| Using forex charts and technical | | | | 5. The Markets Move To a Scientific |
| analysis is a great way to enjoy | | | | Theory |
| currency trading success - the problem | | | | Many traders believe that as human |
| is most traders fall victim to common | | | | nature is constant there must be a |
| myths and join the 95% of losing | | | | repetitive scientific formula that |
| traders. Here we will look at the forex | | | | markets move to and they fall for |
| chart myths to avoid. | | | | scientific theories such as those sold |
| 1. Do Not Try and Predict! | | | | by discipline of Gann, Elliot and |
| Probably the most common error of all is | | | | Fibonacci and they lose. |
| when a forex trader tries to predict | | | | Why? |
| where a price is going to go to next and | | | | Because its pretty obvious that markets |
| it's doomed to failure - Why? | | | | don't move to a scientific theory as if |
| Because if you predict you are hoping | | | | it did we would all know the price in |
| and guessing and you will find your | | | | advance and their would be no market! |
| predictions are about as accurate as | | | | This is really common sense but you |
| your horoscope. | | | | would be surprised at how many traders |
| You don't get anywhere in life by | | | | base their forex trading strategies on |
| predicting and certainly not forex | | | | scientific nonsense. |
| trading - you need to trade the reality | | | | 6. No Indicator works all the time |
| of price change. | | | | This is obvious however you would be |
| 2. Trade Valid Data | | | | surprised at how many traders simply |
| If you want to trade successfully you | | | | think buying dips to a moving average is |
| need to trade the odds and you cant do | | | | a great way to make money! Always use a |
| that in forex day trading because the | | | | combination of 2 or 3 complimentary |
| time period is to short for the data to | | | | indicators and it's always good to use |
| be valid. It doesn't matter how good | | | | support and resistance lines as well, |
| your forex trading system is, apply it | | | | when generating a trading signal. |
| to day trading and you will lose. | | | | 7. Using Indicators Incorrectly |
| 3. Complicating a Trading Plan | | | | We just gave you an example of using an |
| It's a well know fact that simple | | | | indicator in isolation and also buying a |
| trading systems work better than | | | | dip to a moving average is incorrect |
| complicated ones as they are more robust | | | | usage - Why? |
| in the face of ever changing brutal | | | | Because it's a lagging indicator and |
| market conditions. Add to many | | | | cannot confirm trades - you need to |
| indicators in and your system will have | | | | combine it with a leading indicator. |
| more elements to break. | | | | Another example is traders who set stop |
| So remember keep your currency trading | | | | losses at the outer bands of the |
| system simple and profitable. | | | | Bollinger band - this is not a good |
| 4. Not Buying Breakouts | | | | idea, because it's a volatility band |
| Most traders like to buy low and sell | | | | that changes all the time, may move your |
| high and this is a by product of trying | | | | stop to far away and cause you a big |
| to predict. Traders simply don't like | | | | loss. |
| buying trends in motion when they have | | | | The above are common errors and if you |
| missed a bit of the move - well if you | | | | make any of them you will lose. Forex |
| don't, you will never catch the really | | | | charts are a great way to make money, |
| big trends and will lose. | | | | charting is simple to learn, time |
| It's a fact that most major moves start | | | | efficient and works so learn how to use |
| from new market highs NOT market lows - | | | | your forex charts correctly, by avoiding |
| so you need to forget buy low sell high, | | | | the above errors and you can enjoy long |
| as a way to make money and think- buy | | | | term forex success. |
| high sell higher. | | | | |