Clean Up Your Forex Trading With Price Action
The Forex market has its own language. This language takes the form of price movement. In order to understand and “speak” the language of the market you must learn how to read the price action that occurs on a clean, indicator-free, price chart.
Everything that happens in a market is ultimately reflected via price on a price chart. So, when you learn to interpret and trade price action, you are simultaneously interpreting and making sense out of all the global economic variables that can affect a market. Where many traders go wrong is in assuming that they will be able to read the market more effectively by trying to interpret news, indicators and (or) trading software. This is analogous to believing that you will have an easier time driving down the road on a dark foggy night than you will on a clear sunny day. Allow me to explain…
– Forget About Forex Trading Robots and Trading Software
One of the main problems with all the Forex trading “robots” and other trading software on the internet today is that they do not possess the human traits that can literally make or break you in the market. Robots and trading software are futile because they cannot develop a savvy trading sense and an “eye” for the market. Identifying Forex market bias and picking your trades wisely is a key component to what makes a trader successful over the long-term. Our current level of technology simply cannot produce a trading robot that has the ability that a human being can obtain to analyze and trade the market.
Furthermore, the claim of trading software designers that their products eliminate the problem of human emotion and discipline is entirely false. There is still a human behind any trading program, that human still must be disciplined enough to not over-ride the program or “meddle” with it. If you can’t follow a Forex trading plan that
you design, you won’t be able to follow a piece of trading software either. So, it appears as though the main variable in trading success is the particular human doing the trading, not having the “best” and fanciest sounding trading system.
In the question of which is better; the human mind or computers in Forex trading? , the clear winner is the human mind, however, it must be developed and trained properly first. So much of trading success is a result of personal development; you are very unlikely to see some out-of-control unorganized slob become a consistently profitable trader. Very often people who have a knack for discipline and organization are good traders.
– Ditch The Indicators and The Mess
Indicators are derivations of price action, so why not just learn to read the price action? Why would you purposely make trading harder than it already is? By putting messy indicators all over their charts that’s exactly what many traders do; they are simply making the natural price action clues harder to interpret. Indicators give no advantage, and in fact they actually just confuse and frustrate you by making the “real” picture of the market harder to decipher. Each indicator that you put on your chart basically just separates you further from the real story of the market.
You don’t want to purposely create a mess all over you charts by over-laying a bunch of indicators that are simply telling you what the raw price action is telling you but in a more confusing format.
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