Learning To Trade Forex By Understanding Price Action

By John Oswalt

Well, by far, the single hardest thing for unsuccessful traders to overcome is that they just don't have a full understanding of the market. They are probably trading based on some kind of lagging indicator(s). Their system usually relies on something like "I'll buy or sell once all these indicators are aligned". I'm NOT knocking it. I actually used to trade this way. But after taking so many losses, I figured maybe I'm not looking at this the right way.

After all, can you honestly say that you understand what the market is doing when all you are doing is looking at some kind of indicator that is telling you WHAT HAS ALREADY HAPPENED? Of course not!!!!

NEWSFLASH: The market could care less what the stochastics are telling you. It serves absolutely no purpose, and I can prove it. It's real simple. How many successful traders in the world do you know that just look at a stochastics indicator to let them know what the market is doing? I frankly haven't heard of too many. But if you really study the most famous traders in the world, you'll know that the majority care about three things: PRICE ACTION PRICE ACTION PRICE ACTION!!!!

There is one thing that you have to know about price action. These successful traders might not have used in the same exact manner, but you can be rest assured that the concepts of price movement were incredibly important to the reason why they would buy or sell. It really just boils down to what has thee price been doing, and how can I profit from it. The harsh truth is there is not really that much separating the rich traders and all the traders who are crashing their accounts. It's not like most of the rich traders went to an Ivy league college. In fact, you will be quite stunned to know that some of them barely got out of high school.

The rich enjoy trading success simply because they are able to look at a chart and they are able to read and understand what its telling them, much like a book. They understand why a price goes or stops at a certain level. Basically, they can comprehend what it is that they are looking at. Its not just a bunch of colors and sticks on a screen. It means a whole lot more than that. It represents information that can be used to become a full time trader. The closest comparison that I can make is when a person is trying to understand the plays of Shakespeare. The language is English, but its a little hard to follow. But if you can look at it from a different perspective, then the light bulb clicks and once you get it, YOU GOT IT FOREVER. You'll be quoting Hamlet before you know it.

It's actually not as difficult as you may think it be. Just about anybody can understand the concept of price action. It really comes down to the fact that most people don't want to take the time to really grasp what makes the market move. They would much prefer to spend most of the time looking for myths like holy grail or some other magical indicator, that people can just slap on a chart and make millions of dollars. That's not the way it really works. The faster you know that, the better. I had to learn that the hard way.

The most difficult part of this, is to get somebody to actually teach you how to visualize the market in this way. It's quite difficult to learn yourself. If it wasn't, then we would all be millionaires. The majority of the time you just need someone to guide you so you can understand the information that you need to know, and after that you are home free. This is what Trading in The Buff does. I have purchased other courses before and I have been burned. With so many courses out there, it's hard to see the differences between the junky courses and the real courses. But I thought I would give this a shot.

But something interesting happened. I realized everything I need is right IN FRONT OF ME. I just have to eliminate all the crap that's blocking my view. I used to trade with sctochs, FIBOs, Moving averages. It turned out to be the last forex training I'd ever need (It feels really good to say that). I thought I would be wandering around aimlessly from one system to another for as long as I live, or until I was dead broke, which ever came first. But, eventually I just found out that less is more. Not until you see the market's movement in all its glory with no interference, then you can't really say "I am a trader". - 23221

About the Author:

To learn to trade currency, you should really check out Trading In The Buff.

2 Things to Avoid in Forex Trading

By Bart Icles

Have you ever wondered why majority of traders in Forex trading fail miserably - and end up on the losing side often, and that only a countless few really ever get to succeed in turning a profit. Whatever the answer is, I'm sure if you knew then you wouldn't be reading this article. What if we took a step back from this harsh reality, and look at it from another point of view: instead of looking for the best ways on how to succeed in Forex trading, why don't we instead try looking out for the things to avoid in Forex trading? Maybe it's better to shine the limelight on the industry's main pitfalls, identify each one, and then take it from there. Have you ever tried doing it this way? If not, then read on.

