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