Trade what you see

[Ricex]

I'd like to try and offer some advice to any forex beginners who may find themselves coming under pressure to make trading decisions when matching fundamental economic information and technical analysis.

I have been trading the forex markets for years and somewhere in my office I do have bits of paper that professes I know something about economics but this is more of a burden than a bonus when forex trading.

Spend a moment looking around the internet for economic comment and you will quickly send most of your synaptic clefts into overload. It is quite staggering the number of different points of view available. What hope for us then to filter the good from the bad and discard the downright ugly. We are all susceptible to over analyzing the endless torrents of information bombarding our thoughts on a daily basis, and we are all capable of making it into a pigs ear.

Lets just take one recent popular commodity discussion as an example... gold. Now gold is at record levels, as I'm sure you are all aware, last week I believe it touched 1060. Now had you been reading the opinions of all the ego driven opinion givers at the moment we arrived at the magic figure of 1000 you would be forgiven for coming away none the wiser of what to do next.
Had you on the other hand calmly kept your head and blanked your senses to this incessant noise, looked at your charts and traded what you saw without prejudice, you would now have a rye smile framed and sitting on your desktop. Now of course the opinion givers are going into overdrive and it's next stop 2000! but frankly who cares? not I.

My point is that for every 5 people that you find saying "sell" I can find another 5 who will say "buy", and at the end of the day the real surreal deal is that nobody knows, so why clutter up your minds with this custard like glue which will in no way shape or form help you in your quest to trade successfully.

Look at your charts and trade what they are telling you is the only truth you need. Be aware of high impact news events like Non-farm payrolls and interest rate changes of course, but don't get bogged down in Bloomberg type news media and try to double guess what effect economics will have on your trading. It is mind rot and will eventually leave you a confused and frightened trader living out your days in a home for the permanentley befuddled.

Good luck with your trading.

 

[Stony]

Hi Ricex,

you got it. I agree 110% !

 

[Pharaoh]

I'll see your 110% and raise you another 10%.

 

[Ricex]

I'm dragging this up again as a reminder that you can only really profit from Forex by trading what is happening right now in front of your eyes.

Don't try and be clever, and don't rely on deities, pixies and rabbits feet to bring home the bacon.

You don't need to know why something is happening, how could you possibly know why? are you really going to believe some bimbos on TV who change their story with the wind, or any number of opinions on the web that contradict one another, come on get real.

How many times have you been waiting for a news release that comes out better than expected and the market goes in the other direction?

You scratch your head and ask why?............... who cares why, you just missed a trade.

Be honest about who you are, your not a trader, your a punter looking for some easy money, you've seen the ads and you want in. You don't know diddly squat about all that financial economic stuff so don't try and make out you do.... be honest it's ok.

Now here's a good plan to make money, but your going to have to learn some important stuff.

Invest your precious time in finding out all you can about price action and price patterns, study these patterns and learn to recognise them on naked charts.

Realise that the vast majority of indicators look pretty but don't mean ****.

Finally learn what money management is, and apply it to your account and trading.

Forget everything else, this will get you on the right path. Once you've taken this first step you won't be tempted by idiots trying to sell you a false dream, you'll understand how forex ticks and how to take a slice of the pie.

Be responsible for your actions.

 

[RMSTrader]

Excellent advice, Ricex. This is exactly how I'm steering my ship now'days. Read what your charts SAY (not what you want them to say), keep it simple, be patient, don't overtrade.

The sheer noise level generated by all the expert financial commentators is deafening!