Forex trading market has become very popular in recent years. But as it is difficult to achieve success and Forex trading arena? Or let me reword that question, as many traders achieve results consistent profitable forex trading market? Unfortunately, very few, only 5% of dealers achieve this goal. One of the main reasons for this is because traders are concentrated in Forex wrong information to make decisions and their negotiation totally forget the most important factor: Price behavior.
Most systems are made Forex trading off technical indicators (moving average (MA) crossover, overbought / oversold conditions in an oscillator, etc.) But what are the technical indicators? They are just a series of data points plotted on a graph, these points are derived from a mathematical formula applied to the price of each pair of currency. In other words, this is a price chart drawn in a different way, that helps us to see other aspects of price.
There is an important implication in this definition of technical indicators. The fact that the readings obtained from them are based on the price action. Take, for example, a long signal crossover MA, the price has been enough to make the short period crossover long period MA MA generating a long signal. Most traders see as “the crossover MA made up the price, but it happened the other way around, MA crossover signal has occurred because the price has risen. Where I am trying to achieve here is that, in the end, the price dictates behaviour as an indicator of action, and this must be taken into account in any decision taken negotiation.
Trading decisions based on technical indicators without taking into consideration price action will give us less accurate results. For example, even a long signal generated by a crossover MA because the market is approaching an important resistance level. If the price suddenly starts to bounce back off important that there is about to take this signal, the price action tells us the market does not want to go. Most of the time, under this situation, the market will continue to drop, MA, ignoring the crossover.
Do not get me wrong, technical indicators are a very important aspect of trading. They help us see certain conditions, which are otherwise difficult to see a look of pure price action. But when it comes to pulling the trigger, price action inclusion in our Forex trading system to put the odds in our favour, will be higher probability of generating jobs.
So how to create a perfect system Forex trading?
First of all, you must make sure your system of trade fits your personality, otherwise it will be difficult to follow. Each operator has different needs and goals, and there is no system that fits perfectly all merchants. You must create your research on different styles and techniques trading indicators to find a concept that works well for you. Be sure you know the nature of any technical indicator used.
Secondly, the action of prices included in your system. Then take only signals along if the price behavior tells you the market wants to go, and short signals if the market gives indication that it will go down.
Third, and most important, you must have the discipline to follow your Forex trading system strictly. Try first on a demo account, then move on to a small account, and finally, when the feeling of being consistently profitable and easily implement their system to a normal account.
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