How often do I see vendors telling you that you can pick market tops and bottoms in forex trading? All the time and they tell you that you can do it with accuracy - but its rubbish - you can't. If you want to make money there is a better way than trying to predict and that is the subject of this article...When I was a broker, there was a saying I learned, can't remember who said it but it's very apt:
It's true - if you try and predict market tops and bottoms, you will get hammered and lose your equity. I know there are lots pf people telling you that you can predict markets in advance but you can't. There is no scientific theory of market movement as many claim and this is obvious, due to the fact that - if there were, we would all know the price in advance and there would be no market. Prediction is another word for hoping and guessing and that won't get you far in life and certainly not in forex trading."A bottom picker will become a cotton picker"
So how should you trade?In forex you should always wait for a high to be confirmed before trading the short side and the reverse when looking for a market to rise. For this you need to look at shifts in price momentum and use momentum oscillators. If you don't know what they are its time to make them part of your essential forex education! We have covered them in our other articles - but a great one to use is the stochastic; it's visual and will take you about 15 minutes to learn, so check it out. Sure you miss the exact top or bottom but as you can't predict that anyway that's no problem. Your aim is to make money and not look for pinpoint market accuracy with your trading signals. Keep in mind; if you caught 70% of every major trend you would be very rich. The real way to catch the best trends is to keep this in mind: Buy high and sell higher.
It's a fact that most big trends start from new market highs and by buying these breakouts, you have the odds on your side and can make the best profits. Most traders hate doing this, because they think they have missed a bit of the move and don't enter, they wait for the pullback but the trade carry's on, piles up thousands in profit and there left out - don't make the same mistake, when a high odds breakout occurs go with it.
Buying breakouts is one of the simplest and best ways to make profits in forex trading and will put you on the right side of every major trending move. As you can gather from the above, pinpoint accuracy and prediction doesn't work in forex however, that doesn't mean you can't get the odds on your side and make a lot of money, you can and enjoy forex trading success. NEW! 2 X FREE ESSENTIAL TRADER PDFS ESSENTIAL FOREX TRADING COURSE
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