Keep searching for the Perfect System

Most traders, from neophytes and even to the most experienced ones are always trying out the various systems readily available on the market, even if the system in question is new and vague to them, hoping that it might be the ultimate system they've been looking for that will be their magic ticket towards untold riches.

Truth be told...there is no magic formula or system in the industry ever to make anyone get rich quickly. Since the market is very volatile, at any point in time it will go up or down on its own accord. All Forex trading systems is bound to fail from time to time. The secret is to find a system that fits your trading needs, and then follow through with it.

Be always on the lookout for an easy deal

Don't be reeled into starting a career in Forex trading based on these false assumptions because if you do, you've doomed yourself into certain failure even before you've even started in it. Public ads showing or making a show of how easy Forex trading is and one that can be accomplished easily with almost anyone willing to risk diving into its murky deeps is in for the shock of their lives...and saying goodbye to their life savings.

It's not easy in a sense because it doesn't take just a click to put you on the winning circle just like that. It'll be possible, not easy (would be the correct way to say it) to get continuous and consistent profitable results once you've learned all the basics of the trade, and then go on to learn more about patience, discipline, commitment, perseverance, and quick-thinking...and etc.

To play the game you have to learn all the rules completely, and some more. And to win the game, you have to play by the rules. - 23221

About the Author:

Investment in forex starts with a desire to learn and a drive to become a great trader. Learning forex trading signal software takes dedication and a good teacher. But once you learn how to trade and do so successfully your life will change and you have options and financial resources you never had before.

What Are Moving Average Crossovers?

By Ahmad Hassam

A moving average is an average of a predetermined number of prices such as the closing prices calculated over a number of periods like 50 candles. The higher the number of candles in the average, the smoother the line is.

Moving averages are of two types: Simple Moving Averages (SMAs) and Exponential Moving Averages (EMAs). SMA is only an average obtained by adding all the candles that you would like to measure. The EMA responds more quickly to price changes as compared to SMA because it pays more attention to newer candles.

Instead of watching the up and down behavior of each candle you are watching the relatively smooth moving average line. A MA makes it easier to visualize price action without statistical noise.

Moving averages are lagging not leading indicators. Its signal occurs after the new price movement not before it. Moving averages do not think ahead. They can tell you what has happened, not what will happen.

Nonetheless, MAs have a critical role to play. MAs should be an essential tool in planning your trades in advance. Past price action does not always predict the future price action. But price action sure likes to repeat itself. Several different MAs are used at once on the same chart. These different MAs offer different pieces of the puzzle when we plan our trades.

When the market is steadily rolling, moving averages keep us in our trades. If something changes like the moving average crossover, time to get out or trade the new direction. Moving averages are frequently used as price filters.

To filter choppier price action into a reliable indication for true price action, a short term moving average has to cross a long term moving average. The most obvious use of moving averages is to watch for crossovers to confirm new trends.

Short term MAs are more sensitive to price action as they are measuring fewer candles. Longer term MAs are less sensitive to price action. Longer term MAs tend to be more flat and are less likely to whipsaw up and down.

If the fast EMA crosses below the slow EMA, it is predicting new downward price action. When MAs do cross over you should take notice at once. On the other hand, if the fast EMA crosses above the slow EMA, it is predicting a new upward price action.

However, such crossovers should not prompt you to jump into a trade at once. MA crossovers often occur too late and will put you in the market with an unfavorable risk to reward ratio.

A crossover should be part of the trade plan that you have developed in advance. Not every crossover is the same. Moving average crossovers are great as they are easy to see. It will immediately attract your attention but simply do not replace the work of planning your trades. - 23221

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading and swing trading stocks and currencies. Discover A Revolutionary New Forex Robot. Develop your own Forex Trading System.

How To Invest In Property During A Bad Economy? Property Investment In Todays Economy Property Investment Guide For A Bad Economy

By Alexander Johnson

Property investment is defined as the outlay of money in properties like lands, or buildings in order to get some profit or income out of it. Properties that are usually targets for investment include high-rise residences, and also commercial properties like shops. One must not be afraid of risks when it comes to investing in a property, but always ready to take up positions that sometimes do not even reflect the general market outlook. Smart investors can buy a property during a market crisis and turn it into an overflowing source of income during the boom time.

