Forex Price Movement - 4 Essential Facts You Need to Know For Bigger Forex Profits
Most traders simply don't know how and why Forex prices really move and fall for myths or views of self proclaimed gurus and it leads them to disaster so if you want to win at Forex trading, understand they key points in this article and you can make bigger profits.
The points we make in relation to Forex price movement below, are in no particular order of importance there all important!
1. Forex Prices cannot Be predicted in Advance
How many cheap robots or Forex Expert Advisors, do you see claiming you can predict the market with certainty and make a regular income? Loads of them and none of them work. Markets don't move to any mathematical theory because if they did, there would be no market, as we would all know the price ahead of time. Markets move on uncertainty not certainty and that's a fact.
This doesn't mean you can't win at Forex trading, you can and the way to do it is to trade high odds set ups and if your wrong, cut your losses and when your right run your profits it really is that simple. All you need is a simple trading system that trades price change on a chart.
2. All Short term Moves are Random
You get lots of traders who think they can trade the noise of the market and make money scalping or day trading but it doesn't work - why? Because all short term price movements are random and you can't get the odds on your side and that means losses. If you want to win you need to look longer term and avoid trading the market noise.
3. Markets respond the the Long Term Fundamentals Long Term and trend
Look at any currency chart and you will see long term trends and they can last for many weeks months or on many occasions years. The reason for this is a currency reflects the long term economic cycle of the country the currency represents; periods of expansion and contraction last a long time and this is reflected in currency trends. If you lock into and hold these long term trends, you can make a lot of money and it really is the best way to make big Forex profits.
If you want to know how to do it, look at a currency chart and you will see ALL big bull trends start there trends by breaking to new market highs and continue there trends from them, therefore, if you want to make a lot of money, use a long term trend following breakout strategy.
Sentiment Determines Price Movement
While markets move to the long term fundamentals, in the short term sentiment rules and it's the traders view of the facts that is important, not the facts themselves; this sees prices pushed to far up or down as greed and fear drive prices in the short term and then return to fair value after traders realize they have pushed prices to far.
If you want to trade these moves, you can swing trade and sell overbought markets and buy oversold markets. Markets will always go to far up or down and pullback and swing trading into these short term price spikes, can be very lucrative.
Forex Price Movement Trade the Odds and Win
When you trade Forex your like a poker player- you trade high odds hands and while you don't win every trade, just like the poker player doesn't win every hand but if you cut your losses and run your profits, you can make huge profits over the long term.
So use a simple system, trade the reality of price change, don't predict, trade with confidence and discipline and you can enjoy long term currency trading success.
The points we make in relation to Forex price movement below, are in no particular order of importance there all important!
1. Forex Prices cannot Be predicted in Advance
How many cheap robots or Forex Expert Advisors, do you see claiming you can predict the market with certainty and make a regular income? Loads of them and none of them work. Markets don't move to any mathematical theory because if they did, there would be no market, as we would all know the price ahead of time. Markets move on uncertainty not certainty and that's a fact.
This doesn't mean you can't win at Forex trading, you can and the way to do it is to trade high odds set ups and if your wrong, cut your losses and when your right run your profits it really is that simple. All you need is a simple trading system that trades price change on a chart.
2. All Short term Moves are Random
You get lots of traders who think they can trade the noise of the market and make money scalping or day trading but it doesn't work - why? Because all short term price movements are random and you can't get the odds on your side and that means losses. If you want to win you need to look longer term and avoid trading the market noise.
3. Markets respond the the Long Term Fundamentals Long Term and trend
Look at any currency chart and you will see long term trends and they can last for many weeks months or on many occasions years. The reason for this is a currency reflects the long term economic cycle of the country the currency represents; periods of expansion and contraction last a long time and this is reflected in currency trends. If you lock into and hold these long term trends, you can make a lot of money and it really is the best way to make big Forex profits.
If you want to know how to do it, look at a currency chart and you will see ALL big bull trends start there trends by breaking to new market highs and continue there trends from them, therefore, if you want to make a lot of money, use a long term trend following breakout strategy.
Sentiment Determines Price Movement
While markets move to the long term fundamentals, in the short term sentiment rules and it's the traders view of the facts that is important, not the facts themselves; this sees prices pushed to far up or down as greed and fear drive prices in the short term and then return to fair value after traders realize they have pushed prices to far.
If you want to trade these moves, you can swing trade and sell overbought markets and buy oversold markets. Markets will always go to far up or down and pullback and swing trading into these short term price spikes, can be very lucrative.
Forex Price Movement Trade the Odds and Win
When you trade Forex your like a poker player- you trade high odds hands and while you don't win every trade, just like the poker player doesn't win every hand but if you cut your losses and run your profits, you can make huge profits over the long term.
So use a simple system, trade the reality of price change, don't predict, trade with confidence and discipline and you can enjoy long term currency trading success.