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There’s a never ending supply of marketers trying to sell you on the idea of easy money. It’s all lies designed to part you with your money. Buying the $67 system is only the first mistake, trading with it is what really costs you money. Learn the truth about the forex.

During a profitable month in my service, a member contacted to cancel. He explained how he took the first 3 trades I sent him, and they were stopped out, and how he became fearful and stopped trading. Because he stopped he missed the next 2 trades that were very profitable. Then he jumped into the next trade which was stopped out. Then he quit altogether.

Can you see how the only difference between the winning trader, and the losing trader, is they think differently? One trader learned to not allow the stress of the forex market to control them, the other has not.

For the most part our emotions are truly illogical, when they override reason. So it is therefore very important to get to grips with what is happening in our own minds.

Everything in Forex trading is based on raw price action, not indicators. Indicators should only be used to help enhance price action. We would not drive a car, just staring at the oil, temperature and speed gauges. They are only helpers; we need to watch the road itself. You need to learn that the forex market moves the way it does due to the battle between traders buying and selling. It goes up when there is more buying demand and it goes down when there is more selling demand.

When I look at the forex market I always try to get a feeling of overall sentiment. One classic example of this is when we know a big news item is coming. The market will go into a range. This is a direct representation of everyone thinking; “I’m not trading until this news is out of the way”. Another example is why pivots work. Everyone who is in a trade is looking to get out, and many are looking to get in at the same point. So the market reflects this by either bouncing or pushing through.

“Never forget that it’s the sum total of the actions of all the traders in the market that drives its movements.”

So now you understand your aim, you just need a good system to help you pull the trigger and take action. Whatever system you choose, it needs to be closely related to price action.

It is very important to look at the market overall. You should be aware of upcoming news and recently released news. You should be aware of key levels of support, and resistance. You should also take account of different timeframes, and support levels on those too. When you learn Forex trading, you need to learn how to read the whole picture.

Every experienced trader will tell you that a good percentage of their losses are due to missing something, or loosing focus on the bigger picture. This factor is so important.

“Learn how to take a holistic view of the Forex market, and keep track of the bigger picture”

It is very easy to overlook and dismiss the importance of this information. It is probably stuff you have heard before. While you learn Forex, you will see this advice repeated over and over again. There is a very good reason for that; all successful traders understand this information, and are successful because of it.

Last 5 posts by Mark Rayner

• How To Learn Forex Trading Correctly - January 31st, 2008

Tags: Investing