What isotions and How They Lead to Lack of Success
Lack of Success – The bulk of Forex traders lose and the reason is – they let their emotions get involved. Let’s take a look at how this happens.
A good illustration is the 100th floor trader who enters the market with the view the dollar is going to rise against the euro, so he buys a call on the EURUSD.
All of a sudden the euro is heading south and as he is getting down from the premium he Release the bit and as soon as it starts to move up again he sells and – he is stopped out.
The logic in a bit of market reading is – the euro is plummeting against the dollar and if I buy it low and sell it high I am going to pocket a profit.
This is a paradox because if the trader had calculated all the fundamentals and known what they were he would know that the euro was going to appreciate and at the same time rise against the dollar.
What is this logic?
In simple terms if the sentiment shifts in the direction that the fundamentals are saying and the markets are moving with that sentiment there is a high probability that the trend will continue. 해외선물
The idea of sentiment is subjective and cannot be measured, it’s important to look at shifts in sentiment against price.
Let’s take a look at some simple forex trading strategies to do with this.
– The first point to keep in mind is that you want to be long at important market bottoms and short at market tops.
– So when the market is falling know how to take a position and key off support and resistance; you then need to time your trading signal
– The euro against the dollar was a good example of this, as the market was falling and prices were getting near the 1.60 level – but in the last couple of weeks the price has been pushed up and will hit 1.60 (the last high), if you keyed in 1.60 as the euro against the dollar should have touched 1.59 and then tried to get out the market, a close under 1.59 probably means the trend is to repossess the levels 1.59 and then maybe re entered
– Keep an eye on this level, its been tested several times and powerful signals have been received at this level, getting out on to it and then trading with it is very profitable
– The concept of breakout trading is simple to understand and easy to use and it’s a fact that most big trending moves start from new market highs – NOT market lows!
– The real key to long term trend following is not the long term trend but getting in on and staying with the trend. Once you get in on a valid breakouts don’t try and hold it – move your stop to breakeven once the trend is underway.
You will normally get a few really good breakouts each month and if you focus on them and hold them, you can easily make 100 – 200% on your trades.
Do the above and you will have a timeless, Forex trading method which makes money and I hope you enjoyed this article on Forex trading basics. Lack of Success