Forex Price Movement - How and Why Prices Really Move

This article is going to look at how and why prices move and how to win. Most novice traders make the mistake of thinking prices move to news stories and try and trade them or to some scientific theory - they don't. Forex prices are chaos - but that doesn't mean you can't win, you can and to do so, you must understand the key point of this article...
Here is the equation for market movement

Fundamentals (Supply and Demand) + Investor Perception of = Price

While the above sounds simple and it is most traders don't understand that the facts are NOT important it is how they are perceived by all the investors as a whole that is important.

Many people trade breaking news but it won't help you as it's discounted immediately and furthermore, investors are always looking to the future. To illustrate this think about this fact:

Market bottoms normally occur when the news is most bearish and market tops, when the news is most bullish.

The fundamentals are important long term - but in the short term prices are determined by the greed and fear of the investors, it's what they all think as group that determines price.

Many traders think because human nature is constant, there is a scientific theory of market movement - but of course there isn't. If there was, we would all know the price in advance and there would be no market at all.

Forex is an odds game and your aim is to trade high odds set ups, when the patterns of forex price movement dictate you should and the best way to do this is to use a simple robust trend following forex trading system.

Forex charts show you the supply and demand situation (they simply assume that all fundamentals show up in price action) but they do so something more - they tell you how all the investors perceive them.

Forex charting and technical analysis is not a science, it's an art. You're in fact, playing a similar role to a good poker player. You are looking to bet big on high odds sets, fold ones that don't go right and pass by low odds set ups.

Just like the poker player, you won't win every hand - but if you play the odds, you can win more than you lose and make a lot of money.

Forex charting is easy to learn and if you make it part of your forex education, you can learn it in about 2 weeks and get a robust forex trading strategy together which, you can apply in around 30 minutes a day.

If you can master it forex charting and spot high odds forex price movement patterns, the rewards are huge.



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Learn To Trade The Forex: Forex Online Trading Systems Can Make You Rich

Foreign currency exchange trading (Forex) is creating a lot of buzz in investment circles, because it’s making many people very wealthy. Unlike the New York Stock Exchange, the forex market is open twenty-four hours a day. You can literally trade from sun up to sun down.

This is great news for anyone who has a job and other daily responsibilities. You can trade after work, or early in the morning at the crack of dawn. How often you trade and the time of day you choose is totally up to you.

The reason why so many people want to learn how to trade forex is because they hear stories about average folks, who have become forex traders, putting some money into a few good trades and making themselves a bundle – we’re talking thousands of dollars.

Is this kind of success in currency trading possible for you?

Yes, and no.

Yes, it is absolutely possible for you to learn how to analyze the market and pick winning trades. However, this success will not come overnight and will not come without some study and practice on your part.

Was that a buzz kill?

I hope not. It’s just a little cold water being splashed in your face. Look, online forex trading can be a little like gambling in Vegas. You’ve got your cash on hand, you’re sitting there at your computer looking at all the charts and currencies: dollar, yen, euro, etc.

You’re just itching to make some trades and even though you’re still green under the gills, you’re ready to jump in on that hot tip you got from your fellow trading buddy. The rent money’s due and you’ve got bills to pay, but you just know that if you make this one trade - you’ll make big bank!

Okay, this is where the excited new traders get happy, go all in and then . . . lose lots of money they can’t afford.

That’s right. While experienced traders are making nice profits on that hot tip, the newbies are getting wiped out clean, because they really don’t know what they’re doing and are betting their hard earned cash based on pure emotions. The first thing you need to learn about trading currencies is that you should NEVER make a trade like a gambler sitting at a roulette table letting it all ride on red.

The best traders are the ones that know how to keep their cool.

The best traders also learn how to read the forex news and analyze what trades they think are best given certain market conditions. Another golden tip is that you should never invest money that you need to keep a roof over your head, food in the fridge and the lights on at home. People who do this are gamblers and we already know that gamblers lose most of the time.

Successful traders have learned to risk no more than 2-3% of their total trading account. So, while they may make thousands, these investors have learned how to build on their success. When you have a winning trade, you take that money and invest it again and again.

To be safe, while you are learning how to trade in the forex market, you shouldn’t use real money period. You can open a demo trading account and make your trades without risking a cent. This way, when you lose, you can study that mistake and try to correct it. While all investors, even successful ones, lose money, you’ll be learning how to minimize your losses and increase your winning trades.

A good online forex trading system will show you the ropes and teach you how to look at trends and study market movement. You’ll also learn how to put in a strategic stop loss to keep you from losing too much money when the market goes against you.

When the time is right, and you are confident you can trade successfully (with a cool head) using real money, then jump in and go for the gusto!


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