Forex Trading is not that easy. All FX traders, before they enter this business, think that they will be rich very quickly and make $20 000 in one or two weeks, but when they begin trading currencies, they discover it is not true. It is not easy to make money especially when we work with money. It is a very tricky business. Many of us think that there is a conspiracy planned by "THE BIG GUYS", they know what we think, what we plan to do, and they do the opposite to steal our money. Many times we think to make the opposite of our decision (if I see the market is going up, then I will sell). And we begin searching for someone to help us making at least 200 or 300 pips a month. Probably many of us work with signals advisors who simply took our money and probably do not help us making decent profit. Many of us thought to stop trading; many of us quit FX trading, but I think most of us will not quit easily because we see in it a golden opportunity to have our own business and make our fortune!
Foreign exchange is an opportunity to make a fortune and at the same time, it is an opportunity to loose our money. We can make a fortune if we know how to handle Forex. If we do not know how to control Forex it will destroy us, so we must be stronger than it. And if we do not know how to control it with our own hands it will destroy us too. So how can I be stronger than this ferocious beast? It is simply by learning, observing, and practicing. The FX market will not go anywhere — it will be trending and ranging forever, so learn from experienced traders how they became that good, observe charts and look for common points, look for the reason why the price changes direction. And when you discover the reason that influences a currency, you will have in your hand the first tool that gives you control. And each new thing you discover, try it on a demo account, see if it is valid, and develop it. In this Forex guide, I am helping you to find your way. This Forex guide does not give you the fish but it teaches you fishing. There is no conspiracy theory in this business, no big or small guys, we lose because we do not know. And the first thing we must do to become good traders is to admit that we do not know and we must always learn.
In this guide, I will give some clues and I will leave you to learn, observe, and practice.
First of all, you must know that you must use fundamental and technical analysis in conjunction. Both complete each other. So do not rely on one and leave the other. Fundamentals are one of the factors that influence the market, so if you are in a long trade and suddenly the trading currency went down, go and see if a report was released and see what its forecast was and what the released data was and compare this data to your chart, and you will have your first tool to control your business.
Second, in my opinion, all the technical indicators did not help me at all. I tried all the combinations and nothing worked. Indicators describe the status of the market but do not give you information about the next direction. I read an article about a guy who describes his Forex trading strategy. I was completely lost. He uses a combination of 12 indicators EMA340, SEMA890, EMA2900, etc. And he inserted Fibonacci in it. I was totally lost. Even if his strategy offers 95% success rate, I will not use it because I can control the market by using simpler techniques. So we do not need to seek indicators. I only one indicator — Bollinger bands, which is the perfect weapon in my battle against Forex trading. So I want you to look at Bollinger bands and see how it affects a currency, focus on it, and read well this guide. You will discover a lot of things and you will have your second tool.
Third, suppose you are in a long trade and suddenly, for no reason, the currency rate went down. There are no released reports, it just turned down. This looks weird. But weird things are those we do not understand. But if you observe your chart and go back several hours or days, and drop a trend line from higher swing points you will see that the price turns down because it reached that trend line. You see, there is no mystery! So this trend line will be your resistance and if price breaks it, it will continue going up. But going where and till when? Observe very carefully and you will learn as I did. And no need for midnight or afternoon candles, be simple as you can. That beast is not as ferocious as you think. So breakout is your third tool.
Fourth, what timeframe to use? It is up to you to choose the suitable timeframe: H1, H4, or D1? I do not know. Compare the charts and you will see the suitable timeframe. Timeframe is important and when you find it, you will have your fourth tool.
And that is it. I repeat: observe your charts and focus, and think in these clues. And the more you think the more you discover. Read other Forex guides, learn strategies, and get foreign exchange books.
I earn good profit from my trading strategy because I program it. I gave my system the data and leave it do its job. This eliminates the fear factor and gives me more time to go out and have fun.
I hope this guide gave you some useful tips and techniques that will help you in your foreign exchange trading.
by Joe Chalhoub