When pursuing property to invest, it is always wise to know what where these properties that are of interest is located. For budding investors, the key is to strive for capital appreciation through the investment of properties from good locations. Buying the right property at the right location that is near to the facilities like shops, schools and proximity to main roads and highways is the best choice, as there will be future growth and the price has not been appreciated much yet. It is also correct to venture into a familiar market locality at first so that one gets a better understanding at the works of investment while giving considerations to good feng shui and neighborhood.

High-rise apartments that have a strong market for expatriates are obviously a profitable investment, as the rental income can provide a high cash flow. Good bargains on property investment that sells for prices 20% lower that the market price must be checked and looked into during property bust cycle that promotes such bargains.

Be really smart when taking loans making sure that they provide the highest quantum and tenure in order that one can also invest in a few other properties as well. Financial problems can occur if one does not plan carefully. Invest in properties that can be financed and relocated without difficulty. Any successful investment takes not only properties but other aspects of life such as child education and retirement seriously, to ensure a well balanced life.

The development of a 20-year property investment strategy plan is important if investors want to be more than just successful. These plans must consider ones age, financial status, current state of the property cycle, possible economic situations, effective and practical investment tactics, and also personal goals. Even in property investment, moderation must be practiced so that one do not get carried away and become overly committed financially.

During economic downturn, and especially if one is still new at investment, learn to be patient as these factors are not able to help produce quick returns from the investments. Investors should wait for the right time to transact the deals. Ultimately, the best teachers in the property game are hands-on experiences, and also learning from every success and failure that comes your way.

Remember that a successful property investment is an ongoing journey. With cumulative effort and detailed strategic planning, one can become a master at it. Strong influence on the property market cycle that reflects the economic phase is the key so that one knows the right time to buy or sell. - 23221

About the Author:

The work required for property investment and property management is becoming challenging and competitive. Without software, one can be ineffective and make mistakes easily. With software such as property tax software and property manager software will help a lot in reducing risk and cost.

Short Term Trading Based on The Inside Bar Pattern

By Chris Blanchet

As far as learning technical analysis goes, many investors will make short-term trades based on longer-term, "solid" patterns such as the head and shoulders top covered previously in this series. The problem with relying on solid patterns is that they are generally longer-term in nature and may not produce the short-term returns one hopes for.

The inside bar pattern is one such pattern from which investors can take short-term cues. This pattern indicates a possible change in investor sentiment in the short-term. In other words, if the overall trend has been heading down, the inside bar often indicates a reversal in that trend.

Spotting an Inside Bar

For investors who are learning technical analysis, identifying the inside bar might be a little more difficult. It involves a taller bar one day, followed a smaller bar the next. The smaller bar consists of a trading range within the preceding day's taller bar.

Confirm The Pattern

When it comes to using the inside bar to commit to a trade, investors should seek additional confirmation through additional analysis. This step is often overlooked when investors start learning technical analysis. Other analysis includes fundamental data for the security, sector and market, as well as technical data such as support and resistance levels and momentum.

As far as the reliability of the inside bar pattern, investors will find greater success when the bar takes shape following a steeper inbound trend. In terms of the bars themselves, investors will want to see a longer first bar (which suggests that stronger momentum has dissipated and reversal is imminent) and a shorter second bar, which suggests a more dramatic reversal to come.

And lastly, the volume level should be lower for the second bar than for the first, as this hints at a better balance.

When it comes to learning technical analysis, investors should remember that there are many other indicators that need to confirm their trade decisions. As well, there are plenty of specialized software programs available to make simple buy and sell recommendations. - 23221

About the Author:

Chris Blanchet has been a Financial Advisor for more than 16 years. For investors looking to learn technical analysis for free, Chris offers a free e-course at Online Trader Today.com. His personal debt-free blog can be found at How To Repay Debt.com.