Currency Trading Basics - Answer This Question Correctly or Lose Your Equity

Currency Trading Basics - Answer This Question Correctly or Lose Your Equity

by kelly price

Here we are going to look at currency trading basics and one specific question any novice forex trader must answer correctly, if they are going to win with their forex trading strategy, so here it is...

My trading edge over the 95% if traders who lose is (defined)

To win you need to have a trading edge - it's as simple as that. Here are some answers the bulk of losers will give and they will all see you lose

- I intend to use a forex day trading or scalping method

- I am going to blindly trade a vendors system

- I like to take expert opinion and trade the news

- I have a forex trading system that can predict forex prices

- I believe the markets move to a scientific formula and will take advantage of one

- I have a complicated system that I have refined in back testing

- I am simply going to buy into support and sell into resistance

All the above do NOT constitute and edge and will see you fail at forex trading - keep in mind 95% of traders lose!

If you learn anything in your forex education it should be that forex trading is not as simple as it first appears and to learn currency trading correctly you must end up with an edge that you can define - no two peoples edges are identical but successful traders know what it is and why it gives them an advantage and they have the confidence to apply it with rigid discipline.

Lets first start with a fact - forex trading is an odds game not a game of certainties.

There is no scientific method to help you determine prices in advance.

If there was we would all know the price and there would be no market! Furthermore, if you try and predict forex prices, you will lose because you are simply hoping and guessing and you should really be trading the reality and confirming every trading signal before executing.

Forget complicated trading system!

Simple systems work best as they are more robust in the face of brutal ever changing market conditions and have fewer elements to break.

Forget the news its just stories.

The news reflects the emotions of the losing majority and if you get involved in trying to follow it, you will lose.

You need to trade the odds to enjoy currency trading success.

The best way is to use forex charts, where you can simply see the reality of price change and you can either forex swing trade or trend follow - but never day trade!

Day trading is the best way to lose money out and doesn't work in the real world.

Forget all the gurus out there with their regular income systems and simulated track records; it's a loser's game.

Forex trading is a combination of a simple forex trading system; you totally understand this then allows you to execute it with discipline.

If you don't have the confidence in your system you will never have the discipline to follow it and these traits come from understanding and knowing a trading edge.

So there you have it perhaps the most important point of currency trading basics to learn but if you do and apply what we have written you could enjoy huge forex success.