Forex Charts - The Fatal Mistake 90% of Novice Traders Make - By: kelly price

Forex charts can make you a lot of money but most traders fail to make money. There is one mistake made more often than any other on forex charts and it’s the one I am referring to in the above title.

Make it and you’re guaranteed to lose. So what is it?

Let’s find out.

The fatal mistake is trying to predict where prices are going to go on a forex chart – You may be thinking well you have to predict – NO YOU DON’T!

Think about it:

If you are trying to predict where forex prices are going to go you are simply hoping and guessing and the forex markets will take your money – you can’t guess or hope, you need to trade the odds but more of that in a minute. Let me give you a vital piece of forex education first.

If you want to win you trade on the reality of what you see – that’s price action. You never ever try and guess what will happen you wait and confirm. Let’s look at an example.

Many traders love to try “buy low and sell high” its accepted market wisdom and its wrong (90% of traders lose so don’t worry about most traders believing it) and if you think about it of course it’s wrong.

Traders see prices coming into support and buy as they think there in at the bottom – yes they are if the support holds!

The important word is “if” it holds.

Most times it doesn’t and they lose.

If they knew how to trade correctly they would wait for the price to test support by moving toward it and watching price momentum turn up and move away – This would confirm support has held and they could enter with the odds on their side.

Of course you miss the bottom but you can’t predict that anyway, so you simply don’t do it – you trade with momentum and the odds.

Now a lot of people believe that markets move scientifically, after all human nature repeats itself and is constant and a lot of vendors will tell you can make regular income and trade tops and bottoms with pinpoint accuracy - You can’t

Consider this:

If there was a scientific theory that worked everyone would know the price in advance and there would be no market!

This is logical and common sense leaving aside the fact that if someone had discovered the secret of market movement they certainly wouldn’t tell you they would be making millions.

This of course doesn’t stop people selling the public ridiculous theories.

The king has to be Fibonacci numbers (derived from the copulation of rabbits no less and nothing to do with finance) which tells you buy the key support levels you will win – try it and you will lose.

Another example is, Elliot wave (lets leave the fact that he died in poor so it obviously didn’t work for him) its supposed to be objective but lets you decide what to do – well, if its scientific, it should tell you exactly what to do!

Trading is an odds game nothing more and if you try to predict kiss goodbye to your equity – this doesn’t mean you cant make a lot of money you can:

All you need to do is trade with momentum when the odds are on your side and you will do what the majority of traders don’t (don’t worry about being different the majority lose) and you will have the opportunity to make a lot of money.

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