the lowest or best price but what you have done is, got in at the lowest or best price with the odds on your side and traded the reality.
Perfection and perfect timing is a myth, no one can do it and the best way is to trade the reality when you use a forex trading system and that means confirming ALL moves are going your way before trading.
Keep in mind if you get just 50% of every major trend you would be very rich. If you want to learn currency exchange the right way you will realise perfection is impossible.
Forex trading is about making money not trying to be clever and it's about trading high odds moves and then means waiting for confirmation.
Tags: Trading the Odds
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