2016-02-02 | 572 Print PDF
Most forex traders have three preconceptions about successful forex trading. These are the three assumptions myths of some successful forex traders used in creating a fallacy of profit forex signals among newbie forex traders.
Myth 1: Successful forex trading must be indicator based. The first part of this article dispels this myth. There are many ways to profit forex, some of them do involve indicators used in forex trading signals, but indicators are not necessary for successful forex trading. There are professional forex traders around the globe who use naked charts to make trading decisions. In some ways, indicators delay the progression of the trader because the focus is on the indicator, rather than price action. Indicators become the scapegoat for losing streaks and often keep losing traders in a holding pattern. It is much easier for the novice trader to begin trading without indicators from the beginning relying on other forex trading signals.
Myth 2: Successful forex trading must be complex. The second part of this article is about naked trading systems. These systems are incredibly simple. Do not confuse simplicity with ineptitude. Although these systems are simple when applied correctly, they may also yield big profits and build confidence in your trading. You may view this as the meat of the article, the most important section, but I disagree. I think the third section is the most critical to your trading success.
Myth 3: Successful forex trading is dependent on the trading system. This is probably the most widely held belief among traders. This is precisely why there are thousands of forex trading system on the market, all promising great riches to the brave traders who pony up the money for the next Holy Grail.
Many veteran forex traders understand the importance of trading psychology to profit forex. Personal beliefs and attitudes toward risk are the greatest predictors of trading success, and the trading system is not nearly as important as many traders assume. For most traders, after years of trading, this fact becomes apparent.
The third section of the article concerns trading psychology and how you may both identify and change your thinking, because this is the real driving factor in your trading success. Many readers will continue to hold onto these myths.
In fact, some readers (those who believe trading success depends on the trading system) will simply read the second section and begin trading the naked trading systems. This is unfortunate.
The first section is critical because it offers reasons for price action trading (a new belief system) and a course of action for becoming an expert at naked trading (new trading habits). The third section is where break even and slightly profitable traders will learn to move into the realm of the true professional trader.
All sections of the article are important, and it is my hope that by reading it you will find simple methods for extracting profits from the market. You can trade successfully without indicators. For many traders, naked trading is both refreshing and easy to apply. You can trade successfully with simple forex trading systems.
Simple systems are robust and powerful. However, ultimately, your success as a trader will depend, not on the trading system, but on how you incorporate your beliefs and attitudes about risk into your trading routine. I hope this article will aid you in your journey to trading success. Welcome to the world of forex trading. Forex is the largest market in the world.
A Forex trader exchange $4 trillion each day, but is forex the best market for you? The answer depends on what you are looking for. If you want a market that never sleeps, if you want the opportunity to trade at any time of the day, if you would like to make a boatload of money in a short amount of time, forex may be for you (it should be noted that you may also lose an incredible amount of money in a short amount of time).
Traders with very little money can begin trading forex. In forex, you may take relatively large trades with small amounts of money because of the favorable leverage requirements. There are many reasons to become a forex trader, but before jumping into the reasons, perhaps we should take a closer look at the characteristics of a forex trade.
“Forex” is simply an abbreviation for “foreign exchange.” All foreign exchange transactions involve two currencies. If an individual trader, a bank, a government, a corporation, or a tourist to Obudu Cattle Ranch decides to exchange one currency for another, a forex trade takes place.
In every instance, one currency is being bought and, simultaneously, another currency is being sold. In forex, we compare currencies in much the same way, currencies are traded in pairs and, thus, one currency is always compared to another currency. An example may be helpful to illustrate how currencies are traded.
If you are a hotshot forex trader, and you believe that the EUR/USD is going to go up, you may decide to buy the EUR/USD. Thus, you think that the Euro currency will get stronger, and the U.S. dollar will weaken. You are buying the EUR/USD currency pair, another way to look at this is to say you are buying Euros and simultaneously selling U.S. dollars.
The unique (and often difficult to understand) aspect of forex trading to keep in mind is this: Each forex transaction involves the buying of one currency pair and simultaneously the selling of another currency pair. If you have experience buying or selling in any market—the stock market or the used car market—then you understand markets. For any market transaction a buyer wants to buy something and a seller wants to get rid of something.
The forex market is simply a money market, the place where speculators exchange one currency for another. In many ways, the forex market is no different from the stock market. The major differences between forex and the stock market are as follows: A forex transaction involves buying one currency pair and selling another, also, the symbols to identify forex pairs are consistent and systematic, unlike the symbols used to identify companies listed on a stock exchange. Forex traders buy and sell countries.
It is true: Forex traders are basically buying “shares” in a country, just as a stock trader buys shares in a company. For example, if forex trader Ade decides to sell the EUR/USD, he is essentially selling the European Union (and buying the United States). To be even more specific, we might suggest Ade is buying the economy of the United States, and selling the economy of the European Union. Does this mean that Ade must keep tabs on all the economic data for all the countries that she is trading? The short answer is no, but we won’t talk more about news and trading based on economic news and data.